Who should pay for university education?

http://www.theguardian.com/education/2015/apr/15/who-should-pay-for-university-education

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Higher education is often an election hot potato, and this year is no exception. Ed Milliband’s pledge to reduce the tuition fee cap to £6,000 has rattled cages, with some arguing that it is a step in the wrong direction, and others that it doesn’t go far enough.

There may never be consensus, but does anyone have a workable solution to higher education’s ongoing funding headache?

Tuition fees – a very brief history

“Our universities are strained to breaking point,” reads the Labour manifesto of 1966 – a year in which just 12% of people went to university.

Expansion was inevitable. It was hoped more universities and more students would stretch participation outside of the elite classes and answer a demand for more highly skilled workers. But it brought with it a new problem – funding.

How could the government afford to grow the waistline of the sector dramatically and still retain the same standards of education?

By 1998, it was a question that needed an urgent answer. A booming student population had led to the money being spent on each undergraduate dropping to a historic low – almost half of what it had been 10 years previously.

Tony Blair was faced with a choice; to carry on being the gentleman and pick up the ever-growing bill, or to split it with students. His Labour government chose the latter option, and tuition fees were born. Students starting university in England were required to pay a means-tested, up-front fee, of £1,000 (in 1998 prices).

Student numbers were to rise further – as were fees. From 2006, following government concerns that universities were still struggling to attract people from poorer backgrounds, upfront fees were abolished and replaced with a deferred fee of up to £3,000.

From 2012, the fees cap was tripled to £9,000 for new entrants – a move that triggered huge student protests and caused Nick Clegg’s popularity to take a nosedive from which he has never really recovered.

It was feared that the move would reduce the number of poorer students applying to university, but after an initial dip, numbers have recovered and 2015 figures show that application numbers are at a record high – over 592,000 people applied through Ucas this year.

However, while school and college leaver applications have remained high, part-time student numbers – which hold a higher proportion of groups that are under-represented in higher education – have fallen dramatically since the higher fees cap was introuduced.

So is the policy a failure for widening access? In their defence, ministers might point to the portion of of the £9,000 fees that universities are required to spend on schemes to attract poorer students. But this money is mostly spent on bursaries – and there is so far little evidence that they have any influence on application or dropout rates.

The policy might have escaped disaster status had it not been for the revelation last year that it is likely to cost more than the system it replaced – due to the increasing number of graduates who are failing to pay back their student loans.

Related: Virgin voters: students react to Labour's £6,000 tuition fee pledge

If the Conservatives are re-elected, it is thought that they may seek to raise the tuition fees cap further – or remove it all together.

Is there another way to pay?

“The big (bad) idea that has arrived is that high student fees are inevitable,” argues professor of higher education studies at the Institute of Education, Peter Scott, in a recent Guardian article.

Ed Miliband is pledging that Labour would cut the maximum level of university tuition fees if elected. But that could just be a transitory policy. Milliband said during his leadership campaign that the long-term goal should be to move towards a graduate tax – a system that would replace tuition fees by imposing a permanently higher income tax rate on graduates.

A graduate tax would mean that those who benefited most from a university education would pay most, and that students wouldn’t graduate with the weight of huge debts on their shoulders – a handicap which may put poorer students off applying to university. But critics say this is unfair, as the best-paid graduates would be subsidising those who did less well from their degree.

And graduates would be free to work abroad and avoid the tax, which could lead to a “brain drain” if a lot of highly-skilled individuals chose to leave the country.

Could tuition fees be scrapped altogether?

“We believe education is a right that should be accessible to everyone and barriers such as fees are unjust,” says the National Campaign against Fees and Cuts.

The Green party agrees; their manifesto includes a pledge to abolish tuition fees (as well as writing off any outstanding loans).

The party have costed this at just over £12bn a year – roughly three times what the government spent on unemployment benefit last year, or more than the entire budget for transport.

There seems to be little appetite among the major parties to make free higher education a reality (except from Ukip, who would make Stem subjects free to study).

However Germany recently scrapped its tuition fees – leading some to question why Britain couldn’t do the same.

The wider costs of studying

The other side of the tuition-fee debate coin is how students will afford to do degrees in the short term. They grab fewer headlines than tuition fees, but maintenance loans – means-tested government loans designed to cover the cost of study and living – are crucial for many students.

And there is a strong argument that the current loans are not high enough. Milliband agrees – his tuition fee pledge includes an increase of £400 a year to the current maximum maintenance loan. This will not be nearly enough to satisfy most students, who say that rising rents alone are eating up almost all of their loans.

What about postgraduate courses?

Postgraduate study has long been difficult to access for students due to the lack of student loans available for master’s courses.

However from 2016, loans of up to £10,000 will be made available to students under-30 – for any master’s subject.

While the policy will go a long way to removing financial barriers to study, it has been criticised for not going far enough. With the average postgraduate fee this year costing £5,680, for many full-time students the £10,000 loan will not cover both tuition fees and living costs – and the age cap of 30 will frustrate many would-be mature students.