Education is a vital institution for any nation and its citizenry. At the most basic level, an effective school systems provides students with the skills they need to live and work in society. Higher education goes far beyond training workers. Internationally, all developed nations and many developing nations are improving higher education for the educational, cultural and socioeconomic benefits. For example, the Bologna Accord in Europe is designed to improve access, student transitions and outcomes throughout European universities.
Research suggests that in modern society higher education is the most effective means of social mobility, moving out of poverty, increased social equity and developing a resilient and adaptable workforce. Increasing access to education provides social and economic wealth. New technology and wider access to the global community is transforming the education system. This provides challenges for higher education institutions in meeting demand, adapting to changing students values and attitudes, and providing education and training to meet the demands of a changing world.
The British Conservative-Liberal Democrat coalition has just passed a bill tripling the upper limit of tuition fees to £9,000 (about $14,400) per year. Tuition fees at most universities are predicted to rise close to that £9,000 upper limit, even though total costs of teaching are only about £7,000/student annually. Essentially, this means the government will no longer be paying for higher education for many of its citizens. However, current devolved politics in the UK mean Scottish universities are free for Scottish and EU students and £1,820 for other British students. Welsh students currently pay about £3,000 at any university in Britain. A complex situation, made more challenging because regional governments in Scotland, Wales, and Northern Ireland develop and implement their own educational policy.
Without the 200% increase in tuition fees, higher education in the UK was rated 14th most affordable of 16 developed countries. In 2005, tuition costs were 12% of average per capita GDP. Total cost, including living costs in the UK were 43% of per capita GDP. This means the increase in tuition costs would cost about two-thirds (66%) of per capita GDP. Most undergraduate degrees are three years in the UK.
The student loan structure is also interesting in the UK. This tuition increase means the government is changing from directly funding part of student’s education, to an institutions that provides loans. Even more bizarre is the way these student loans work. After entering the workforce, students earning more than £21,000 are charged 9% of their income until the loan is paid off.
But, students are not allowed to, or financially discouraged from, paying their loan off early. The mechanism for this is currently under debate. It is likely students will be charged more for paying off their loan early: the government is encouraging students to keep their debt for longer, even when they can afford to pay it off. Second, interest rates operate on a sliding scale. Those who make more money pay a higher interest rate on their loan. Thus, in a sense, those who work harder, or are more successful are charged more because of it. They are not allowed to pay off more of their debt, they are forced to pay a higher rate of compounding interest.
Not only does higher education become prohibitively expensive in the short term, the long-term costs for those who can’t pay for their education up-front are even higher.
This is why students protested, and some rioted in London. The government has cut higher education funding by 40%, placing the financial burden on students and their families. This is during an economic downturn when people are less able to afford education, and less able to find work.
Even Margaret Thatcher, who was infamous for her harsh public spending cuts, increased funding for education and training by 33.3% over her term as Prime Minister. Even Thatcher’s hardline policy of public spending cuts and controlling the money supply was accompanied by increased education funding. This is because, especially during difficult economic times, education is the most effective route to wealthier citizens and a wealthier country. Access to education makes people better able to find jobs, better and more productive at their jobs, and gives people the skills to contribute more to society. Even more importantly, better education is related to better health, lower crime and a wider range of life choices and opportunities.
The Bologna Process Independent Assessment: Volume 1 Detailed Assessment Report (2008) Center for Higher Education Policy Studies
European Universities in a Changing World (2009) Centre for Educational Research and Innovation: Organisation for Economic Cooperation and Development
Global Higher Education Rankings: Affordability and Accessibility in a Comparative Perspective (2005) Educational Policy Institute.
Q&A: University Funding (2010) BBC.
Re-imagining Community Colleges in the 21st Century: A Student-Centered Approach to Higher Education (2009) Center for American Progress
The View from No. 11 (1992) Nigel Lawson