December 10, 2010

Higher education funding

So the vote is through the commons, and it’s likely that future students of higher education will have to pay up to £9,000 a year in fees. Student bodies have of course opposed this, with predominantly their own self interests at heart. Yet no-one really seems to have an alternative. So what really is the protest about?

Let’s look at the problem. Higher education is expensive, and needs to be paid for somehow. Traditionally, this funding (for UK students at least) has predominantly come from the government. In past times where student numbers were low, this was a sustainable model – the brightest and best went to university whilst everyone else got by with O-Levels, A-Levels, HND’s etc. Then it all started to go wrong with the drive to increase student numbers. In an attempt to fund the previous government’s frankly ridiculous target of sending 50% of people to univesity, in came tuition fees to much protest. Initially around £1,000 and then raised to the current £3,000 a year cap, much has been made of this fairly modest contribution by students to their education.

Now, the party is over and the public money has run out. The UK, like many western economies, has built up a massive debt and deficit, which must be curbed in order to avoid economic catastrophe. Most areas of public spending must come down in order to achieve this, and higher education must do its bit. What previously was seen as a right to free education for all now looks like a luxury that we can’t afford. With the numbers of people now attending universities, the lines must be redrawn.

So, the question really is, why is it everyone’s right to free university education? Free education up to the age of 18, few would argue with. But by the age of 18, young people are perfectly well equipped to go forth and start work, learn a trade or a profession. University has traditionally been the route for those who wish to take on the most challenging careers in law, medicine, science or academia. These career paths demand abilities and skills that require academic learning beyond the A-Level stage. The principle beneficiaries of these educated people are the students themselves, who go on to command higher than average wages, and the instituions that employ them.

Aha, you are probably thinking at this point, but not everyone who goes to university does benefit financially. Well no, I wouldn’t dispute that. That’s because many people who go to university now don’t actually need their degrees to go on and perform the jobs they take on in society. But as the number of graduates exceeds the demand, employers can be picky and selective, giving preference to or even making a requirement that applicants have degrees that they don’t really need for their jobs. What we have is an over-qualified workforce.

Some of you will still be thinking that my arguments exclude those whose chosen profession really does need a degree, but leads to low paid work, for example in social work. My own opinion is that in a lot of cases, we should be exploring alternatives to the degree for such work – such as a system of work-based learning and part time study at further education college, which if well designed could lead us to have even better suited people in these professions than the academic degree route. The fundamental point is though, that any profession that requires a degree but isn’t offering the wages to pay for the tuition fees is receiving a public subsidy by the government, because they are not paying out for the level of education they need in their staff.

The current system is such that all professions essentially receive this subsidy. By increasing the fees charged to students, the true cost of higher education is being made more visible to students and their eventual employers. For many, their profession values their qualification as it should and it is only fair that as a well paid professional they should have to pay for the benefit of the education that they received, which is now providing them with a quantifiable financial benefit, and their employer is paying for the cost through their higher than average wages. If this is not the case, then that profession is receiving a subsidy and this should be achieved through alternate means, either by the government increasing wages for low paid public sector professionals who are in genuine need of a degree, or by directly subsidising the fees of students who take up these courses with a commitment to public sector work upon graduation. By having to pay what it actually costs, students will also re-evaluate whether they really need a degree to do their chosen profession, and in time student numbers will probably naturally come down a little from their current levels. This is the nature of supply and demand; to argue against this is to argue for the state to subsidise an over-qualified and under-paid workforce, which is a nonsence.

Many of you reading this will find my justification for tuition fees as abhorrent as the fees themselves. But what are the alternatives? Well, I see three main alternatives:

  1. Carry on as we are, keep fees at current levels or even reduce and abolish them. State subsidy for higher education will increase, the workforce will continue to be over-qualified for the jobs that they do, the government finances take the hit and other areas of public spending have to take a bigger hit to compensate for the spending. Not an ideal option in my opinion.
  2. Reduce student numbers and make higher education more academically exclusive, limiting to say the top 25% of achievers. I’d support this as an alternative, but many wouldn’t – not least the NUS would have a seizure. It also doesn’t have the neat supply/demand and visible true cost of education benefits that fees do, and the government still has to pick up the tab for those who go.
  3. Have a graduate tax. This isn’t actually any different to tuition fees loans for most people, except that you’d have to pay tax for your whole career instead of just paying back what you borrowed for your education. Thus, the best paid professions would be subsidising the least well paid professions. This option is attractive to liberal types, presumably because they see it as a great way of bashing corporate high fliers to subsidise a utopian dream of university eduaction free for all. The reality of this system is little different for all but the highest paid, who are effectively being actively encouraged to pay for their education elsewhere before returning to the UK for work, thus neatly avoiding having to pay the tax in the first place. Has little merit over fees in my opinion, whilst adding some flaws.

Of these options, clearly my view is that higher fees are likely to become a permanent feature of higher education, and rightly so. The idea that poor students will be deterred by going to university because of the debts shows either a fundamental misunderstanding of the terms of the loans – paid off by the state after 30 years, only paid back when earning over a very comfortable threshold, not a commercial loan in the strictest sense – or a liberal belligerence that refuses to accept that good quality higher education costs serious amounts of cash, and it’s not on for the government to indefinitely fork out for their benefit.


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