Higher Education Funding: A Modest Proposal
With next year’s general election already looming there are signs that the higher education funding system is likely to be a hot topic. The Conservatives, for example, are reportedly considering removing the cap on tuition fees (currently set at £9K per annum) while Labour is talking about reducing the figure to £6K. Labour’s idea is likely to prove popular among potential students, it will result in a reduction of fee income to English universities of a third, potentially leading to wholesale redundancies and closures unless it is offset by an increased contribution from the taxpayer to offset this cut. Responsibility for higher education funding in Wales, Scotland and Northern Ireland is devolved, so Westminster policy does not apply directly there although the knock-on effect of changes in England would be considerable given the number of students who choose to study away from home.
The backdrop to these suggested policy changes is the obvious fact that the current system is unsustainable. Although there has not been a marked reduction in numbers of students applying to university since the introduction of tuition fees, it has become increasingly clear that the system of loans and deferred fees is actually costing the Exchequer more in terms of short-term borrowing than the old system. Moreover, there is a growing realization that the fraction of this cost that will actually be recouped in future is going to be much smaller than its advocates would like to admit. Recent estimates, likely to be revised upwards, suggest that 45% of student loans will never be repaid.
On top of this there is the problem that the so-called “elite” universities have not succeeded in “widening participation” (as the phrase goes). Oxford and Cambridge both continue to take about 40% of their pupils from private schools; many other institutions. My own institution, the University of Sussex, takes about 86% of its intake from state schools, which is about the average across the sector.
Although only a small fraction of pupils (about 7%) attend (private) independent schools, about 65% of those go on to University; only 24% from the state sector do. In my opinion, not all universities take widening participation seriously but even if they do (like we do at Sussex) it is difficult for higher education institutions to repair the divisions that arise much earlier in the education system.
The average fee per term for a day pupil at a private school in the UK is about £3400; this rises to about £7800 per term for boarding schools. Since there are three school terms per year this means that the average cost per year for day pupils is £10,200, well above the £9000 per year maximum fee for university tuition. That says a lot for how poorly funded UK universities really are, even with increased tuition fees, especially in STEM subjects which require expensive laboratories and other facilities. Moreover, private school fees are payable upfront while tuition fees for students in higher education are funded by heavily subsidized loans which do not need to be repaid until the student is earning more than a certain minimum salary (currently £21K pa).
When funding is tight it is particularly important that it should be targetted where it is needed most. For me that means to encourage more students from state schools to go to university. The principle I’d adopt here (and indeed in many other contexts) is encapsulated in the phrase “to each according to their need, from each according to their ability”.
Parents who have decided to send their offspring to private schools have, in my view, already demonstrated that they can afford to contribute to their education at a level considerably higher than the current tuition fee for university students. In such cases there is no need for a means test to determine whether they need support from the taxpayer; they have already done that calculation for themselves.
My proposal, therefore, is that students whose parents have decided to take their children out of the state school system should be deemed to be ineligible for state support for higher education. They should therefore pay the full fees upfront. I think there’s a case even for making such students pay for the full cost of their education which is not the £9K fee payable by Home/EU but the much higher fee charged to students from outside the EU, which is currently £17K at the University of Sussex. The money saved in this way should be used to provide better fee waivers and and maintenance grants for students from the state school system (on a means-tested basis). This could be accomplished by, e.g., a system of vouchers available to students from state schools in England; the rest of the UK could adopt a similar system if they wish. This would also be a step towards reducing the incentive for families to increase social divisions by taking their children out of the state system.
As well as driving greater equality and stimulating social mobility, my suggestion would also correct a number of anomalies in the existing system. One is that students attending English universities who went to Schools elsewhere in Europe (including Wales, Scotland and Northern Ireland) are entitled to the same financial support as English students. However, most students from outside the UK will return home after graduation and there is no effective means of making them pay back their fees and loans because these are currently recovered through the UK tax system. In effect, therefore, the taxpayer is providing free higher education for these students and it is one of the reason why the default rate on student loans is likely to be very high. In my proposal this loophole would be sealed; unless a student went to an English state school they would not have the means to access HEFCE support.
I have heard it said that this idea would remove choice. I don’t agree. Parents will still have the choice of sending their sons and daughters to private school if they wish. What it will do is remove part of the incentive for them to do that.
Across the UK over 80% of university students are from state schools, so the measure I suggest will not on its own solve the University funding crisis. On the other hand, I think it would at least be fairer than the current system. On the other hand, I’m not sure fairness counts for very much these days…Follow @telescoper