University top up fees

The prime minister is evidently determined to press on with his plan for differential ‘top-up’ university fees — different fees charged by different universities and faculties, to be paid at the start of the student’s university career by a loan authority to which the student will refund the amount advanced to him (or, more likely these days, her) after graduation in yearly instalments, but only when his or her earnings begin to exceed a cut-off point, currently set at £15,000 a year. Both universities and the state will give means-tested scholarships so that students from poorer homes won’t have to pay the fees at all, either up front or after beginning to earn more than £15,000 a year; or else will be charged (and lent) reduced fees. The government’s search for a new and additional source of funds for tertiary education is made more urgent by its declared target of having 50 per cent of all young people going on to some form of higher education, an increase on the present situation of some 7 or 8 per cent, although if there’s any rational basis for setting the target at 50 per cent I have yet to hear it. Serious objections are being made to this plan, from the government’s left (the LibDems and well over 100 Labour back-bench MPs) and from its right (the Tories), as well as from some, but not all, of the liberal press. It’s strongly supported by a raft of university vice-chancellors and heads of colleges, desperate for more money than the government is willing to provide out of taxation, and equally strongly opposed by student union leaders.

The weakest argument against the scheme, it seems to me, is that allowing different universities and faculties to charge differing fees will lead to élitism, a two-tier university structure, and the effective reservation of the top universities and most prestigious faculties to the affluent middle classes, with the children of working-class families only able to afford the cheaper also-rans. It’s unfortunate that this is emerging as the main plank in the anti-government case, because it’s the most easily rebutted. It’s obvious that some universities and faculties incur much higher costs in delivering education than others; that some enjoy more prestige than others; and that for numerous historical and social reasons, class prejudice and discrimination tend in many cases to colour both choices and accessibility of university and faculty. It’s equally obvious that some universities and faculties need more money than others to continue to function and to build on their strengths and specialisations. But there’s no necessary logical progression from this to the proposition that therefore students should pay differing fees according to the costs of their courses. Students are only ever going to contribute, if anything at all, a small proportion of their total costs. The rest will always have to come from public funds, and there’s no reason why those contributions from the state shouldn’t continue to absorb the differentials just as they do now.

The real question is whether the balance of advantage lies in making students — or rather graduates earning more than the set annual income — pay an arbitrary proportion of the costs of their higher education, in order to relieve the taxpayer of the necessity of paying more tax (or the government of the obligation to find a way of transferring the costs from lower-priority spending to the higher education budget). It’s argued that possession of a university degree enhances the student’s later earning power by some average amount, from which he or she may reasonably be asked (asked!) to make a contribution in repayment of the expense incurred at university. But this average conceals a huge variation in the earnings of graduates, from those who become researchers, teachers, middle-ranking civil or municipal servants, to those who go into banking, insurance, business, show business and the media, some quickly earning very large salaries and other benefits. It’s hard to see any justice in imposing the same rate of repayment obligation, which is in practice simply an extra tax, on the graduate who has just scraped past the £15,000 threshold (far from a passport to wealth) as that imposed on a young City gent on around a million a year. There’s even less rhyme or reason, surely, in excusing from any repayment at all the young man or woman who has been given a scholarship at university because of coming from a low-income family, but who goes on after graduation to earn five or ten times the income of a former fellow-student from a marginally better-off home who has barely managed to prise his or her earnings above the threshold.

The fact is that those whose degrees help them to earn more than non-graduates already “make a contribution to their education” by paying more income tax than those who earn less than themselves. Why single out university graduates for a special higher rate of income tax than those whose prosperity is derived from other factors, such as inherited or donated wealth, ruthlessness, chicanery, superior intelligence, hard work or plain good luck? True, it may legitimately be asked why those without a university education should “subsidise” through their taxes those luckier or cleverer than themselves who have had an earnings-enhancing university education funded from general taxation. But there are two answers to that: under virtually any conceivable system, there will be an element of subsidy benefiting those educated at public expense, whether or not they are made to contribute some part of the cost from their own pockets, then or later; and, even more cogently, the whole of society benefits from the existence of a university-educated element with, one hopes, trained and analytical minds and skills that raise the levels of management and administration, government, the professions, the arts and public and professional discourse, all vital for the quality of life of everyone. The argument that beneficiaries of public services such as education should pay back part of their costs when able to do so could equally be applied to the National Health Service (why should those who keep themselves fit by a daily work-out subsidise with their taxes those who smoke or eat too much?) or to secondary education (why should those who leave school at 16, or indeed earlier and illegally, subsidise those who stay on until 17 or 18 and thus improve their later relative earning capacity by getting good A levels?).

There are two more killer arguments against the proposals. Lower-middle-class and working-class families, and indeed many others too, are famously averse to incurring large debts. Not all of them can hope to get scholarships to reduce or eliminate the need to borrow the money for later repayment of fees. How many of them will consent to their bright offspring going to university if it means a son or daughter shouldering a massive debt running into tens of thousands of pounds, and an obligation to start paying it off the moment later earnings exceed an extremely modest £15,000 a year? If this had been a condition of university entrance, neither my father nor indeed myself would have dared to launch me on a university education. The same is true of my wife and of a raft of our university contemporaries with whom we have discussed it. This will be a huge deterrent to university education for the less well-off and even for the comfortably-off — but by no means rich — middle classes. Even more dismayingly, the whole scheme drives a huge hole through a basic tenet of socialism, indeed of any reasonably progressive principle of politics: certain essential services such as health and education, sewerage and street lighting, defence and policing, town and country planning and protection of the environment, are best financed collectively, even if some derive more benefit from them than others: and any consequent inequality is properly corrected by progressive taxation related to ability to pay, not calculated by the extent of the individual’s use (or lack of use) of the services provided. It’s a topsy-turvy world in which proposals for the partial commercialisation of higher education are forced through by a Labour government against the opposition of socialists, social democrats and Liberal Democrats — and Tories.