Daniel Korski

A degree of truth

A degree of truth
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Tuition fees work. By the standards that any progressive is supposed to hold dear - higher overall participation rates in universities and higher participation rates among low income groups – experience from other countries shows that fees work. As the think tank Centreforum showed four years ago in an in-depth study, fees have long been the norm in Australia, New Zealand and the United States and these countries have seen “their universities’ reputations grow and their higher education participation rates rise across the social spectrum.”

Meanwhile, the UK has been sliding backwards. In 2000, the UK had the third-highest graduation rate among OECD countries, with 37 percent of young people getting a degree. The average was 28 percent. But in 2008 the proportion had fallen to 35 percent, below an average of 38 percent.

As the Centreforum report explained, in other countries higher “fee income not only allows for significant investment in teaching infrastructures and staff recruitment, but because it frees up resources that can be recycled in the form of scholarships and bursaries to help bring students from low income families into the system.”

In addition, charging payment for higher education is also fairer. That is right: fairer. Paying for universities exclusively through taxes redistributes resources from the poor to the rich. You pay whether you benefit individually or not and whether you are rich or poor. But some kind of contribution scheme ensures that those who benefit pay, and that those who benefit the most, pay the most.

What about the surveys that suggest that raising the cost of a degree would deter many of those from the most deprived backgrounds who would otherwise have gone on to higher education? Ask me if I want to pay more money for something than I am now and I too may claim that the price will deter my future choice. But the empirical record shows this not to be the case. It could change, but is unlikely to do so in the medium term.

Personally, I think there are additional advantages to higher tuition fees. First, it ensures that students are more likely to choose degrees that are more likely to get them jobs after studying - not a bad thing for them and the country. And second, fees will likely give the students more power. If they do not like the service they receive from one university they will be loud about it and ultimately go elsewhere if things do not change. That, too, will improve education services - though it will require much better data for students and parents to compare the universities.

If there is one draw-back, it is the risk that some students will end up, despite their higher education, with low incomes - and thus a large debt they cannot pay back. The key to address this is to ensure that loan schemes are well-developed and that loan repayments are income contingent – so if you cannot pay, you will not and others pay what they can afford. Which is the government’s very plan.