Universities — not the Government — should cover tuition fee losses
A new report argues that they should bear the cost
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.
Like what you’re reading? Get the free UnHerd daily email
Already registered? Sign in
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.
Interesting article; however, if you are leaving a reference to corroborate your point, please (as you are a graduate yourself, and a teacher to boot), do NOT link to Twitter posts, or at least tell me what I am about to read. Using Twitter to prove a point immediately devalues your work.
Student loans are the most pernicious device ever done by the PostModernsit Liberals to advance their destruction of the West. The main effect is to stop middle class youth from marrying, buying a house, and having a family because of the debt needing servicing.
The gov guaranteed debt did one thing right off the bat – prompted the universities to raise costs to meet this glut of money. And they did it by vastly increasing administration and teachers of the very worst kinds for numerous reasons. In USA this tuition increase is 10X, adjusted for inflation, to what it was 80 years ago. Increased costs, so burdens on students, and a tremendous lowering of the quality of education.
Pure Neo-Marxist eugenics, stop the bright youth from breeding so unskilled foreigners could be brought in to replace the declining population. At least that is the obvious answer to why Universities are what they are now days – as I am a conspiracy loon – and the outcome is exactly what I said.
Everything is a conspiracy isn’t it? Being you must be incredibly tiring, looking at every example of government incompetence and trying to find a shadowy deep state meaning for it.
My take is that seeing as the bulk of our politicians go to uni, they believed that sending more there would increase social mobility. However doing so meant that many courses became devalued as they were taken by lesser abled students, and as such the graduate premium on wages no longer really applies.
This policy also greatly increased student numbers, so the government introduced fees to try and recoup some of the costs, however this simply meant the universities with pound signs in their eyes started offering even more courses in a blatant cash grab knowing the government would underwrite it via the student loan scheme.
It was a simple lack of foresight
Your view of reality reflects your way – and ability one supposes, and life experience – of thinking. Mine are not the same.
The leaders in the world have experts of the very highest IQ, very highest educated and experienced, to advise them – as well as the leaders being in the top intelligence themselves. I do not believe that the leadership can mean well, and just stumble from one disastrous bit of collateral damage and unintended consequence after another, and never bother to fix the wreckage left behind.
Do you believe the Lockdown resulting in the top 1% of wealthy DOUBLING their wealth in 18 months was just something which happened? And that this will be paid back by the Tax called inflation, paid for by the middle class and working? Do you believe the 20 years of stalemate war and Trillions of $ spent in Iraq and Afghanistan were just because of 20 years of bad judgement?
If you think all is for the best in this best of all possible worlds, and that no conspiracy works behind the locked doors of government and industry and finance, well, then you are intentionally naive as every evidence points the opposite.
And, Billy Bob – I know you are a tradesman like me, I am out to get my Contractor’s Builders License for some silly reason as I am being forced to because the new head of the zoning/planning dept told me I must to keep pulling permits – they always used to let me just pull them…I now have to get the full license or work under some other persons license.
Man, that is a huge ordeal – $900 just for the code Books! I go study a bit – and come back here or go fishing – it Suc*s! The online class is about $400, and $450 for the test and license and $2300 for the general liability insurance required.
Still, $4050 – and I get a license which allows one to make a lot of money if you wish, and work really hard at it. That is good education value for $ (naturally you have to prove your trade skills to qualify, but I have those) I am in my mid 60s and no longer need to work but I have some amazing bits of land I bought over the years locally – so want to build 3 more houses (I hand build them with my employee who is a 60 year old carpenter, wire, plumb, roof… all of it).
I hate doing the trades – mostly I am a carpenter, but also electrician, and do plumbing and the rest, and there is money in the trades – many of these youth getting these silly degrees could do well out of trades – but I wish I had done university to a good degree and did more intellectual work. I also should have bothered to get the Contractors license decades ago – but just did my self employed thing instead.
