Thoughts on Higher Education Financing (Part I)

I’ve been meaning to write about my experiences here in the UK as the coalition government that came to power in May has worked toward shifting the cost of higher education from the taxpayers to those who attend university in England. I’ve been busy with other things and haven’t had time to sit down and get my thoughts into organized form. Today, however, is the second day my office has been without heat, so I’m sitting in my flat and having a hard time focusing on research. Seems like the perfect opportunity to share some thoughts on the changes from an American perspective. Let’s begin with why on earth you might want to read the thoughts of a postdoc who’s been in the UK for less than three months. Admittedly I haven’t done a great job on keeping up on the media in the US, but I have tried to stay on top of my usual higher education news sources. Seems like they’ve given the matter only cursory coverage or the coverage was syndicated from Times Higher Education. (Or the coverage was sensationalized and centered around the student protests once a car carrying Prince Charles and the Duchess of Cornwall was attacked.) I will say, THE is great! I added them to my HE news feeds. However, they write for a UK audience from the UK perspective. It’s taken me as an American over here actively working with people at universities a while to get a grip on what’s going on, so I don’t have any idea what reading such articles is like for Americans in HE who are not familiar with the English system. This is my attempt to bring my experiences in American higher education to explaining the changes in England as well as some of my opinions on the matter.

If you’re on top of things, you’ll notice that I’ve used both “the UK” and “England” or “English” in the previous paragraph. You might have been thinking “Wait a minute, if he lives there, shouldn’t he know that UK \neq England?” Well, if you review the usage, you’ll see that the occurrences of England/English were very carefully placed for a reason. The United Kingdom of Great Britain and Northern Ireland is composed of four countries: England, Scotland, Wales, and Northern Ireland. Over time, the UK Parliament in London (Westminster, if you want to get technical) has devolved a number of powers to governments in Edinburgh, Cardiff, and Belfast. Education is one of those devolved powers. There is no separate devolved government for England; instead, the UK government has responsibility. In light of devolution, the funding changes proposed by the government only apply to universities in England. Scotland has a markedly different funding model for higher education and appears intent on keeping it. The system in Wales currently resembles that in England, but the Welsh Assembly Government appears to not be following the lead from London. This post will be about the changes in England, but I’ll draw contrasts to the Scottish system as appropriate in the discussion.

For generations, a university education in England was provided to students free at the point of delivery. In other words, the British citizens paid taxes to the government, and the government provided funding to the universities to teach students. Students did not pay the universities for the cost of their education, although there were generally some costs of room and board, from what I understand. In the mid-1990′s, a review of HE financing took place near the end of the Conservatives’ last time in government. When New Labour arrived, they were faced with implementing that report’s recommendations and established tuition fees in the amount of £1,000/year. (An English university degree is earned after three years of full-time study, unlike the four+ in the US.) Over time, the level of that tuition fee has increased, eventually being indexed to inflation. It is currently capped at £3,290/year. Very soon after the Scottish Parliament was established, it abolished tuition fees for Scottish students attending Scottish universities. (Graduates were required to make a small extra tax contribution, but that was later abolished.) This has created an interesting situation in which English students attending Scottish universities must pay tuition fees, but students from inside the EU but outside the UK pay no tuition fees!

Across the board, the government has continued to provide significant funding for teaching at UK universities as tuition fees have been implemented. They also provide research funding through the UK’s equivalents of the NSF, NIH, NEH, etc. It should be noted that except the University of Buckingham, all universities in the UK are public. They also all charge the same tuition fees. They are not required to do so by the government. If a university felt that its teaching grant from the government was sufficient to offer education with a tuition fee of £1,000/year, they would legally be allowed to do so. However, the cap has had a peculiar effect. With the exception of one year, since universities have been allowed to fix their own tuition fees subject to a cap, every university in England has charged the maximum tuition fee. The fear, widely acknowledged, is that the less prestigious universities admit to being inferior if they charge less than Cambridge and Oxford and the other members of the Russell Group. Although UK universities do have varied missions, as in the US, but the diversity does not seem as strong. There are clear research universities and then there are what would be more comparable to smaller public universities focused on teaching, usually in particular areas, in the United States. There are not, however, private universities small and large, focused on science and engineering or broadly-based, or institutions comparable to small, private liberal arts colleges in the US. The quality of a university degree in mathematics is supposedly the same, regardless of whether one studied at Cambridge or the University of South Southwest England. (To avoid insulting institutions that I don’t know anything about, I’ve made up USSWE as the name for a younger, upstart public university where faculty focus almost exclusively on research.) In the US, an accredited degree is nominally the same, but no one will argue that an ABET-accredited degree from Southern Polytechnic State University is equivalent to an ABET-accredited degree from Georgia Tech or MIT. The caliber of the faculty is different, the caliber of the students admitted is different, and the expectations of the coursework are different. It’s little different here in the UK, but for some reason there’s a feeling that charging the same tuition helps convince students that the education they will receive at USSWE is comparable to that of the Russell Group members. Why the vice-chancellors (another oddity here: the chief executive of UK universities are titled Vice-chancellor, as the position of Chancellor is largely honorary) don’t decide to focus on why a university might be a better fit for certain types of students (smaller classes, faculty dedicated to teaching, faculty actively engaged in cutting edge research, the overall university experience, etc.) as in the US, I don’t know. A student entering university should be able to realize that just because a university’s tuition fees are lower doesn’t mean that the education there is inferior. It’s just different.

