Like the spiralling costs of healthcare, the upward trend in university tuition fees is a global one. In America the price of tuition has risen faster than other measures of inflation for the past three decades: as high fees threaten to outstrip the returns to graduates in their later careers, there is talk of an unsustainable bubble in higher education. In Britain, the price will have increased eightfold over the 13 years to 2012. Fees are rising across Asia and Europe, too.
One reason for the expense is perception: students view price as a proxy for quality; universities worry that low fees will signal second-rate education. Another is that, in many countries, the state lends students the funds to pay for their courses, with the effect of driving up demand even if prices become eye-watering.
One such place is England, where fee increases have stark consequences for the pinched Treasury. Under the system unveiled last year, the exchequer forks out for the fees; graduates begin to pay back these loans when they are earning £21,000 (Rs.15 lakh) per year. The sums owed by students and graduates are set to double to £70 billion (Rs.511,000 crore) in the next six years — and David Willetts, the UK’s higher education minister, reckons that 30 percent of all loans will end up being waived under rules that cancel the debts of low-earners after 30 years. Meanwhile demand for places continues to climb, driven, in the short-term, by a lack of jobs for school-leavers in the struggling economy and, in the long-term, by the growth of the aspirational middle class.
The solution unveiled in late June is fiddly. For the past 20 years, the state has set a cap on the number of students that each university can accept. Willetts intends to introduce a new contest, in which around 5 percent of the total places are available only to institutions that charge tuition fees of £7,500 (Rs.5.47 lakh) or less.
Meanwhile those universities which attract highly qualified students i.e. those who get two A grades and a B or better in their A-levels, can expand to take as many as they want. Some 20 percent of students attain these grades. The aim is to put pressure on mediocre universities to drop their prices, or risk losing their clever students to their superior rivals and parsimonious types to the cheap-and-cheerful.
Will it work? Since the cost of educating an undergraduate at some of the best universities is not wholly covered even by the higher fees, some have no intention to expand their student rolls, so some high achievers will be turned away. Declining student numbers at mediocre institutions that are unable to compete at either the top or bottom end of the market might in theory force them to close; but their importance to their local economies will make axing them difficult, and in practice they might be taken over by a neighbour.
There have been predictable objections to the plan, on these practical grounds and others. Although universities have, in theory, always been private institutions that compete to attract the best students, many lecturers resent the explicit involvement of market pressures. Others point out that the market will be rigged. Paul Greatrix of the University of Nottingham says: “There is a paradox in these proposals, which talk the language of markets and deregulation but actually increase regulation.”
The grumpiness is not confined to bolshy academics and rioting students. University funding has created tension in the coalition. Already embarrassed by their broken election pledge to oppose any increase in fees, the LibDems are irritated that these proposals only pay lip service to fair access for pupils from poor backgrounds. They want universities to admit more of them; policies intended to force them to will be unveiled later this month — to the chagrin of many Tories.
This is a volatile issue: Tony Blair’s efforts to increase tuition fees were more contentious in Parliament than his decision to wage war on Iraq. There is good news, then, for those who enjoy parliamentary pyrotechnics: Willetts’s plan seems destined to protract the debate over university funding rather than resolve it.
(Excerpted and adapted from Times Higher Education)