Friday 22nd October: Fighting Fees

Last Tuesday the Independent Review of Higher Education and Student Finance led by Lord Browne of Madingley recommended removing the £3,290pa cap on UK student fees. The prospect of unlimited fees has lead to student protests, including at the LSE (see image attached). But do they have anything to complain about? Any UK student who is admitted to a UK higher education institution will have their fees paid upfront by the government, and repay the loan at a fixed percentage of earnings once they are working and earning over £21,000, with breaks in repayments for those whose earnings fall below threshold. Those who don’t manage to pay off their loan after 30 years will have the rest of their loan written off.

The private benefits of higher education in the UK are over 50% higher than the public benefits – a figure which is higher than for other OECD countries – though private returns are still higher in most OECD countries. So why do only Korea, Japan, New Zealand, Australia and Canada charge fees over $2,000?

What are the implications for equity of these proposals, and for access to the most selective higher education institutions? Are students able to make accurate decisions about the returns to higher education, and is this ability to discern returns and discriminate between universities heterogeneous across student groups? In the UK, since the introduction of higher fees (and more bursaries for poorer students) in 2006, access to higher education as a whole amongst those from the poorest in society has risen, but yet the proportion of students from lower income families attending the top third of universities has remained flat since the 1990s. On the other hand, is it equitable for students at the most and least selective universities to be paying the same fee of £3,290, as is currently the case?

Will these proposals, as promised, allow Universities to access levels of funding that will allow them to compete internationally, particularly with US schools? Or do the proposals simply shift the burden of paying for higher education from the taxpayer to the students, whilst in the wake of the Comprehensive Spending Review universities struggle to retain current levels of spending per student at levels of fees that students will accept?

Suggested readings

A brief summary: The Guardian Q&A on the Browne Recommendations: http://www.guardian.co.uk/education/2010/oct/12/tuition-fees-questions-and-answers

Implications of the market for fees: From the BBC http://www.bbc.co.uk/news/education-11520958

Some economic analysis: IFS briefing on Browne Review Recommendations: http://www.ifs.org.uk/pr/browne_review.pdf

Widening participation at the most selective institutions: http://www.offa.org.uk/press-releases/director-of-fair-access-sets-out-way-forward-for-widening-access-to-highly-selective-universities/

Link to the Comprehensive Spending Review: http://www.independent.co.uk/news/education/education-news/universities-face-cuts-of-1634bn-leaked-memo-says-2108195.html

Longer reports:

1) The Browne Review: http://www.bis.gov.uk/assets/biscore/corporate/docs/s/10-1208-securing-sustainable-higher-education-browne-report.pdf (there is an executive summary included in it, but to be honest, it’s pretty idiotic – just a statement of good things about the recommendations without any analysis

2) For international comparisons: OECD Education Indicators, September 2010: http://www.oecd.org/dataoecd/45/39/45926093.pdf