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Higher education: the lie-busting low-down

Cristina Delgado Garcia and Luke Yates explain why university cuts aren’t fair or needed

February 4, 2011
7 min read

In the biggest shake-up to the university sector since grants were introduced in 1962, the government is tripling fees and cutting funding to teaching budgets by £3.2 billion. This includes a 100 per cent reduction for the arts, humanities and social sciences, in effect privatising their teaching. Universities that cannot ‘compete’ for high enough student numbers will have to close. The changes mark a significant step in the transformation of higher education into a commodity subject to the whims of the market.

The government claims these plans won’t affect participation, that the cuts are ‘fair and progressive’, and that they make social and economic sense. Should we believe them? Of course not. And our lie-busting low-down reveals why:

MYTH: The fee rises and public funding cuts to universities are fair – graduates should pay for their university education, not everybody else

The coalition argues that since graduates are the main beneficiaries of a degree, it is fair that they should pay for that degree. The structured repayment scheme for students has even led to claims that these plans are ‘progressive’.

However, the idea of the public ‘funding’ higher education through taxes is something of a myth. In reality, university graduates actually provide a profit for businesses and taxpayers through higher income tax contributions. Statistics from the OECD show the net profit from funding a graduate, recouped through social contributions and tax, averages £56,000 over a lifetime. It is true that under the tiered debt repayment plans people on higher incomes would pay a greater proportion of their fees than those who are poorer. But the focus on repayment plans deliberately dodges the issue that taking on up to £50,000 in debt is a massive psychological disincentive that will be felt most keenly by poor‑to-middle-income families.

MYTH: University reform will save money and balance the deficit

Many of the cuts proposed by the government are unlikely to actually save any money, and higher education is a case in point. Despite currently being funded with a comparatively very low 1.3 per cent of the governmental budget, universities employ 2.6 per cent of the country’s workforce and generate 2.3 per cent of GDP (figures from Universities UK). The cuts to universities will cause significant job losses and some institutions will go bust. These redundancies cost money in the short-term, and welfare costs will also rise.

Meanwhile, money saved in subsidising courses and research will be required to fund the massive expansion in lending. The Higher Education Policy Institute recently concluded that the government will be spending so much on increased student loans that increased fees will not save any public money.

MYTH: Student numbers are unsustainably high now, and so cannot be funded by the public any longer

Universities in the UK receive far less funding than in most OECD countries, which have higher levels of student numbers. Student numbers (currently around 36 per cent of young people) are higher than previously but similar increases have taken place across all OECD countries in recent decades. Britain has below‑average participation levels overall, ranking below Poland, Slovakia and the Czech Republic (Education at a Glance 2010, OECD).

Vice-chancellors have been complaining for many years about underfunding, and until recently their target was the government. This is because the government has been spending a modest 1.3 per cent of GDP on higher education. This compares with an OECD average of 1.5 per cent. The United States, despite huge contributions by individuals, spends 3.1 per cent; Canada, South Korea, France and Scandinavian countries also spend substantially larger proportions of public money on universities.

Neither student numbers nor public spending on higher education in the UK are at unsustainable levels. If anything, targets for public spending on higher education and levels of university participation should be increased.

MYTH: British universities won’t be able to compete internationally without ‘reform’

Fee rises have been introduced to substitute for massive cuts in public funding, not to improve university performance. The proposed enormous higher education budget cuts will clearly damage UK universities, not help them.

The coalition’s disregard for the well-being of educational institutions is most apparent in arts, humanities and social sciences, for which it has decided to virtually discontinue its financial support. The government’s reforms entail a shift of the burden for university funding from the public budget onto students. But British universities will continue to require financial support to maintain and increase the impact of their research, and their appeal when it comes to research contracts and international students. Students’ university fees will simply not cover the costs in some departments, irrespective of their research standing. The tripling of university fees is ‘necessary’ to safeguard standards only because of this government’s refusal to subsidise higher education as a public good.

MYTH: The proposed changes won’t affect student numbers and won’t prevent access for poorer students

The government, backed up by vice-chancellors from the 20 Russell Group universities, denies that the huge increase in fees will deter potential students from university. They claim that increases in student numbers since the 2006/7 introduction of top-up fees is evidence to the contrary.

Closer analysis of the impact of top-up fees, however, reveals a decline in participation precisely from those eligible to pay them. Poorer students (those below the median household income) paid no increase in cost or in debt levels due to the introduction of grants up to nearly £3,000 alongside more bursaries.

The numbers of students who did experience these rises in fees, those from the four higher social classes, declined from 43.8 per cent to 40.6 per cent (BIS, The Impact of Higher Education Finance on University Participation in the UK, September 2010) in the year of the increase. Even looking at families most able to pay the £1,800 increases in fees there was still a significant reduction in access, despite the doubling of available loans. Students could borrow to pay these fees, yet they were still deterred from entering higher education – this shows that fees, even in the form of debt, negatively affect access. Increases of up to £6,000 on top of these levels are therefore certain to hit participation levels very significantly.

There is no equivalent package to that introduced in 2006/7 to lessen the impact of these new changes or protect prospective students from the huge increase in debt. A tiny £150 million (coming from scrapping free school meals) will be spent on new scholarships for the very poorest.

MYTH: Top universities have been taking in more poor students, promoting social mobility

While 36 per cent of students go to university, there is vast inequality in the student population. 19 per cent of young people from the least advantaged fifth of the population go to university compared to 57 per cent from the most advantaged (Office for Fair Access, Fair Access Report, 2010).

Although this is actually a marked improvement since the 1990s, the 20 most selective institutions have not increased their percentage intake from the least advantaged areas at all over the same time period. The increases that have taken place are almost entirely in former polytechnics and others outside of the Russell Group universities.

The government’s near-privatisation of university education, and the ensuing ‘competition’ envisioned by Lord Browne, is expected to promote the expansion of some universities while allowing others to close. The institutions that will suffer the most will be those outside the core of the existing big, well-funded institutions – precisely those that young people from poorer backgrounds would attend. Moreover, the evidence shows that any system of bursaries and loans has little positive impact on the likelihood of poorer students applying to and attending more selective universities, so the new scholarships are unlikely to address any of these inequalities.

The government’s statements on higher education cuts are designed to provide bland reassurance. They mask a brutal attack on university education as a public good. We cannot allow them to be its epitaph.

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