Tuition fees

We await the review of Lord Browne of Madingley on university finance, but Universities minister David Willetts has already intimated that the cap on tuition fees may be varied or removed.  Paying for university education has become more problematic over the years as student numbers have increased dramatically.  Covering the full cost of a student’s university education has become less viable now that more than forty per cent of the 18-21 age cohort go to college or university.  One either has to attract funding from sources other than the public purse or reduce the number of students.  Universities have sought increasingly to recruit overseas students who have the advantage of paying full fees and doing so up front.   Increasing tuition fees for home students will not be popular and in the short term will actually increase the burden on the Treasury, given that they are not paid up-front. 

The present situation is not sustainable and the pressures are exacerbated by the economic situation.  Is there, then, an alternative to increasing tuition fees?  Or is increasing fees a necessary evil?  Readers comments are welcome.
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About Lord Norton

Professor of Government at Hull University, and Member of the House of Lords
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15 Responses to Tuition fees

  1. Jonathan says:

    I intend to write a lengthy blog post on this myself, but in short, I think we need to reduce the numbers going to university. Many students are effectively being conned into paying to study a degree that does little to enhance their chance of finding a job. They feel they need a degree because so many other people do. The education itself is of little value. Only the most academically able should go to university, but this should be irrespective of class, background, family wealth, etc. For other people, more vocational courses run at local collages and combined with work or apprenticeships would be more appropriate.

    Any fees or grants should not be means-tested on parental income. The whole argument for fees is that the student will earn more during his or her career, so what do the parents’ incomes have to do with this?

    One thing that particularly alarms me is the suggestion that “more expensive to run” courses should have higher fees. So that will be yet something else to put people off science and engineering, further ruining our economy, and requiring even more migrants to fill scientific jobs. And this is likely to be coming from a scientist, Lord Browne, who, let’s face it, is hardly the best person for understanding hardship with the multi-million pound annual salary he used to receive at BP.

    Labour’s policy of more and more people going to university didn’t work. I hope the new government have the guts to say that university should be for the few – but for the academically able few and not the privileged.

    • Croft says:

      Jonathan: I think it is perfectly true that ‘Many students are effectively being conned into paying to study a degree that does little to enhance their chance of finding a job.’

      Now the forcing of unis to show graduate job prospects might help a little but I think more fundamentally the state should evaluate what courses it is prepared to fund. The sham maintained by many in the educational establishment that all universities and degrees are equal in worth is part of the problem. I do think we need a more robust minimum quality of course and measurable advantage to students/state before the state funds a course.

      I think you are demonstrably wrong about abandoning wide scale participation or access for the population (I might quibble at the arbitrariness of 50%) but all our rivals are putting similar numbers into university and first world countries are fundamentally knowledge based added value economies. We can compete globally in the service sector we can’t in the manufacturing (except that the high end) due to our wage cost base. Pretending we can go back to 10% uni ratios and compete is a fantasy.

      On the course costs, we have to recognise that some courses cost more to run than others and so either the student or (as at present) the state has to pay more to support some courses than others.

      On raising the fees, they will rise I see no option. Considering the present financial situation they may need to be staged so the state doesn’t take too great a hit in the short term. I see no practical alternative, the graduate tax is just a wealth tax as its not about paying off the fixed costs of your education but a straight tax on your earnings. Those earning the most will just have a bigger incentive to manage their taxes or go abroad.

      There seems the usual misinformation on the disincentive of fees on students, that somehow a raise will put off poorer students. The fact that this hasn’t happened (to any significant degree) with fees seems to be problematic for those that argued that the original fees would put off poorer students and now seem quite undeterred in arguing that they will be correct this time around.

  2. Alex Bennee says:

    One thing I worry about with the potentially rising fees is that more expensive courses like the sciences with be disproportionately affected. While it would be nice to give a free university education to everyone (which is more or less what I had modulo the Student Loan for subsistence) I think the limited resources of the state need to be more targeted.

    I believe nurses already have their fees covered by the NHS. Perhaps we could do the same for other degrees that output graduates the economy is short of? Hopefully that would pay for itself by increasing the skills level of the workforce. I agree with Croft that backing away from the current levels of participation is short sighted, as the economy moves towards being a knowledge based one.

    I think the current system of loans is preferable to solutions like a graduate tax because it’s a bounded re-payment of cost rather than a penalisation for being a graduate (who if successful will already be paying more tax anyway). However the current loans scheme is unsustainable in the long term and needs revisiting.