Now that the stage has been set, we’re about at the point where we can discuss the proposed changes. The recently-completed review of higher education financing actually began under the previous Labour government. They established a commission, headed by Lord Browne of Madingley, to review the financing of HE in England. (John Browne is former chief executive of BP, having stepped down in 2007. He’s a fellow and president of the Royal Academy of Engineering and a fellow of the Royal Society.) In October 2010, the Browne report was published. It contains several recommendations for how to ensure that students could afford to attend university while the government reduced direct funding to the institutions in light of a large budget deficit and mounting government debt. The most controversial recommendation was to completely eliminate the cap on tuition fees to create more of a market environment. Without a cap, the suggestion was, universities would set a tuition fee that was appropriate for the market. Cambridge could charge very high tuition fees, while USSWE would charge lower tuition fees and focus on attracting students through their focus on personal attention for students who don’t want to get lost in the crowd. He also proposed that students not pay their tuition fees to the universities up front. Instead, the government would effectively provide loans that students would start paying back through payroll withholding once they graduated and were earning £21,000/year.

I’ve run out of steam for today, but hopefully before long I’ll be back to explain what the coalition government has proposed (they did not just say “Let’s adopt the Browne report!”) and why it’s been so controversial. I’d love to get some questions from US readers in the comments so that I have an idea of how to focus.

Posted on December 14th, 2010
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6 Comments on “Thoughts on Higher Education Financing (Part I)”

  1. Kate says:

    Very helpful. I find it interesting that the cap in England is slightly less than what ND residents pay at NDSU and much, much less than what non-residents pay. I’ll reserve judgement until you finish the explanation, however. -K

  2. Partially Ordered Thoughts » Blog Archive » Thoughts on Higher Education Financing (Part II) says:

    [...] Be sure to start with Part I. [...]

  3. Jennifer Stakes says:

    What a comprehensive and excellent round-up.

    I’d just like to add that I don’t agree that in the UK students feel that a Maths degree from Oxford is the same as a Maths degree from Bath University.
    Back before fees were introduced you would pick the best university *for you*, in that price was no barrier to going to the best university for your abilities.
    There is a star rating system for all courses, so Maths at Oxford gets 5* for both teaching and research, whereas Bath would, I expect, be lower.
    But Bath may be the best choice for someone who plays Rugby, as it has an excellent reputation for the sport. I don’t know, but they may teach by a modular method, so it would be better for someone who didn’t get on with end-of-year exams. It may also have excellent links with some local industries the student wanted to work for.

    Charging the same flat fee is a hangover from the ideals of meritocracy, that no student should be priced out of a course that allowed them to fulfil their potential to the best of their ability.

    I fear, and so do many others who approved of the ideal, that going to more of a market-based system would price many students out of the best course for them.

    As an ideal, a country as a whole thrives when each individual is encouraged to fulfil their potential. Having a more socialist mindset, many people are happy to support students with their tax money, as income and skills will be ploughed back into the country in the long-term. There is a very different philosophy at work than in the US, where I currently live. It is this philosophy, as well as student debt, which is now at stake.

    I would also like to add, before US readers jump in, that wages in the UK are typically less than half that of comparable wages in the US, whereas house prices are generally higher, certainly more than in MD, USA, where I live now. (Although they don’t pay healthcare and far lower monthly repayments on their student loans, so maybe their actual take-home pay is comparable – I would be seriously interested in looking into this).
    Students already find the cost of living post-university unbearably high, and the chance of ever owning a house becoming smaller and smaller.

  4. Mitch says:

    Thanks for sharing your thoughts, Jen. The issues of higher taxation for items of public good as well as wage differences are definitely things I want to bring up in later posts. For reference, the median household income in the US is nearly $50,000, while the median household income in the UK is less than $39,000 at present exchange rates (£24,700). Factor in higher taxation rates in the UK, and it’s a big difference. Of course, you’ve got health care costs to bring in, which change things a bit in the other direction.

    As far as quality goes, I’m having a hard time expressing precisely the things that I’ve heard from LSE maths faculty, but they’re along the lines of what I wrote above. It’s presently not supposed to matter which university you attend, if you read maths, you’re supposed to come out with the same set of knowledge and skills. Obviously the experience at the uni will be different (if you want to row or play rugby or perform music outside of your studies), but the education is supposedly “the same”. It just makes no sense to my American mind (and doesn’t seem to them either, and these are not Americans working as lecturers in the UK) that a degree from a Russell Group university should cost the same amount as one from Bath or wherever. I’ll get into access for all more in a later post. It’s not something we Americans necessarily do all that well, but it sure appears that the UK is only on a path toward making it worse. As one of the Lords said last night, the government’s plan appears to take all the worst parts of the American system without adding any of the things that mitigate those deficiencies.

  5. Jennifer Stakes says:

    “As one of the Lords said last night, the government’s plan appears to take all the worst parts of the American system without adding any of the things that mitigate those deficiencies.”
    Couldn’t agree more.

    Looking forward to reading your future posts!

  6. Partially Ordered Thoughts » Blog Archive » Thoughts on Higher Education Financing (Part III) says:

    [...] also Part I and Part [...]

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