by Kristina Murkett
Tuesday, 9
November 2021
Explainer
07:00

Universities — not the Government — should cover tuition fee losses

A new report argues that they should bear the cost
by Kristina Murkett
Credit: Getty

A new report by the Centre for Policy Studies has condemned the university tuition fee system by claiming that students are being ‘ripped off’ with low-quality courses. The report,  ‘The Value of University’, states that huge amounts of taxpayer money are being spent on courses that do not improve the lifetime earnings of students. For example, Creative Arts — one of the fastest growing subjects in the UK — has zero impact on earnings for the average female graduate, and a negative impact for the average male graduate. Yet it has the largest subsidy of any subject: £1.2 billion, or £37,000 per student.

In some respects the report is nothing new. We already know from IFS research that around 20% of students are financially worse off for going to university. We know that the average graduate has around £45,000 of debt, and that 54% of the value of student loans is written off by the Treasury at around £8 billion a year. We also know that for a long time universities have been incentivised through various policies (such as the removal of limits on student numbers) to focus on the quantity of recruits rather than the quality of outcomes.

However, the report is noteworthy because it is a call for action. CPS proposes that universities, rather than the government, should be responsible for student loans; they would therefore bear the cost if too many students defaulted. In theory this would limit the courses that offer the worst outcomes and push the system towards becoming more self-financing.

There are, of course, limitations to this approach. As an English teacher I worry about a subject’s value being determined purely by earnings potential, and we have to be careful not to simply prioritise commercial rather than creative contributions to society. There is also a danger that universities may then favour students from wealthier backgrounds, either because they can pay their tuition fees upfront or because they are statistically more likely to earn a higher salary after they graduate.

However, there are policies and measures we can put in place to mitigate these risks, and it is worth it if it refocuses universities’ attention on the quality of teaching and learning. Let’s face it: even the best students at the best universities are not getting value for money at the moment. After almost two years of industrial action, Covid chaos and online learning, students now face more disruption as staff at 58 universities have voted once again in favour of strike action.

While I fully support the reasons for the strike, it’s hard not to sympathise with students. My brother is in his fourth year of university; by the time he graduates, he will have only had one year of continuous in-person teaching, and will still be saddled with the same amount of enormous debt.

Yet despite everything, the demand for university is still as high as ever and students seem undeterred by these warnings; for example, the number of students doing PhDs has grown significantly over the last ten years, despite evidence showing that doctorates do not increase earnings potential.

We therefore cannot simply rely on supply outstripping demand. Without a serious re-evaluation of our tuition fee system, universities are going to continue to gobble up as many students as possible until this bloated system of borrowing is fit to burst.

Join the discussion


  • The fee system works – up to a point – and has helped many people. Beyond the cut-off point of reasonable fees and who should cover likely defaults lies the problem of lecturers now refraining from teaching face-to-face due to Covid and now strikes. Students at UK Russell Group unis this year started courses with student numbers so inflated that ‘live’ lecture halls would be too small – a fee generation exercise in itself underlining actual intent for the future. The student experience risks becoming one of permanent online learning – ‘Open Universtity plus hall fees’. If that is so, deans should be open about it with prospective applicants – and cut the fees (as well as the corporate PR BS).

  • Points to consider:

    1. what happens to all those kids who don’t have what it takes for science and engineering courses?
    2. do we have the thriving industry needed to provide the careers high-tech graduates yearn for – or has the best already been outsourced to China?
    3. New Labour seemed more concerned with the issue of equal opportunity – as though lack of a university education were a form of deprivation. They don’t seem to have pondered the long-term effect of a job-market flooded with the needlessly over-qualified.
  • I like the proposal because it means that the universities will feel the pain of loan defaults rather than the taxpayer. It should incentivise them to offer courses that make their graduates more employable – more electrical engineers and fewer sociologists.
    The anti-woke benefit is marginal if it is there at all. On that score, I share your pessimism.

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