By Ian Toone, Principal Officer (Education)
With a General Election approaching, students and higher education staff are, understandably, turning their attention once again to the thorny issue of tuition fees. Should they be scrapped or reformed, or is the current system fit for purpose? The debate has been further fuelled by the publication of a report by the Higher Education Commission (HEC) – Too Good to Fail: the Financial Sustainability of Higher Education in England.
The report warns that the current fee regime is failing everybody – students, universities, government and taxpayers: ‘We have created a system where everybody feels they are getting a bad deal’.
Value for money?
Whilst some students (particularly those from low income families) may have been put off from applying to university because of the thought of running up so much debt, many more are questioning whether they are getting value for money, especially as contact with, and support from, lecturers appears to have declined in inverse proportion to the increase in tuition fees.
What many students may not realise is that much of the debt they are accruing will eventually be written off because many graduates will not earn enough to meet the threshold income for repayments.
Universities are feeling squeezed because they are subject to similar austerity cuts that affect other publicly-funded services. Although there is a perception that they should be awash with money because they are charging fees of up to £9,000 a year per undergraduate student, many courses (for example, medicine) cost more than this to deliver, and both capital funding and direct teaching grants have been reduced.
As student loans are only paid off gradually over a period of 30 years (and then only if graduates are earning over £21,000), the Government is having to pay for higher education by funding student debt, and might end up writing off much of it, which may well mean that the new system proves to be more expensive than the old one. In practice, this means that a greater burden will fall on tax-payers to subsidise a failing system.
Supporters of the current system argue that it is graduates who have most to benefit from having a degree and so they should be required to pay for it, whereas this is contested by others who argue that the value of universities to the UK economy and society in general far outweighs the diminishing returns that accrue to individual graduates, so society (the tax-payer) should shoulder more of the financial burden.
This situation is particularly relevant to England, as both Wales and Northern Ireland charge much lower fees to home students, and Scottish students generally do not have to take out loans to study at Scottish universities. This raises the question of why England needs to charge so much for higher education when it is either free or more heavily subsidised in other UK jurisdictions.
Options for England
The HEC’s report offers six options for the sustainability of higher education in England:
- tweaking the current system;
- introducing a graduate tax;
- lowering fees and increasing direct grants from government;
- allowing universities freedom to raise tuition fees;
- setting differential fees according to the costs of delivery of different courses and potential graduate earnings; and
- a hybrid system which combines elements from the other options.
There are no easy answers, and the debate continues, but if you have any suggestions, do comment below.
[Article written for Janaury 2015 Your Voice.]