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6:25pm on Monday, 4th April, 2011:



I keep meaning to blog about university fees, and today have finally got around to it.

OK, so the basic argument runs something like this. It costs too much to run universities in England (Scotland, Wales and Northern Ireland have their own systems), so students are going to have to pay more themselves. The current maximum amount that universities can charge students is £3,290 per student per year. All universities do charge this, too, but sometimes reduce it by giving students bursaries; this means they can be competitive without looking cheap.

Anyway, the government is going to allow universities to raise fees to £6,000, or £9,000 in exceptional circumstances. They seem quite surprised that so far all but one of the twenty or so universities that have announced the fees they will charge have gone for £9,000. The top ones announced it first, and now we're working our way down the list. I would be highly surprised there were a single university in the Russell Group or 1994 Group that didn't go with £9,000 (unless one went with £8,995 for reasons of sarcasm). Not to go with it is to say you're a second-rate university. We could end up seeing even some fourth-rate universities charging this amount, the way it's cascading down the list.

It makes sense for commercial reasons, too. With the grants cuts that universities have been told about, they need around £7,500 per student to break even. However, because the "exceptional circumstances" provisions mean that if you charge more than £6,000 you have to give big hand-outs to poor (as in having little money) students, this means that universities have to charge more than £7,500 so they can afford to subsidise the poor students. It works out at something like £8,600 or so for a university like Essex, just to keep the current level of staffing and with a pay freeze. That being the case, of course universities are going to charge the full £9,000 — why wouldn't they, when they're so close anyway?

Now the government seems to think that the free market will kick in here, and students will prefer to attend universities where the fees are lower. Why pay a total of £27,000 for a degree when you can get one just as good for £18,000 elsewhere? Well, they seem not to have accounted for two important points.

Firstly, the degrees in UK universities are not "just as good" elsewhere. Some universities are actually better (gasp!) than other universities. The pecking order is like this:

1 World class. Oxford, Cambridge, LSE, UCL, Imperial.
2 Large, international class. Russell Group.
3 Smaller (no medical school), international class. 1994 Group.
4 Research-oriented, national class. Brunel, Keele, Kent, Aston, Salford, Salford, Bradford, ...
5 Business-oriented, national class. University Alliance.
6 Training-oriented, national class. Million+.
7 Local class. Everything else.

Essex, where I teach is in the third tier: we're looked down on by the ancients and the redbricks, but respected enough that were you to apply for a lectureship job at a university in the first tier, then having a PhD from Essex would be regarded as no obstacle. For fourth tier universities, it would probably depend on your particular subject area. For fifth down, you have no chance.

If you want a degree that's "just as good" as one somewhere else, then that "somewhere else" is going to be in the same tier. Each university wants to charge roughly the same as the other universities in its tier, but more than ones in lower tiers (because the higher tier's degrees are better, so are worth more). However, unless they know what the tier below them is going to charge, they can't give it a the chance to charge more because then their own degrees would look less prestigious. Also, they want to know what the tier above them will charge, so they can charge more if there's an opening. This is why universities are announcing their fees from the top tier down, and why we probably won't see any real departure from full fees until the fiction that all degrees are of the same quality breaks down, probably around tier 5 or 6.

The second factor the government doesn't appear to have accounted for is that the free market makes no difference to prospective students. If you have no money, then £18,000 and £27,000 are the same amount: more than you have. If you're going to go to university and it's going to cost you more than you have, it doesn't matter whether that more than you have is £18,000 or £180,000 — it's more than you have. Once you've decided you're willing to pay more than you have to get an education, you're going to pay it. Only if there were a huge range of prices might someone who could afford a low price contemplate buying an inferior product, but only because they could buy it without getting into debt.

This is a hole that the previous government dug, and that the current government is digging deeper.

Ultimately, the problem isn't that fees are too low, it's that we have too many universities.

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Copyright © 2011 Richard Bartle (richard@mud.co.uk).