What Did Increasing Tuition Fees Achieve?

May 27, 2015 • Education, Life & Culture, Politics, UK

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So, what happened to Cameron’s promises that increased fees would be “sustainable, competitive and fair”?

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Maybe it was the Lib Dem’s barefaced lying. Maybe it was the throngs of protesters in the streets. Maybe it was the spectre of generations unable to attain a level of education taken for granted by those before them.

Whatever it was, it was perhaps the most memorable decision of the coalition’s governance. Following the Labour initiated Browne Review on university fees, the coalition voted in favour of almost tripling the maximum cap of university tuition fees from £3,290 to £9,000. The decision was pretty straightforward amongst the two largest parties, but it split the Lib-Dems in two. One of the campaign promises the Lib Dems had made was against raising tuition fees, and it is perhaps this U-turn, more than anything, that devastated their ranks in the 2015 general election. According to Lib-Dem literature though, the they managed to negotiate a cap on fees as opposed to the unlimited cap as recommended by the Browne Review.

“[A] greater choice for students with a stronger focus on high quality teaching” was the promise made by David Willets the then Minister of Universities. We were also promised that whilst universities could charge up to £9,000 a year, only in “exceptional circumstances” would they do so.

David Cameron described the reforms as “sustainable, competitive and fair”. How exactly has that turned out?

1- Sustainability. David Cameron made the point that then 60% of university funding was from the government and 40% from private. He wanted to reverse those figures. But the majority of private funding from students is still from the government, but this time indirectly, through student loans. The other portion of private funding is from corporations.

2 – Competitive. Cameron makes the point that students can then choose which university they would go to, based on price. But when one of the life’s biggest decisions is a choice between 118 universities that charge £9000 and 15 that charge £8500, is anyone really going to make a choice based on price?

3- Fairness. graduates would start paying back their loans at £21,000, rather than the then £15,000 threshold. This doesn’t account for inflation or how £15,000 in 2010 stacks up to £21,000 in 2015 when the higher charged students will graduate.

Table from Moneysavingexpert.com

Table from Moneysavingexpert.com

But is it fair for society at large when the debt is cleared automatically after 30 years, no matter how little is paid back. This table above shows that if a graduate’s starting salary is £15,000 and increases to £62,000 in 30 years, no amount of the loan will be repaid (this includes 3% inflation and 2% graduate salary inflation). Even at a £30,000 starting salary and an increase to £123,000 salary in 30 years, that loan will never be fully repaid. Indeed, the Higher Education Policy Institute says so many students will fail to repay their debt that the new scheme is as likely to cost money as save it.

The Reddin Survey of University Tuition Fees shows data that is counter to what David Willets promised about only a few universities charging the maximum. In fact, here, universities are notable by the fact that they DON’T charge the maximum £9000, mostly Scottish universities or very new universities which presumably wouldn’t be able to compete on prestige terms with the older institutions. Indeed, the UK’s only private university, University of Buckingham, where fees are £12,000, should have been an indication that universities will charge as much as they want or can.

Of the 133 universities on the 2014-2015 Reddin Survey only 15 can claim to not charge the maximum £9,000. Of these 15, however, only 8 charge less than £8,500 a year, the majority of which are Scottish universities. The universities that don’t charge the maximum are newer, less prestigious institutions, presumably because they feel that they can’t compete in terms of prestige – a side curiosity is that universities that regularly feature at the bottom of the league tables such as London Met and Southampton Solent believe their teaching levels and degree value are fiscally equivalent to that of Oxbridge or the LSE.

Charging the top rate hasn’t been an increasing trend since the raising of the cap – most universities raised their prices as soon as they could as shown from figures here in the 2012-2013 academic year.

Student Experience

The coalition promised increased fees would translate into “better teaching” and would “drive universities to offer the highest quality academic experience”. Yet a Higher Education Policy Institute study shows that the increased fees did not boost teaching time, it had stayed at an average of 14 hours, the same as 2007. The Office of the Independent Adjudicator shows an increase of student complaints by 25% in 2012.

Though there is clear evidence that students are taking university more seriously to justify the increased cost, the overall student experience hasn’t improved by any meaningful metric.

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So who actually benefits?

Apparently, the academic sector has fat cats too. And like all other sector, it’s a similar story, those at the top reap the majority of benefits at the cost of the rank and file. In 2014, vice chancellors at the UK’s top universities saw an average increase in pay of £22,000.

Steve West of the University of the West of England took in £314,632 in 2014, a pay rise of £52,434 of the previous year. Craig Calhoun took £466,000, of which £88,000 is deducted for relocation costs, means an increase of £100,000.

Most galling perhaps is Keith Burnett, Vice Chancellor of Sheffield University, who took a pay rise of £105,000, bringing his already impressive pay package to £370,000 in 2012-2013. This is more striking in the context that the university formed a subsidiary company to pay support staff lower wages than the nationally agreed pay for higher education. The university has also refused to ensure that all support staff earn the living wage, at £7.65 an hour.

These stories of unfair remuneration aren’t isolated – the average basic pay of a university vice-chancellor in 2013 was £226,789, and far more for members of the prestigious Russell Group, which stands at £300,000.This is in stark relief to the 1% pay rise that academic staff have been offered, year on year. This 1% pay rise would mean a 13% pay cut since 2009 in real terms.

As the Times Higher Education journal shows, the reason that vice-chancellors are increasing their salaries so drastically is because so many of the remuneration boards are made up of non-academics; bankers, corporate execs etc, where the rate of pay is just that much higher. LSE’s remuneration committee, THE points out, was chaired by Peter Sutherland the chairman of Goldman Sachs, whose CEO had been paid £12.6 million in 2012.

University Funding

David Cameron claimed that universities would be 40% funded by the public, and 60% privately, however, research shows that public funding will have dropped to 15% by 2015. This means that universities have to find funding elsewhere and private businesses have stepped in to pick up the slack. This means that they fund universities for private research, which directs academic staff away from teaching students.

It also raises huge questions about findings and data and how they are published – presumably a business wouldn’t want its research to fall into the hands of competitors, nor would a business want any failure to be published.

Students are a captive market; it has been drummed into school pupils that a degree is necessary for a fruitful career. They are faced with high entry prices into further education, high entry prices into accomodation from purpose build-to-let student housing invested in by hedge funds (particularly in London) Unite, Victus and Coral amongst others where prices start at £159 (for Tottenham Hale) and going up £349 a week closer to campus and high entry prices for actual learning materials with the average price of academic books at £43. In fact, the average debt a student who started after in the 2012 academic year will be £53,330.

The argument that higher salaries attracts more talented individuals from around the world so British universities can compete globally simply doesn’t hold weight – global rankings of universities have been largely stagnant, with the usual suspects continuously trading places. 2015‘s results are almost identical to 2014, same for 2013, same for 2012, same for 2011 etc etc etc ad nauseum

This article isn’t a critique of the raising of fees per se. It would be wilful ignorance to not acknowledge the financial deficit when the decision to raise fees was taken, but when supposedly “we’re all in this together”, we continue to see inequality even in times of austerity. So what what did raising tuition fees actually do? Vice-chancellors and senior staff benefit from increased fees, lower level staff receive below inflation pay rises and students are put in even more debt. Great

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