Higher education investment and the role of the state

A few days ago several thousand people took to the streets of London to protest against higher education cuts, tuition fees and student debt. The protestors carried placards and heard speeches that called for free higher education, the end of student debt and progressive taxation. It is unlikely that their cocktail of complaints and demands will be taken on board, at least in its entirety, by any political party seriously aiming for government in Westminster, but it is clear also that there is a fair amount of unrest in student circles in England. But in targeting tuition fees above all else, the protestors may be addressing the wrong priority.

It may be worth saying that the argument for ‘free’ higher education (which is of course not really free, but rather consists of tuition funded by the taxpayer) is not without its difficulties. The financial burden of university studies is not felt evenly by all sections of the population. Students with access to significant private resources will not necessarily be troubled much by tuition fees; but disadvantaged students will always be affected by general living and material expenses even where tuition is free. In other words, wealthier students will notice relatively little difference between having tuition fees and having none, while disadvantaged students will find it challenging to afford even ‘free’ higher education. This is one of the reasons why universal free tuition does not, contrary to what its advocates often assume, necessarily draw poorer students into higher education.

A much more significant factor in the social (and indeed economic) impact of higher education is state investment. Many European countries have tuition fees, though on the whole these are low by English standards. However, such fees supplement (rather than replace) state investment, so that the latter can be effectively targeted at genuine need, whether this is institutional (investment) needs or personal student needs. It is arguable that American universities achieved global prominence once the US government realised that higher education investment would generate massive economic benefits; and now US disinvestment is coming at a time when we can discern a gradual slippage by American universities in global rankings, while aggressive investment by China and others is allowing their institutions to advance. The perfect model of higher education funding is serious public investment, accompanied by affordable tuition fees and targeted support for poorer students.

Some countries seem to have lost a mature understanding of what the state’s role is in higher education funding. This needs to be recovered.

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Social equity and access to higher education

One of the great developments of higher education across much of the developed world over recent years has been the dramatic increase in participation rates. Where once it was common to find fewer than 10 per cent of each age cohort going to universities and colleges, today it is not unusual to find up to and more than 50 per cent getting a degree. What was an elitist system is now much more inclusive.

Or is it? The latest data from Scottish higher education shows that the proportion of students coming from socio-economically deprived areas is actually falling. This is in line with statistics from Ireland, where also participation rates of persons from deprived backgrounds remain stubbornly low, having hardly increased at all since tuition fees were abolished in the 1990s.

The policy of securing equal opportunities for all groups within society seems not to make much of an impact in higher education. Why is this so? There are probably many reasons, but one of the chief ones is that too many politicians and policymakers have persuaded themselves that removing tuition fees is a sufficient way of securing social equity. This is not so, not least because in countries with tuition fees disadvantaged students often get their fees paid by the state anyway. The main beneficiaries of free higher education have been the middle and lower middle classes; those from poor backgrounds have hardly benefited at all.

Any policy to secure greater participation by such groups must pursue a combination of measures: tracking talented students in the school system from an early age and bringing them into the universities and colleges; persuading parents to support their children’s aspirations; ensuring good secondary education so that students have equal chances of being prepared for and passing final school examinations; applying flexibility in entry requirements for universities; providing adequate financial support to poorer students while at university; and maintaining professional offices in universities dedicated solely to supporting disadvantaged students.

All these measures are not only important, but also expensive, and in many countries the resources are not made available, or not sufficiently, to allow participation rates to grow. It is time to stop believing that any policy on tuition fees can fundamentally improve access, and to understand that access needs to be fully resourced. It is an important and necessary investment in our future as a society.

Why not just study for free?

As tuition fees rise across the developed world, often at a pace that significantly outstrips inflation, some are now predicting that the new trend will be to look for higher education remotely, for free. In fact for some time now universities have been making their course content available online. The Massachusetts Institute of Technology (MIT) started the trend 10 years ago, and it now offers 200 courses on its MIT Open Courseware website. Not only can you get free access to programmes from Aeronautics to Writing and Humanistic Studies, but if you complete the online programme you can also get a certificate that you have done so successfully. So, why bother paying $40,732 (the standard MIT undergraduate tuition fee) when you can get the programme and a result for exactly $40,732 less, i.e. for nothing?

Other universities have similar offerings, and indeed there is Apple’s iTunes U that acts as broker of free higher education programmes offered by some of the world’s best universities.

How all this will go may depend a little on how higher education is able to present itself to communities across the world. On the whole, the assumption has been that university programmes have a value based not on their content or available expertise, but on the reputation of their qualifications. A Stanford University degree certificate gets you a better job, or at least a better prospect of one, than one awarded by, say, the University of Northampton. So what the institutions are ‘selling’ is the qualification. But what if society increasingly doesn’t see it that way, and if people come looking for knowledge (in other words, content), and employers for an assurance that this has been acquired (without worrying too much whether it involves a degree)? This will not necessarily mean that open courseware is suddenly all that is needed, but it may mean that the heavily controlled degree programme with its relatively inflexible pathways to a qualification and resulting professional success may lose value.

And if that happens, it may be worth pointing out that the whole funding edifice just created in England may fall apart, because the financial assumptions on which it is based will prove doubtful.

For higher education, these are interesting and unpredictable times.

How should we view student debt?

One of the growing concerns across the developed world is that student debt will increasingly deter young people from entering higher education. In the United States the level of graduate debt is now over $900 billion, a sum considerably larger than American credit card debt. In England individual student debt in the more extreme cases has risen above £60,000.

