Mountains of debt and ignorance

Commentators on teaching and learning in higher education don’t tend to address issues of funding. And most observers of university finances seem unconcerned about the quality of the student experience and the kind of teaching and administration that will deliver robust learning outcomes.

Instead we have hysterical visions of the future English higher education system. Nothing less than apocalypse, it seems, will follow the shifting of the costs of a degree from ordinary taxpayers to the students who benefit. Apparently this will undermine decades of effort to get students from diverse backgrounds into university, narrow the student experience, dishearten academics, and leave graduates with mountains of debt.

We can also enjoy economically-illiterate analyses by journalists who do not know what markets are (except that they don’t like them) and who think that students will be forced out of higher education because they can’t afford it.

Most of this is a compound of self-interest, arrogance and ignorance.

So let me return to the issue of student fees and question some of the assumptions.

The idea that students from poor families will be disadvantaged by the deferred loans system for fees in England is based on fantasy. On the contrary, they are being offered a golden opportunity, as a former president of the NUS shows here.

Why do we patronise students by arguing that they aren’t clever enough to factor in the benefits (not only financial) on offer versus the costs? The private rate of return to higher education is substantial, while every scrap of evidence from the UK and overseas points in the same direction: a system of deferred loans for tuition fees neither disadvantages nor deters students from less well-off families. However, not charging students a large proportion of the cost is effectively transferring money from the poor to the wealthy.

For those who say that universities will become less open to poorer students because the fees are too high, I would point out that all the universities I have worked at would give their eye teeth to attract the best candidates. They are self-interested enough to operate an admissions system that will deliberately seek out and support the students they want, working systematically to attract bright students from all backgrounds. There’s no need for heavy government interference in ‘widening participation’, the root problems of which are in any case laid down in early childhood and in schools.

It’s reasonable to assume that the money value of a degree from an English institution is about £120,000 (there are countless benefits to the individual in non-financial terms as well). As Mark points out, this means you pay £40k and get £120k back. In the old maths like what I was taught (which must have been phased out by the time Guardian journalists went to school) you gain £80k. This would be a brilliant deal even if you actually owed the £40k as a debt (you don’t, because you don’t have to pay if you can’t afford it).

Now the question of the quality of teaching, choice and tuition fees. It’s become a mantra that higher fees imply ‘more demanding’ students; and that student choice will drive up quality. If you keep on saying something often enough, people start to believe it must be true.

But I can think of no reason at all to suppose that paying higher fees will lead to higher expectations, or that choice will improve quality:

  • First off, the fees are not an upfront payment or a mortgage
  • Second, the choice is limited. If I want to study something near to my home, for example, I’ll select among local institutions. If they’ll let me in…
  • Because in any case universities themselves do a lot of of the choosing – not their customers. It’s called admissions policy…
  • Third, there’s no evidence that students actually use information about the quality of their likely experience way to make their decisions about where they’d like to go. Or to be more accurate, no evidence that they use information about the quality of teaching and services. They DO consider location and prestige. Higher education is both a ‘positional good’ (something whose value is a function of its desirability ranking, aka everyone will look up to you if you get a First from Cambridge) and a reason for having a good time among people like yourself.

Finally, the issue of public subsidies for teaching in higher education.

As far as I know, no-one commentating on the student experience has drawn the obvious conclusion from the facts. This is that, from the point of view of both equity and the quality of the student experience, there is no compelling reason for any public subsidy at all. Private returns considerably exceed public ones, and there’s no justification anyway to subsidise through taxes any business that provides public benefits as well as private ones.

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