The unfortunate case in favour of fees (Higher Education - Free for all or Fee for all?)

Member Name: Modena

Product:	Higher Education - Free for all or Fee for all?
Date:	08/06/01 (172 review reads)
Rating:

Advantages: (Pro fees) Higher education can be almost fully handled by free markets. , It’s like the tax payer funding Microsoft for research. The old system was designed for the 1960s, universities need more freedom., The scheme is overall redistributive to the poor.

Disadvantages: (Anti fees) The poor are hit hardest. , Applications down, drop outs up. , The loans system is not up to scratch yet.

I was one of the first batch of students who had to face tuition fees when I entered higher education, this opinion outlines the unfortunate yet rather clear case in favour of them, I don’t know how many “not useful” ratings I’ll get for this, but here are the facts.

I started my Bachelor’s degree in autumn 1998 and this was the first year where students entering further education had to face tuition fees of up to £1000 and a significant reduction in means tested student grants with these “topped up” by increases in the loans available to students.

>>The problem/time bomb
The pre 1998 system was one designed for the 1950s, 50 years ago, there was a small number of universities, which were of similar quality and offered a narrow range of degrees.

We have moved from an system with a 5% participation rate (1960s) to a mass system with a participation rate of 30%, nearly half of the 30% having occurred between 1990 and 1996. The way that the government funds universities was to pay them a price per student and also restrict them by setting a quota for each degree, thus determining each university’s income from tuition fees. The current system is basically the same, but the money (£1000) comes from the student, though this is means tested as we shall see later.

Added to the problem of a higher participation rate, we have the problem of more universities, more degrees on offer and a larger range of costs facing universities. Top universities have to pay the wages of their international megastars, and maybe their more expensive land, yet they receive the same money per pupil as say as ex-polytechnic, that isn’t really fair. This has nothing to do with paying fees or not, but universities need independence in order to progress, what I am arguing is that some should be allowed to charge more, to keep their international megastars and pay for their “justified costs”, I m
ean is it fair that someone going to Oxbridge pay the same fee as xxxxexpolytechnic? Universities are allowed to set the fees of overseas students, Master’s students and Part-Time students at present.

>>Dooyoo like redistribution from the poor to the rich?
The tuition fees/grant reform benefits the poor relative to the rich. Basically, the rich are more likely to go to university and therefore they are the ones who have to fork out. Thus we are redistributing from rich to poor. However it is clear that poor undergraduates are worse hit here, because they are more reliant on these aspects of student funding.

But tuition fees are means tested, if their parent’s “adjusted net” income is less than around £18,000, then they are exempt from the £1,000 fees, and you don’t have to pay the full £1,000 until this “adjusted net” income figure is over £26,000 ish. However rich and poor having the same student loan entitlement is unfair, and is estimated to be 20% too low, loans are now repaid on a pay as you earn basis, which is better than the ridiculous mortgage style ones beforehand, it is estimated that 15-20% of these loans will NOT be repaid. That’s good for the taxpayer right? Better than having to fork out 100% of it, think about it, we are basically transferring money from students to other people. It’s not a “graduate tax” either, you aren’t taxed for eternity for being a graduate!

>>The arguments against (the myths)

>The poor can’t afford fees
The argument that the poor can’t afford tuition fees is as I said incorrect because they don’t have to pay them. However it is probably immoral to charge the poor for education with respect to their loan/grant entitlements. If one is genuinely poor, then I believe that they can be a little more thrifty/prudent during their university years, maybe spend a little less on beer for a start I think. <
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>Higher education is a basic right, so it should be free
So is food, should that be free? The difference between higher and secondary education is that students are more aware of the product they are “buying”.

>Graduates have higher earnings therefore they pay more taxes and we should pay for their degree through higher taxes
If you accept this, then Microsoft is profitable, and therefore it pays higher taxes, and this means that the tax-payer should finance Microsoft’s research.

>Less people are applying and more people are dropping out
In my rather right wing opinion, I think this is a good thing, people that feel it’s not worth it will not enter, they might be the ones wasting their time at university. This is the same for the increased drop out rates, I am sure they are intelligent to make their own minds up.

>>What’s needed to progress?
The UK has one of the best higher education systems in Europe in my opinion, but we trail very far behind the USA, we need to introduce market forces into the system, maybe we might attract top academics from the USA. I am not arguing to a total free market, because that way, some universities will charge extortionate prices and unpopular subjects will vanish.

>Flexible fees
This has been argued earlier (universities face different costs etc). Universities, should also be given more independence on their research activities, but this should be regulated to prevent universities bowing down to commercial forces. Also allowing quotas to be increased adds to the flexibility and more students can study what they wish to, for the course I am taking there is a 10:1 applications:places ratio!

>Better loan scheme and grant scheme
It’s the poor students that are hardest hit and maybe a grant can ease the pain, and an income contingent loan with subsidized interest rates will be logical.

>Active measures to promote acce
ss
Maybe more scholarship schemes, or more information about the benefits of going to university, and if the government is serious about the matter, spend more on secondary education in poorer areas.

That’s it really, I am sure you have your own views on this or you may have recently started university yourself and completely disagree with me, but those are in my opinion the economic arguments and I think the Labour government was very brave and correct in accepting the advice given to the suggesting that they take the reforms they did.

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