    Finally there should be more encouragement for bursaries and alternative financing for gifted students (hopefully academic selection is not a dirty word any more). Considering the employers are constantly complaining about the lack of suitable graduates perhaps they can be convinced it’s in their interest to expand this form of funding?

  3. Jonathan says:

    Croft and Alex Bennee: If we need all these people going to university, why aren’t there sufficient graduate jobs for them? Even of those whom the statistics show to have jobs, many will not have taken graduate-level jobs. Yes, we are more a service-based economy, but those services include chefs, hairdressers, receptionists and office cleaners – people I can have a lot of respect for and who do a good job, but who really do not need to go to university for three years to study for an academic qualification.

    As for equality of courses or institutions, the recently released Guardian 2011 league tables make interesting reading, particularly the employment column:
    http://www.guardian.co.uk/education/universityguide

    And as for Croft’s implication that science courses should cost the students more, there is already little incentive to study science, which is seen as a hard option that means fewer opportunities to drink and have fun at university. Pay is low for anyone going into science, and if the impending cuts mean losing final salary pensions, that will be the only incentive gone. Also, are you aware that people doing research degrees (e.g. PhD) in science usually receive full funding from the research councils? It would be a totally bizarre situation if the government says science undergraduates have to pay much more in fees than arts students, but then the situation is reversed at postgraduate level.

    No-one’s saying go back to 10%, but the numbers do need to be reduced to a sustainable level. All that’s happening now is more and more dumbing down of degrees to the extent that university will just become an extension of the schools system. That’s how it is in the other countries you use as comparisons. At the moment our degrees are highly valued because they are not like that.

    • Croft says:

      “If we need all these people going to university, why aren’t there sufficient graduate jobs for them? ”

      I think you rather answer your own question, in part, below. Many graduates are not studying courses that have realistic career prospects. That’s not though an argument against the numbers of students but of the degrees chosen. There are at present a number grants/bursaries for certain courses the state deems important. Were the state to deploy this targeted manner on a much wider scale I do think it would have an effect and change choices. To take an extreme (purely as an artificial hypothetical) you could deny grants for media studies and restore fee-free degrees for engineering. Much of the problem seems though based in the schools system which unlike many of our competitors is very poor at streaming students into courses that best match their ability and have realistic job prospects.

      “And as for Croft’s implication that science courses should cost the students more,”

      I was careful with my words.

      so either the student or (as at present) the state

      I have no issue with the state saying we need scientists so we the state will make up the extra cost of the subject but and it is a big but that is not happening properly at present and many universities have abandoned some or many of their science courses because they are so expensive to run and their funding is simply not realistic.

      Fees need to rise but I think the state can make a perfectly proper argument for differential rates of support for subjects based on the needs of the economy.

  4. Alex Bennee says:

    Wrong sort of graduates?

    I can only speak to my profession which has been steadily growing the growing number of jobs in IT and against a backdrop of a shrinking number Computer Science graduates. I believe James Dyson has made similar comments with respect to Engineering.

    If all the universities are doing is spewing out legions of Media Studies graduates who all want jobs in the highly competitive media industry I’m not surprised they can’t find jobs.

    I too lament the death of science at University, it will not end well if the trend continues.

    • Jonathan says:

      Alex Bennee: exactly. Check the Guardian tables for Computer Science and IT. Employment is 80-90%+ until well down the table. Same story for any science or engineering subject. But for Media Studies, it’s 50-60%.

  5. ladytizzy says:

    “…but all our rivals are putting similar numbers into university and first world countries are fundamentally knowledge based added value economies.” (Croft, above)

    Mr Brown, then PM, said much the same in his 2007 speech to the Government Leaders Forum Europe. He also said, “Of 3.4 million unskilled jobs today, by 2020 we will need only 600,000. So unless you have skills you are at risk of being unemployed.

    Highly skilled jobs must and will replace lower skilled jobs. The 9 million highly skilled graduate jobs of today must become, by 2020, 14 million: instead of 25 per cent of jobs, 40 per cent of all jobs. ”
    http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/press_14_07.htm

    A quick look at Mr Brown’s figures above – by 2020, 40% of “all” jobs will be filled by 14 million highly skilled graduates – indicates a net loss of 1m jobs, yet nothing he did in his tenure led to the idea that the working population is expected to decrease.

    He stated that the UK will need only 600,000 unskilled workers. There are over 200,000 staff currently employed by Tesco alone; will most be re-classified as skilled, or sacked by 2020?