So is this a major problem in the quest to widen participation in higher education? Not so, according to the English Universities Minister David Willetts in an interview in the Guardian newspaper:

‘We’re trapped in this language of debt. It’s not like leaving university with £25,000 worth of debt on your credit card or anything. If someone said your child was leaving university with £25,000 on a credit card, you’d be quite rightly horrified. If someone said they’re leaving university and during their working lives they’re going to pay half a million pounds of income tax, you’d be completely relaxed. And our graduate repayment scheme is closer to – it’s not exactly the same – but it’s closer to the income-tax end of the scale than the credit-card end of the scale. If their earnings ever fall below £21,000, at that point any repayment stops. It’s 9% of earnings only above £21,000. If you’re earning £25,000, that’s £30 a month. So it is a graduate repayment scheme that has many of the features of income tax. It’s not like some debt around their necks.’

The Minister’s argument is not on the face of it absurd. In fact, if the government had decided to generate the income for universities through a graduate tax, or rather if it had labelled the same scheme differently, the effect might have been different. But it didn’t, and fees will be funded by loans, which in turn produce debt. It is still too early to gauge exactly what impact this is having, but the first visible effect has been a significant reduction in the number of student applicants.

The evidence from the United States, Australia and Britain all points to a similar conclusion: that student loans have unintended consequences and present both a disincentive to study and financial uncertainties attached to repayments. In this setting, it would be wise for countries contemplating loan schemes – like Ireland – to think again. It is one thing to ask those who can afford to do so to pay a tuition fee; it is another to suggest to those who cannot afford it that a loan may be an acceptable form of support. It almost certainly isn’t.

Irish university funding: the continuing uncertainty

Yesterday in the Dáil (Irish Parliament), the Minister for Education and Skills, Ruairi Quinn TD, refused to rule out the return of tuition fees. though clearly showing some level of discomfort at the prospect. However, according to a report in the Irish Times the more likely development will be a continuing year-on-year increase in what is now called the ‘student contribution charge’, perhaps to €2,500 in the coming year. All of this is in the context of a major student protest in Dublin yesterday, and the submission earlier this week of a report by the Higher Education Authority to the government on university funding.

It is clear that the Minister has a difficult task – though admittedly one made more difficult by his signing of a USI-organised pre-election pledge not to reintroduce tuition fees (which I argued at the time was not a good move). The problem is that the Irish taxpayer cannot afford to fund universities properly at the current time, but the political establishment does not want fees. In reality of course the ‘contribution charge’ is now a fee, albeit an inadequate one for resourcing purposes.

In all of this there is a risk of policy drift. Right now it is not clear what the government, or for that matter anyone else, wants to achieve in higher education funding. There is no clear strategy and therefore a large amount of confusion as to what will happen next. In the meantime the global standing of the Irish institutions is eroding, which in turn may damage economic regeneration. It seems to me therefore that the key requirement right now is to produce a clarity of purpose. Uncertainty is the biggest risk of all.

Do the rich go in search of really high tuition fees?

Here’s an interesting analysis. Professor John Holmwood of the University of Nottingham has suggested that the top-of-the-range fees charged by the universities of Edinburgh and St Andrews will act as a magnet for very rich students, enticing them away from the likes of Oxford and Cambridge as these charge £9,000 less over the full degree cycle. As a result, the two Scottish universities will be swamped by super-duper-rich English students, who will crowd out the Scots (who don’t pay fees) and hugely upset the local population with their plummy accents (well, he didn’t say that last bit, but you get the idea).  There is no sign in the report that Professor Holmwood is using any empirical evidence to support his contention.

To avoid any doubt, let me say that I am not suggesting that high tuition fees are desirable, but I am strongly sceptical of the idea that high fees are seen by anyone as a reliable quality statement. Overall in Britain some universities appear to have been attracted to the notion that unless you charge high fees people will assume you’re not much good. In this frame of mind, universities would set fees not in order to cover their costs and provide room for investment, but in order to place a designer label on their degree programmes. So if you follow that logic, a university which is, say, around number 90 in the league tables can at one stroke remove the difference with a university at, say, number 5 by ensuring that it charges the same fees or a little more. The subtext of all of this is presumably that the rich are thick.

There is an urgent need for a proper analysis of the case for and the impact of tuition fees, and of pricing methods in higher education – assuming that (as in England) higher education is not entirely funded by public money. But the idea that price of itself is a guide to quality needs to be nailed, not least because it is an exceptionally stupid idea. It does not become more intelligent if it is used by those arguing against tuition fees, as is apparently being done by Professor Holmwood.

RGU announces fees for students from the rest of the UK

As readers of this blog will know, there are no university tuition fees in Scotland for Scottish and EU students. However, in the light of the new fees régime in England, Wales and Northern Ireland, and further in order to ensure that university places in Scotland are not placed under impossible pressure of demand from the rest of the UK, the Scottish government announced that universities can charge rest-of-UK students up to £9,000 p.a. from the academic year 2012-13.

Most Scottish universities have now announced their rest-of-UK fees, with a number of institutions opting for the £9,000 limit (though in the cases of Aberdeen University and Heriot Watt, these fees apply to three years only, with the final year free to those whose studies cover four years).

Today my own institution, Robert Gordon University, has made its rest-of-UK fees announcement, and we have decided to set fees in accordance with the actual cost of delivering the degrees. This means that we have set the fees in three bands, with fees ranging from £5,000 to £6,750, with one programme (Master of Pharmacy) having a fee of £8,500. Under this framework Scottish students do not subsidise students from the rest of the UK, and these in turn do not subsidise Scottish students; we regard this as a fair and transparent framework.

RGU will also announce a framework for scholarships, bursaries and student support for all students in due course.