UK University Funding System ‘Worst of Both Worlds’

A rally organised to protest against tuition fees (Wikipedia)

by Tony Harbron, Schools Improvement Net: http://schoolsimprovement.net/university-funding-system-worst-of-both-worlds/

The BBC is reporting that an independent study has suggested the funding system for England’s universities of tuition fees and repayments is the “worst of both worlds” …

The Higher Education Commission has cast doubt on the long-term financial sustainability of the current system. It warns students are paying more but the government is still writing off high levels of student debt.

“We have created a system where everybody feels like they are getting a bad deal,” says the study. The Higher Education Commission was set up to create a better informed debate on the university sector, with representatives from education, business and political parties.

This study from the commission has examined the sustainability of the financial arrangements for England’s universities, taking evidence from 60 expert witnesses. It has produced a highly critical report on the current arrangements - but admits there is no “magic bullet” in trying to design a better alternative.

The report says that the funding arrangements are unsatisfactory for students, universities and the government. “The current funding system represents the worst of both worlds. The government is funding higher education by writing off student debt, as opposed to directly investing in teaching grants,” says the study.

“Students feel like they are paying substantially more for their higher education, but are set to have a large proportion of their debt written off by the government. Universities are perceived to be ‘rolling in money’ in the eyes of students, as their income from tuition fees has tripled, yet the cuts to the teaching grant are not well understood by students and a fixed fee cap means an annual erosion of real terms income.

“We have created a system where everybody feels like they are getting a bad deal. This is not sustainable.”… The study suggests a range of alternative measures - and highlights that they would each have negative as well as positive consequences.

• Lowering tuition fees to £6,000 would reduce student debt, but it would leave an estimated £1.72bn funding gap for universities
• A graduate tax would require government to borrow £4bn to fill the gap between ending fees and the arrival of tax revenues - and such a tax would mean there was no clear link with the value of a particular course
• Removing the £9,000 upper limit on fees would allow more money for universities and clearer competition, but higher fees would mean even higher levels of public subsidy for loans
• Different charges for different universities or courses could also reduce the number graduates from expensive courses with high fees even if they were essential for the economy …

You can download the report at: Too Good To Fail
It does seem an odd system at the moment where students face huge loans and fees yet the government is apparently no better off than before fees were increased because of the huge amount now being written off. Your suggestions for a model moving forwards? Please let us know in the comments or via Twitter …