Marrying, buying a house, having a family ?
Quite impossible, given UK housing costs.
But that’s Capitalism for you !
The headline is interesting and correct; the article mostly tosh. Phds do not make more money? Really? Perhaps a Phd in Gender studies or Racial Grievance, but a Phd in Maths? Computer Science? Engineering? Intellectually lazy to cite as fact, a single twitter study (as called out by another commentator). The other “study” cited also rubbish. Entire article intellectually lazy–and this woman is a teacher! Wow! This merits a failing grade! Of course I apologise without reservation for introducing the concept of merit–that has no place here or in schools!
Same applies to the US, but on steroids. Posh unis with billions in endowments churn out graduates with massive debt, limited to no education and thinking ability (Gender Studies, Racial Grievance majors), and then expect the US government to bail these idiots out. Under Biden, they likely will.
Can we stop the insanity?
Because the title isn’t written by the author, and often gets changed as the day goes around, if you want to make a point about the title, you will have to repeat it in your note. By the time others get to read your comment, the title may have changed, leaving us scratching our heads and wondering what it was that you thought was ‘interesting and correct’.
Cheers, Laura and thanks. I had seen this point raised but forgot to mention it. As you correctly note, it’s a bit hard to hit a moving target.
I think this will, if not stop, then slow the insanity.
Currently there is no penalty for universities who offer crappy humanities degrees which do not improve graduates ability to earn. This change should reduce the number of Gender Studies courses in the market.
It won’t stop elite institutions offering Gender Studies, as the brightest graduates will always earn well regardless of what they studied, so there is no risk to the university. In fact, the scarcity of these courses may add to their allure.
This change won’t destroy the army of Woke students we are currently producing but it should deplete their ranks.
I appreciate your thoughts but share none of your optimism, if it is that. The unis have failed, they are now a tool of the woke–even the sciences. Depleting the ranks will not yield victory, they must be eliminated.
A real revolution is needed, not tinkering at the edges.
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.
Surely giving institutions feedback that their graduates are not getting graduate-level jobs in the form of reduced funding is healthy.
The New Labour problem is uni-for-all without any regard to the cost to the taxpayer. It was intended that it would be self funding – graduates earn a premium, use some of it to pay off their loan and the taxpayer covers the rare defaulters. But defaults are now above 50% because there is no premium for being one of ten thousand psychology grads each year.
Almost anyone can get onto a psychology course at some institution but only a limited number can get onto electrical engineering. The psychology courses will be the ones cut because they don’t create loan repayers. This in turn should reduce the number of grads whose status and pay expectations are out of kilter with reality.
My answers to your good questions:
1. I don’t think people without 3 As at A Level should be invited to study humanities, social sciences or arts. The student of average intellect will not benefit from three years of sociology. The very brightest might.
If you haven’t developed the base knowledge and skills by 18 to do a STEM subject or say, a language, then you should either look to re-sit your A-levels, do a vocational course, an apprenticeship or just go straight to work.
I have often wondered whether it might make sense to give all 18 year olds a three month, tax-payer funded, residential experience- possibly like a Duke of Edinburgh thing that they could do on university campuses the summer after they finish sixth form. It would give them a chance to get the leaving home bug out of their system – meet new people of opposite sex, binge drink etc.
2. This is a great myth. We have loads of high skilled design, engineering, manufacturing and construction jobs in the UK. Yesterday alone I saw JCB and Rolls-Royce talking about their need for engineering graduates.
On top of that we have world class finance, legal, accounting, media and advertising sectors.
In short, there is no shortage of jobs. If anything I think some will return from China rather than the other way.
3. Agreed. Nor was there enough thought given to the effect on the 50% who don’t go to uni but are now unqualified for jobs they would have done 20 years ago. Or for that matter the effect of importing millions of skilled foreign workers.
