Better Funding for University Education

 

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A university education has we are told become more expensive, possibly for government, definitely for students.

A big part of the problem is that universities got a free hit when setting their price. When the government set a maximum level on fees for a degree it was no surprise that all universities set their price at the maximum knowing that for every student it could enrol it would receive the fee irrespective of the quality of the education or the true cost of providing it. Universities didn’t have to compete on price to receive their funding all they needed to do was fill their student quota. As a consequence the result has been an increase in Vice Chancellor salaries rather than an increase in the quality of education.

What is required is to put the choice into the hands of students when deciding to which establishment they want to attend and how much they are willing to pay for it.

Each student should receive a fixed amount of government funding to pay for degree level education. It may be that there are tiers to promote take up of science or medical degrees to take account of the societal benefits and the longer duration required to complete studies but the general principle of a fixed amount per student applies. Students would then be free to choose how and where they could spend the funding. It could be that they would top up the amount to pay extra to go to a specific college or chose to live at home to defray costs of living but the choice would be entirely theirs to make.

Universities would likewise be entirely free to set their own prices just as they currently set their own entry requirements. Those that consider themselves of a higher standard would be free to set a higher price. Others would need to compete for students by lowering costs. The universities would be incentivised to improve the quality of their education provision in order to attract students or go out of business. If higher funding is offered for science and other courses deemed to be more societally beneficial then universities will be incentivised to provide those courses.

Universities can tailor their courses more appropriately rather than see everything as a fixed three year degree. Two year or even one year courses could be offered. Students would decide what is appropriate for them rather than the one size fits all that is in operation at the present.

I would also propose UK league tables (not just a single ranking list) of universities based on student assessments or other agreed measures of the quality. Universities would compete to rise up or be relegated into lower leagues as a further pressure on quality, costs and price. It would also provide better information to wider society and employers as to the quality of higher educational establishments. Nothing provides better focus than the fear of relegation or the joy of promotion.

Students should repay the funding once employed within certain earning parameters as is the case now but no interest should be charged. Society will recoup it’s investment via the higher earnings and other societal benefits of a better educated population.

What will people argue against.

Firstly that the why should the better off receive a benefit from the state to fund their education. The funding would be available to all regardless of social standing although clearly some standard of educational achievement would be required to obtain a place at a college. The benefit from funding would be negligible in that the funding is repayable. The benefit accrues by virtue solely of an interest free loan not much different than the current funding arrangements but without the usurious interest rates charged. The benefits from a better educated society will accrue to society as a whole and those better educated members of society should repay the benefit received many times over in higher taxes and greater skills.

Secondly elite universities will be priced out of range of intelligent but poorer students. This is a possibility but the elite universities will still want to attract the best students and will not solely base their decisions on profit. Elite universities I believe will still offer bursaries and other choices in education to the less well off as they do now.

Thirdly universities will up their fees further. Yes some definitely will but the choice of whether to go to those colleges will be in the hands of the student. If it becomes too expensive entrants will fall. Universities will need to be far more critical of what they offer students rather than simply filling a quota and then applying to the government to pay a fixed fee for each student. Some colleges will find that they boost their income by revising their prices downwards rather than increasing them. Vice Chancellors will have to merit their salaries by managing their institutions rather than just getting as many students as possible for a plethora of courses many of which are of dubious merit and collecting a fixed fee per student from the state.

Fourthly, students will game the system and keep some of the money themselves rather than spending it on education. Some will and it is that very incentive that will put college funding on a better footing. It shouldn’t cost society any more but will put pressure on universities to properly price and provide quality education. Students have to have a college place, have to repay the money loaned but are free to manage that equation themselves. If a one or two year course works out as being a better option at a lower price then students are free to make that choice. If they wish to spend less at a less fashionable institution then so be it. If they prefer to stay at home and help the family finances then they are free to do so. I believe putting income into the hands of the young will be an economic benefit not a drag.

Fifth, some people just don’t agree with market solutions. I would say the focus should be on outcomes not methodology. 

Currently students are told the price of a university education and have no influence over that price yet it is they who are being asked to fund it. If universities are forced to compete for students then the higher education system will get better. Universities should not be handed cash without earning it.

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