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Paying My Way

Tuesday 12th October 2010

So, Lord Browne’s report on Higher Education funding was released today. One of his recommendations is for the upper limit on fees to be raised. The government seem to agree this is potentially the best solution, and this seems to have upset people.

As far as I’m aware, there are two sides to the issue of university funding. The first is that universities are saying that they need more money, and the second is that no-one seems to want to pay. Both are understandable. That universities need more money seems to be largely accepted, so all of the discussion seems to focus around who pays for them.

Some say that education should be free, so tuition fees should be scrapped and universities funded out of taxation. I can understand the reasoning, but to my mind it’s pretty unrealistic and even marginally unfair. By getting a decent degree an individual draws certain benefits, be that in higher pay, or in getting a job which they find more enjoyable, or whatever. It therefore seems fair to me that an individual who wants a degree, pays at least something towards the cost of getting that degree. That said, I’d also agree that society as a whole benefits from having graduates – it’s good that we have engineers, doctors, scientists etc around (arts graduates probably less so ;) –  so I also don’t think it’s unreasonable that the state partly subsidises the cost of degrees. Indeed, it’s an investment which almost certainly pays itself back, with interest.

I anticipate that someone might try to throw a curveball by saying that by this logic, I should say that even basic education (and by that I mean up to degree level) shouldn’t be paid for by the state. Exactly the same logic applies though; it’s a massive benefit to us all to have a population with a relatively good education (because it means the workforce is more capable). Additionally, everyone makes use of basic education services, not everyone goes to university. The two things are very different, so it’s easier to justify state financing of “basic” education (although perhaps less easy to justify state provision of that education).

Essentially, I don’t have a problem with fees. But at the same time, I think it’s crucial that the fees charged don’t make it impossible for some people to go to university. It would be tragic if people who would do well at university were stopped because they couldn’t afford it. In that sense, I think that the current loan system is pretty good. You don’t have to pay anything up-front, you only start paying the loan back when you earn over a certain threshold, it tracks inflation so is essentially free, and if you don’t pay it off after a certain period then it gets written off; I wish I could get such generous terms for my postgraduate loan! As far as I can see, the fee and loan system (coupled with the means-tested grants that are available) means that there is no practical financial reason stopping  the vast majority of capable students who want to study a degree, irrespective of their financial background.

To my mind this is fair, even with the possibility of increased fees (in fact increasing the fees makes much sense to me). Especially when compared with the idea of “free” degrees. Because paying out of taxation doesn’t make them free, it just distributes the cost around everyone, and I don’t see why other people should be made to pay (completely) for something which will benefit me.

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For what it’s worth, there are a lot of additional reasons I can think of for not ignoring the recommendations from the report; the argument presented here merely addresses the principle of tuition fees

Posted at 10:37 pm | Posted In: Politics Tagged:

4 Comments:

Lucy

Wednesday 13th October 2010, 10:08 am

The problem with that report is that like so many before it, it’s tackling things completely the wrong way round. The HE sector is in a complete shambles, and chucking (other people’s) money at it indiscriminately is not going to solve that.

First, they need to decide on the main purpose of universities. Are they centres of academic learning? Is their knowledge, should their knowledge be a marketable object, and thus should research be subject to market forces? Why should students be going to university? Should teaching and research money/ staff come from the same resource pool? Where are the tuition fees going exactly, and is that appropriate?

A whopping tuition fees hike based on the promise of returned investment is fine so long as there are enough suitable jobs for graduates which can return that investment – but there aren’t. If you look at their calculations and numbers, they are not expecting a substantial proportion of the student body to ever be able to pay back their loans. An economy based on loans and pretend money – now where have we heard that before?

As for benefit to society, scientific and cultural advances benefit everyone. A well constructed building or a new cancer treatment doesn’t discriminate against non-graduates, so why should there not be a taxation cost? (Although I accept that ‘free’ degrees are possibly taking that argument a little far.)

Any half-decent management consultant would tell you that this report isn’t worth the paper it’s written on.

Jenny

Friday 12th November 2010, 1:18 pm

I can’t see what’s wrong with a graduate tax myself. If it only applies to graduates and is only a few per cent on top of income tax, it hopefully means that between those who graduate and earn lots of money, and those who graduate and never quite make it above the threshould, one way or another we, the people, make a decent contribution to the education we recieve at university.

And yes, perhaps if you’re on a six figure salary, you end up paying well over whatever your degree actually cost, but seriously, that income is probably at least partly thanks to your degree so I don’t feel one would have a right to complain because look how much it’s got you in the end.

However I think I have a far more magnanimous attitude to fair and reasonable taxation than your average Joe.

Otherwise – completely agree with Lucy.

Dickie

Friday 12th November 2010, 9:03 pm

The main issue with a graduate tax, to me, is the fact that it involves money flowing directly to the state, rather than directly to universities. That’s something to be avoided, although I’ll grant that someone with a more socialist worldview may have a different opinion about that…

From a student’s point of view, if you have no problems with a graduate tax then what do you think is wrong with the proposed system? They work in pretty much the same way, except that with the loan system the maximum repayment is capped (at whatever the fees cost).

BTW – partly responding to Lucy’s comment – I didn’t say that I think students should pay the whole costs of universities; I think it’s right that fees are partly subsidised by taxes. Which they are, and will continue to be. AFAIK all that’s changing is the proportion of fees to subsidy.

Lucy

Saturday 13th November 2010, 11:16 am

Money already goes to the state, effectively. Granted it’s via the universities (students pay universities, state thus reduces its own contribution), but it has the same net result.

I think that’s what I dislike most about this whole furore – it’s that the majority of the population are being deceived as to WHY the fees raise is (or isn’t) a good idea. If the government said “We’re broke, we need students to pay more in order to keep the universities going.”, it wouldn’t be popular but at least it would be honest. This crap about returned investment is bullshit, because so many people go to university now that the average job a graduate ends up doing does not have an improved financial return on the non-graduate market.

The point about a graduate tax, as I understand it, is that those who have managed to access a higher paying job thanks to their degree pay back accordingly. Those who are struggling to get by on a job they could have taken when they were 18 will pay back less. The thing is, there are no jobs for all these graduates to go into. On his last search on the JobCentre site, J found 40 jobs – for the whole of Birmingham.

Also, there seems to be this common misconception that universities exist primarily for students. They don’t. They primarily exist for research purposes, and in the vast majority of cases, this has nothing to do with the students whatsoever, only reducing the quality of their degree input, if anything.

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