Debating tuition fees is a distraction from the real changes we need to see in our universitiesby Jo Johnson / August 14, 2017 / Leave a comment
It is worth taking a step back from the furore over Labour’s abandonment of its pre-election promises to ask why and how we fund higher education. In a global knowledge economy, in which countries are putting science, research and innovation at the centre of their productivity strategies, our student finance system must have three goals. It must: remove financial barriers; ensure our universities are funded efficiently and held to account for student outcomes; and share the cost of higher education fairly between students and the taxpayer, reflecting the mix of private and public benefits.
The English system of tuition fees and government-supported loans meets all three objectives. Young people from the poorest areas are now 43 per cent more likely to go to university than in 2009/10, and 52 per cent more likely to attend a high tariff institution. Statistics show the proportion of young people on free school meals going to university is at a record high. Drop-out rates, too, have also come down. Our universities now enjoy 25 per cent more funding per student per degree than seven years ago.
And the system is fair on taxpayers: a university degree boosts lifetime income by between £170,000 and £250,000. Students pay on average roughly 65 per cent of the cost through fees, while the taxpayer shoulders around 35 per cent, through teaching grants and loan subsidies, and a much higher share if we add £6bn of annual investment in research. This is an equitable split.
Jeremy Corbyn would land the taxpayer with the entire bill—a regressive subsidy from less wealthy non-graduates to richer graduates. Moreover, without tuition fee income, universities would struggle for public funding against other spending priorities. The result would be reduced funding per student, strict rationing of places and risks to institutional autonomy from increased government dependence. Take Scotland, where the policy of avoiding fees has led to a squeeze on funding and a cap on places, with, according to the Sutton Trust, “particularly negative consequences for less advantaged students.” English universities are no stranger to the risks. In the two decades before fees, funding per student fell by over 40 per cent, and caps meant fewer young people from disadvantaged backgrounds made it to university.