The Great UK University Fee Debate



If the answer is £9,250, what is the question?

According to a number of leading university ranking providers (and please free to research this yourself), a number of well-known universities are regularly ranked amongst the poorest in the UK for employability. I haven't met the institutions recently nor assessed the ranking methodology. Nor, I would guess, have the thousands of students that will be applying to them this year.
Irespective of these universities’ track record of employability, they will charge the successful applicant £9,250 per year in tuition fees. One may view that as market forces etc., but for the benefit of my international readers let me remind everyone that the vast majority of universities in the UK charge £9,250 per year for tuition fees over a three-year degree course.

Most industry pundits anticipated that only elite institutions would take advantage of the new maximum fee after the introduction of the last and most dramatic fee policy change. Alas,no.
I am not an economist and don't want to use this space as a treatise on how a more efficient market would put consumers and students into the right institutions. But I am unsure if there is another market where such a system would work or be deemed acceptable.

UK students did not pay tuition until 2001 when Tony Blair's administration allowed institutions to charge approximately £1,000. Subsequent changes in 2004 pushed the cap to £3,000 (in England ; devolution of responsibility led to other changes in Wales, Northern Ireland, and Scotland). The Browne Report in 2010 increased the limit yet again; this time to £9,000. The cap sits at £9,250 for 2017-18, and the averag fee is just shy of the maximum at £9,110.
It is either the audacity of the low performing institutions or the benevolence of the best universities that this system is allowed to continue. In either case, we have is a system open to challenge, which could be viwed as continually topping up the coffers of the poor performers without any regard to outcomes. Not surprisingly the average salary of the university vice-chancellors has risen sharply with some eye-watering examples of fiduciary abuse and poor governance. It also may explain why there was a fifteen-fold increase in unconditional offers for university places between 2013 and 2016. Revenue maximisation seems to be the mantra for institutions rather than relevance for students. Students could easily percieve this as short term gains over concern about outcomes. 
So what about the student as the consumer of education? How can the student be assured value for money? I believe that value is visible in institutions higher in the ranking that invest in world-class faculty, research, innovations as well as building partnerships with industry. While institutions like Cambridge and Oxford have been joined by the likes of UCL, Warwick and LSE, there is a race amongst the mid-tier to improve facilities and student engagement through a disciplined deployment of an ever increasing capital pot. That can only be a net benefit for students.
The student, however, has to weigh up where to best study while knowing full well that, in most cases at least, they will be taking on tuition fee debt as well living costs before they earn a penny from employment. You can see why student and parents are now pausing before thinking about higher education when nearly £60,000 is at stake.
It isn’t helped by political rhetoric around the subject. When ill-informed politicians claim that upto 70% of student debt will no doubt be written off, one has to feel for the 30% that will not only repay their student debt but by virtue of taxes (direct an indirect) will be saddled with the 70% as well.

There is currently no meaningful penalty for poor institutional performance. Should student employment rates result in a tuition fee clawback? Should students be afforded rights like others consumers?

The UK is moving toward a market style arrangement; one that allows institutions to set their fees (within a rapidly climbing cap). Should we then balance the equation by allowing students great market-style "rights", such as greater access to reimbursements?

I suspect that this will force institutions to focus more on vocational qualifications and ultimately drive down the funds going toward unpaid student loan and other costs.

If not and students and their parents believe institutions are primarily concerned with revenue maximisation, students will behave more like consumers.

So, if £9,250 is the answer, the question the students must ask is whether they are getting value for money as well as the skills and qualifications they need to enter their chosen vocation.

Dan Sandhu

Keith HampsonComment