The Effect of a Tuition Fee Reform on the Risk of Drop Out from University in the UK

This paper investigates whether the increase in university tuition fees in 2006 changed student drop out behaviour. Using data on multiple cohorts of first year students who enrolled between 2003-2010, we estimate duration models controlling for unobserved heterogeneity. Our findings suggest that the policy reform reduced the hazard of dropping out by 16 percent, however, there were differences in the impact of the reform in terms of income groups, the type of university attended and the subject studied. The effect of the reform was not just a one off, but persisted for a number of years after 2006. Drop out behaviour in the post-reform period was also affected by the recession in 2008, and there may have been possible changes in the composition of the student population, which makes it difficult to quantify the full effect of the tuition fee increase. Finally, the tuition fee reform had a spillover effect on the drop out behaviour of Scottish students attending Scottish universities, a group exempt from the tuition fee reform.