Fees + Funding = A Crisis for UK Higher Education and Universities

Browne Review

Lord Browne's Independent Review has called for a radical overhaul of what universities can charge students for their education, amongst other recommendations (NOTE: to date these are just recommendations, and have not yet been implemented by the coalition government, although they have been relatively widely accepted.)

Comprehensive Spending Review

As part of the Comprehensive Spending Review, Chancellor of the Exchequer George Osborne announced drastic cuts to the sector - up to one third less for universities over the next four years. Some journalists (I won't name names) are making the mistaken assumption that increased fees (from the Browne review, above) will make up the difference.

Problems

There are so many inherent difficulties that need to be addressed about these two issues, it's hard to know where to begin. So I'll attack it, briefly, from the perspective I know best: advancement.

On the face of it, allowing universities to charge what they wish (up to a certain limit, and subject to certain conditions) creates more of a "market" for higher education, more like the American model, which is exactly what the current government is after. Differentiated fees will create new challenges for internal marketing teams, and perceived value and "prestige" will likely take on even more importance.

Questions

The crux of the matter lies in the fact that "students won't be required to pay fees up front" but instead will be extended loans to cover them, and will not be asked to repay until they are making £21,000 per year.

Will students care then, whether their tuition fees are 5K or 10K per year if they may never have to repay it? If the recent strikes tell us anything, they do. But it seems a disincentive to work.

Will more scholarships be necessary in order for second tier institutions to attract the best students? Likely. We are seeing an increased interest in fundraising, particularly as the 2011 HEFCE matched funding programme draws to a close.

What will happen to widening participation? Even at the lowest level, given cuts, universities will need to charge the minimum 6K per year plus expenses. Will this put the neediest students off? HEFCE has already announced the closure of Aim Higher.

How many universities will close or merge in order to reduce costs and duplication of services? How will this affect their communities, and again, students for whom physical access is an issue?

Finally, a graduate tax will undoubtedly have a very negative effect on fundraising efforts from alumni. While most universities will probably need to step up their fundraising efforts in order to close the funding gap, what alumnus or alumna will want to or have the capacity to give when their paycheque is already being siphoned off to pay their debt?

Answers

The UK HE system is without a doubt a system in crisis, and will soon have the highest tuition fees in any country with a publicly-funded system. Assuming the government does take on this level of subsidized debt on behalf of the students, it's not a financial solution either. While students may not feel the impact immediately of the raised fees, the very notion of carrying this level of debt with them throughout their lives will undoubtedly have a huge impact on recruitment - certainly to the "lower ranked" universities, which in most cases still provide returns on investment and quality education. The UK itself will likely suffer most, with decreased long-term competitiveness as fewer students attend university. Although higher fees are accepted elsewhere - namely the US - they were not brought in with a sea change of reforms but rather slowly, allowing for cultural adjustments. Such is not the case in the UK, which would like a cultural revolution overnight. But that won't change the fact that parents won't have saved up enough, students rarely take on part-time or summer jobs, or that deep discounting allowed by endowments to help the poorest of students simply aren't available. Universities are not seen as a worthwhile charitable cause, but rather a public good.

Browne, and the UK government if they choose to accept his recommendations next week, are setting the sector and the UK as a whole up for failure if they think tripling tuition fees overnight and cutting 75% of teaching budgets is the solution.