Tuition Fees

December 10th, 2010

Watching the news last night I realised that I wasn’t completely sure what I thought about tuition fees as a concept, let alone the various proposals that seem to have got people fairly wound up. The majority of the story in relation to this proposal has been, rightly, pulling the Liberal Democrats up on their rank hypocrisy. I hadn’t really seen any of the other political parties proposing to do anything radically different, so didn’t give it much thought.

The Liberal Democrats really should learn that if you are going to renege on a promise then don’t do it on one where you have been filmed making it or where it affects lots of people with both free time and energy.

Watching the TV last night I realised that the attention brought to this issue through constant demonstrations and… yes, violence, has made me really think about what tuition fees mean for the first time. I don’t have any kids and my University days are a long way behind me, so far in fact that I went to a Polytechnic. I did have a small student loan and it took me ages to pay it off and caused me no end of credit problems. In the end it was help from my parents that stopped it resulting in debt collectors. Though as I say that was a long time ago and not really relevant to the situation now.

I suppose I should have started this by saying that I in no way support violent scenes blah blah blah don’t throw an egg at a Prince blah blah think about the children.

Actually I don’t agree with any of that. If kids want to go to London and have a ding dong with the police then fair play to them. Both sides are consenting adults (mostly) and I believe both sides get a lot out of it. I am, in many ways, grateful that young people have the motivation to protest about something which I can’t be arsed to do myself. I’m too old, too lazy and too scared of the cold to do anything like that.

Since the coalition have come to power they have defined everything under the imperative to decrease spending and the need to reduce the deficit. Deficit reduction in itself is obviously something that needs to be done but it is a moot point on whether the most expedient way of achieving this is purely reducing spending or also maximising tax revenue.

The question about tuition fees appears to be fundamental to this overarching theme. The story says that money paid to University’s is unsustainable, graduates need to pay us back for their education and don’t worry about them, they earn a fortune anyway.

One of the central pieces of evidence to support the increase of fees to a maximum of £9k pa is the claim that over their lifetime a graduate will earn, on average, £100k more than they would if they did not have a degree.

I find this interesting in that it appears to contradict the need for tuition fees at all. If someone, on average, will earn £100k more than they would without a degree then, on average, they will repay the cost of their education through income tax. We do not incur debt through people going to University, we actually profit. We actually profit substantially.

Our economy clearly needs people to earn these greater amounts in order to maintain tax revenue. It is strange that rather than look for the most appropriate way to maximise this revenue we have tried to find a solution whereby people graduate but we don’t have to pay for it.

In times of decreasing tax revenue the Government can only really fund higher education through borrowing the money itself or making someone else borrow it. It is a simple fact that Government can borrow money much more cheaply than a collection of individuals.

So we have a a situation where we have chosen the least efficient solution for the nominal position of “saying” we have reduced public sector borrowing. We have really only moved the debt burden from wider society to the individual. It should also be noted that the loan to students isn’t really from the Government. It is from the private company/QUANGO the Student Loan Company. A company required to make a profit, albeit minimal. This means that the total cost of borrowing for students as a collective is still greater than the Government just allocating funds to Universities.

All of this is really premised on ideology. There is an all encompassing view in the statutory provision of services that choice must govern all decisions. Thus through students choosing their University and taking their money with them the system will begin responding as a market and become more efficient.

This ignores one fundamental fact about higher education. We already have a long established system of choice that uses the currency of educational achievement to distribute people around the system. This is a far from perfect system but it does work.

Besides the issue of choice there is a ridiculous preoccupation with the idea that we are paying for pointless courses. This is the annual newspaper story about someone getting a surfing degree and now won’t be able to get a job and we have to foot the bill. Ignoring the fact that this is probably, in reality, a qualification in marine engineering that makes someone eminently employable this belief defines media attitude to courses.

I understand that extensive research has demonstrated that tuition fees will not reduce the number of people that go to University. Maybe that is true, it seems counter intuitive to me but if this has been proven then fair enough. I do believe that fees will shape the nature of courses that people now enroll on. Resultant earning capacity will be a much greater influence on choice.

In practical terms this is good because it drives up tax revenue but for wider society this is a very bad thing. We need people that do jobs like physiotherapy, research scientists and even planning officers. All jobs you need to be well qualified for but not very rewarding. Under the coalition plans it might be true that those graduates that earn the least pay the least but if we deter people from entering these essential professions then we lose out.

One of the good things about supporting eduction through central taxation is that we as a society have an investment in it. If someone chooses to become a teacher then we don’t just benefit through the tax they pay, we also benefit through their ability to give society more knowledge.

If we have paid for this then we have some control of the structure of their higher education and the way it is applied. If higher eduction is merely a contractual relationship between the individual and the institution then society loses the capacity to plan for the future.

I think I’ve written considerably more than I intended to on this and probably much more than I should have done. Much of this boils down to my concern that the first act of Government should not be to pass the responsibility of Government to the individual or the state. When I go to work my first act is not to find someone else to do my job for me.

Well I should say thanks to all of those young people that made me really think about something that I thought had nothing to do with me. So, violence does work.


Posted in Politics | Comments (1)

One Response to “Tuition Fees”

  1. Maria Harvey Says:

    Very well said, especially thinking through the economic arguments. I would only add the consideration that people are angry about the ‘all in this together’ crap that they can see as blatantly false – no such austerity measures or tightening up regulations are applied to banks and companies avoiding paying tax. For some, student fees are the tip of this iceberg of hypocrisy.

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