Tuition fees are a consumerist fallacy. Our students deserve better

http://www.theguardian.com/commentisfree/2015/aug/05/tuition-fees-students

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For the last three years, it has looked as though higher-education funding has fallen off the mainstream political agenda. The coalition had every reason to keep it out of the news, while Labour kept quiet about the issue – Ed Miliband’s suggestion that he would reduce fees from £9,000 to £6,000 smacked of desperate electoral manoeuvring. At least the Labour leadership candidates are now having to declare their hands, prompted perhaps by Jeremy Corbyn’s announcement that he would abolish the current fees.

Meanwhile, reports that student fee levels are set to rise to £10,000 within a few years, thanks to George Osborne allowing them to rise in line with inflation, have triggered the usual Pavlovian responses. The government says its scheme drives up quality. Vice-chancellors say they must increase fees to stay competitive in the global market. Charities say the changes discourage those from disadvantaged backgrounds from applying to university.

All these responses miss the larger point. Once the current system was introduced in 2012, it ought to have been obvious, first, that fees would rise, and, second, that the terms of the loans would be changed. If you begin with the premise that you are dealing with a market, then prices will vary to reflect what, as economists say, the market will bear.

At the same time, the government gave itself the power to vary the terms of the loans retrospectively, not just for future borrowers; the proposal not to uprate the earnings threshold at which repayments start to kick in is just one small step in this direction, with even more punitive changes likely to follow.

Relatively small fluctuations in the figures are not the story: it is the market dogma driving the fees system as a whole that is at fault.

When the last government largely removed public funding for undergraduate education and replaced it with a system of fees supported by income-contingent loans, ministers were driven by two main aims. The first was that this move looked as though it could help to reduce public expenditure in the short term. Public support by way of direct grants to universities shows up in the accounts as an item of government expenditure. Loans to students, by contrast, figure as an asset. Even though future governments may in practice end up paying out as much to provide the loans as they previously had for direct funding, the change registers, purely in accounting terms, as a reduction in public expenditure.

The other main aim was ideological. The Tories were determined to find a way to apply “market discipline” to universities. They have tended to regard universities as a kind of inefficient nationalised industry. Free-market dogma says that if you make such institutions “compete on price”, this will lead to raised standards and lowered costs (that’s what market competition does – as in the case of, erm, the railways or energy suppliers). The policy explicitly encourages students to act as the shock troops of this new market discipline, demanding value for money and thus forcing sluggish or self-interested academics to raise their game.

Higher fees alone won’t significantly diminish the number of applications: there are deep societal pressures driving ever-increasing numbers of school leavers towards higher education, and the pattern of growth in participation across the developed world seems too strong to be permanently derailed. The prospect of large debts may have some deterrent effect on students from poorer backgrounds, just as the current system seems already to have deterred many mature-age applicants. The issue here is not really about overall numbers, but about the further entrenching of class privilege in education by driving the children of the less well-off into institutions that charge less, while increasing the concentration of children from already advantaged backgrounds in those universities that then most augment their advantages in later life.

But even that, bad as it is, does not constitute the main defect of the current system. The fundamental conceptual mistake of this system is to treat education as a “product” that an individual “consumer” purchases from an individual “provider”. It is not hard to see how these assumptions can lead to lines of students standing at the tills arguing for their consumer rights to a higher grade of degree (“I’ve paid good money, I’m entitled to a good degree”). And it is not hard to see how universities are thereby encouraged to market themselves and to prioritise getting good scores for student “satisfaction” rather than providing a rigorous but exacting education.

It does not have to be like this. Ours is an enormously wealthy country that can easily afford to support a high-quality system of public higher education – even if it is felt that there is not sufficient political will to return to a proper system of public funding.

There are two essential truths to hold on to in thinking about an alternative. First, the provision of education is part of an inter-generational contract. Society as a whole benefits from the investment by previous generations, and society as a whole, represented by those who have the means, should contribute to maintaining such benefits for future generations. We need to recognise that it is a fiction to treat a tuition fee as though it paid the actual costs of that student’s education; those have been incurred by the institution, indeed by the world of learning as a whole, long in the past.

Ours is an enormously wealthy country that can easily afford to support a high-quality system of public higher education

Second, we have a national system of higher education. The aim must be to finance the system, not to pretend that universities are rival companies where one obtains a market advantage at the expense of its competitors. Vice-chancellors at the more prestigious universities may try to deny this truth, since they believe their institution will benefit from a free-for-all, just as they tend to be in favour of differential fees that the student pays directly to the university. But whether we are thinking of support for small subjects or of rewarding those institutions that provide more opportunities for students from the least-advantaged backgrounds, it is obvious that there needs to be some central oversight of the system as a whole. The funding arrangements should be designed to support such a cooperative endeavour, not to undermine it as the present system does.

Expecting graduates to make an enhanced contribution to the costs of educating their successors has an intuitive appeal, and there is every reason to make these contributions income-contingent. But because the present system treats the fee as the price an individual provider charges to an individual customer, the current loans compound the consumerist fallacy. If we have to fund higher education by some means other than a properly progressive form of general taxation, then some version of a graduate endowment or equivalent of national insurance contributions would be less damaging.

Of course, we shall be told that there are all sorts of practical drawbacks to any such proposals. Yes, there are, and the details would need to be worked out. But these can only be made to seem like devastating objections if we assume that the present system is working well and is itself proof against even more fundamental objections. But it’s not. We now have a bad system that is unfair, distorting of educational priorities, and potentially very expensive. Above all, it is a system that threatens to replace the best features of long-term scholarship and willingness to learn with the worst features of profit-hungry companies pandering to the desires of value-for-money-seeking consumers. Our society benefited from having a better system in the past; we owe it to future generations not to saddle them with a worse system for the future.