Newly announced UNIVERSITY OF AUSTIN is an example of what I am talking about. Maybe this is hopeful, as existing unis must be completely destroyed. It’s not good value for money to be indoctrinated in hatred of Western Civilization, racial grievance, and destroying the patriarchy, which is the current mission of the unis. This is not education.
Apologies for omitting above that it is also important–and you can get kicked out of school for violations (a new 1984 thing, but more coming) for using the wrong pronoun, even unintentionally.
Columbia, a once great uni, and surely others. Sadly, I’m not kidding.
Couldn’t agree more
Woke students have in many cases been produced by family breakdown.
They are lonely, unhappy kids looking for a family-substitute in activism with others.
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).
The university and schools were foundations of charitable lands, and there tithes, those of great standing, now private institutions charging huge fees, for corrupt profit, sorry should read corporate profits, silly me.
Hallelujah! Not wanting to blow my own trumpet 🙂 but I have been suggesting this (here and elsewhere) for years. Good luck with campaign CPS – hope it gets the attention it deserves.
I went to my son’s graduation at Leicester some years ago where in his speech to the graduates the Vice Chancellor was at great pains to point out that the University was in his words a ‘Big Business’ with its hundreds of millions of pounds annual turnover. Clearly such big and profitable organisations do not need taxpayer support and of course they should bear the cost of their ‘failures’. Who would ever have thought otherwise?
This area is hugely complicated and dynamic. The article oversimplifies the issues and fails to identify risks. For example, if a Uni takes over loans and mismanages them – then what happens? The benefits of a Ph.D. are not uniform across institutions or subjects. The really big mistake in my view was to do away with the distinction between Universities and polytechnics years ago. We now have a shortage of the polytechnic ‘type skills’ and these newer Unis have been allowed to spread their reach into non-value-adding subjects. There is a case for central planning of tertiary course student numbers and restrictions on subjects taught by particular categories of institutions.
What annoys me is the way the student loans are marketed.
“Don’t worry about paying them back, because if you don’t earn more than 26 grand a year, you won’t have to.”
How? It already costs more than £9250 a year per head to run most courses. Where is this money supposed to come from? And can we please define “low quality courses”? Maybe, it’s actually the labour market, stacked as it is in favour of white, middle class, men no matter their education not the universities that is preventing graduates (now we have 50% participation and have widened access) from reaching their potential. That’s the government’s problem..
I wouldn’t be inclined to use the word “low quality courses” per se, unless they were badly taught and lacked intellectual rigour, of course, but I would probably use the term “leisure courses”. These courses are the type that used to be run by organisations like the WEA or local education authorities and sometimes university night-schools; often they were subsidised, but were never meant to lead to degrees, they were to feed the inyellectual curiosity of adults and keep the little grey cells active.
Even if, as you say, the labour market is stacked in favour of white, middle-class men how does achieving a degree in Creative Arts at great cost rectify the situation?
You are correct in that many courses are expensive, some costing more than £9250 a year per head; these, usually science courses, are often subsidised by the cheaper arts courses. However, as these courses start to elbow out the more expensive courses the universities will start making large amounts of profits from their fees.
Just an aside from a newbie here, I note that some comments have a lot of thumbs-down without any explanations as to what is being objected to, this means that the original poster cannot explain or argue. This seems a little unfair to me.
It’s equivalent to four students hiring a recent PhD as tutor for £37,000 a year. Make it five students, and you can afford to hire a lab. Make it ten students and they can afford a top professor or industry leading consultant as the tutor.
A class of thirty brings in generates £277,500. Five full time lecturers at £50k a pop – and they can’t all be teaching at the same time, so you even get research out of it. Of course this assumes full 40 hour contact time. But if you limit your lectures/tuition to 3-4 hours a day and just have the students working on their own, then you’re quids in.
The fact that this simplistic sketch doesn’t match reality, leaves the obvious question of where actually does the money go…?
Admin, unis’ vanity projects…
Join the discussion
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.Subscribe