ALISON WOLF In the past 20 years, Britain has stumbled into a system of mass higher education. It is enrolling larger percentages of young people than most other comparable countries without having thought clearly about how the new system should be structured or what its purpose is. The economic advantages are disputed and with an overwhelmingly middle-class student body the social mobility effects are, at best, unclear. Moreover, on the one hand, a mass system is said to be incompatible with having world-class universities and, on the other hand, it also seems to be an obstacle to developing the vocational and technical education that a lot of people, including business, want. There is no disagreement, however, that the system needs more money. Public funding per student has halved since 1980, and academic salaries have fallen sharply. Total UK public spending on tertiary education (1.1 per cent of GDP) is now well below the OECD average and less than half the US level. The big political question is: who pays for the continued expansion? In the past few months, there has been a shift towards the idea that students, who benefit from the higher incomes and better jobs that go with a degree, should pay more of the costs (the wealthiest 40 per cent now pay ?1,100 a year in England and Wales). But there are big differences on how they should pay-variable “top-up” fees, uniform fees, a graduate tax or hybrids, such as the Scottish system-and on how much money should continue to come from general taxation. What do you think?
NICHOLAS BARR How do we get more money? I think it should come from tuition fees. There is a lot of confusion over top-up fees because they throw up two questions, not one. First, should fees be the same for all universities, or should they be different? My answer is that they should be different. Second, should those fees be paid up front, or should they be deferred? My answer is that they should be deferred, which means higher education is free at the point of use but students pay their tuition fees through an income-related repayment. This is the Scottish trick. They haven’t abolished fees, as they claim, they have abolished up-front fees-most students still have to pay ?2,000 per degree course, which they pay back after graduation, as they do with their maintenance allowance loans. Repayment-as in the rest of the UK with loans-is 9 per cent on earnings above ?10,000 each year until it’s all paid back, so with a well-paid job you can pay it all off in under ten years.
WOLF Would the university get the money up front?
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