    So, his plan was to create an extra five million highly skilled jobs and, based on that, he wanted to raise the school leaving age to 18 or 19 (an aim of the LibDems back in 2002 along with the abolition of GCSE’s) and continue the ideological goal of 50% from secondary to tertiary tuition.

    One of the problems, as mentioned above, is that supply and demand of particular skills is out of synch; if there are no skilled engineers, the chances of an engineering business succeeding is substantially reduced. Chicken and egg. However, there is an extra factor to consider.

    Mrs Duffy briefly mentioned one of the key issues of the last election, and of many elections before: immigration and, now, EU migration. If I want to start an engineering business in the UK I need engineers. The employment pool here is (perhaps) not up to scratch and so I turn to those either from the EU or the rest of the world. Both the EU and the world points system allows entry to highly skilled workers, probably at a cheaper rate – where is the incentive to employ the new UK graduates?

    From the universities point of view, they will take those engineering students residing outside of Britain who can pay the fees and who, quite possibly, end up with a British job. Ultimately, it appears that if you want a well-paid job, wherever you are born or study, you or your sponsor are now expected to pay for high-level vocational education.

    This leads to my one idea – phew! The gvt should ensure that any future sweeteners for large companies to establish themselves here includes repayment of British student fees within two to five years.

    • Croft says:

      Ladytizzy: I presume you mean “repayment of British student fees” in the sense of fees charged at English and Welsh Unis. Otherwise you could read it as only repaying fees on UK citizens hired which sounds like a court case in the making. It does pose the obvious question does the company have to pay anything for Scottish students whom the state has paid for just as directly but the student doesn’t pay directly?

      I have concerns about proposals like this because I think the balance has to be carefully measured that it isn’t seen and doesn’t have the same effect as simply being a startup tax on new inward investment. Either you’d need to taper the repayments or start the payback later I think to minimise the disincentive.

      • ladytizzy says:

        I did mean the fees paid by British students in Britsh universities, whether Welsh, Scottish or English.

        It is my understanding that the top-up fees are capped rather than set by the gvt(s) and it is up to each university to set fees for British and international students. If the devolved powers of Scotland and Wales wish to use their budgets on student fees, that’s up to them and their voters.

        I’m not sure why (or how) employers should be taken to court for paying arbitary fees when gvt and non-gvt bursaries are already common place. In any case, it is easy for employers to offer interest-free loans or equivalent benefits that negate the differential fee structure.

        An employer is a customer and will shop around for the best deal. In terms of employment, they will want to see a return for their investment and as, say, the NHSdoes will ‘lock in’ a graduate for, as I suggested earlier, two-five years.

        Gvts already pay £££ to multinationals to secure national employment. Currently, English graduates of English universities are at a financial disadvantage to other British graduates. I am merely suggesting an already well-used route to redress the balance and stop the brain drain.

      • Jonathan says:

        I’ve never quite understood this arrangement of different fees for Scottish and Welsh students. Students from elsewhere in the EU pay the same those “locally” supposedly to comply with EU rules on treating all EU students equally. But surely, students from England, Wales or Northern Ireland going to university in Scotland must be either home students, or EU students. If they are the latter, they should be treated the same as Scottish students, and if they are the former, why not treat other EU students as English students? Has there been an ECJ ruling on this?

        This is a good example of why devolution doesn’t work. Proponents will say it allows people in Scotland to choose their own policy on issues such as fees, which may be different from those in England. Well that’s nonsense. People in England would prefer to have the same fee structure as in Scotland. The point is Scotland can only afford it because of the funding formula that gives them more money per capita. An independent Scotland would soon need much higher fees (and taxes in general).

      • Croft says:

        Jonathan: EU law only requires you can’t discriminate against other EU countries’ students. A singular failure of the Scotland Act in that respect was that it doesn’t prevent the Scottish executive discriminating on the grounds of being from England Wales or NI.

      • Jonathan says:

        Croft: what I don’t understand is how it would be discrimination to treat EU students in the same way as British students. Given that the majority of British students have to pay fees in Scotland, making EU students pay them too would simply be treating them as UK students.

      • Croft says:

        They aren’t treating them the same as Scottish students though. EU law works on a nation state basis and Scotland is not a state. So in effect you can do what you like internally as long as EU students get the ‘best’ option available.

  6. Lord Norton says:

    Thanks for some very thoughtful contributions. I rather agree with Croft and Alex Bennee and I find it difficult to think of an alternative to raising tuition fees. I take Alex Bennee’s point about others covering the fees and the similar, and very interesting, suggestion of ladytizzy regarding companies that wish to establish themselves in the UK. I shall reflect further.

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