Tuition Reform

BY CHARLES GOODYEAR

Just over two years ago, London was burning. The educated youth, politically radical and working-class took part in widespread rioting, which spread to the heart of London. Protesters stormed the ruling Conservative Party’s headquarters, ransacked upscale shopping areas, and vandalized war memorials across the capital. The largest dem­onstrations spanned two months. During this time, the police arrested hundreds of people. To those looking on from abroad, the violence came as a shock, shattering the perception of the island nation as a peaceful, civil society.

So what began this upheaval? What was the source of this populist rage? In 2010, dur­ing the recession, the UK government cut its subsidization of education, causing univer­sity tuition fees to skyrocket. Maximum tu­ition rose from £3,375 to £9,000, equivalent to $14,000, thus pitching the government, the people and the universities in a financial battle against each other. U.S. students might dismiss such comparatively low tuition rates, but in a country where university was virtually free, such an increase was bound to cause debate.

Undoubtedly, this has placed pressure on lower income families. Alison Richard, for­mer Vice Chancellor of Cambridge University, sees these tuition reforms as not being “nar­rowly defined by budget cuts,” but instead by a “philosophical judgment,” an attempt to rebalance payment for higher education, which had previously been funded more by the public than by the individual receiving the education. Since society as a whole and the individual being educated both ben­efit from higher education, an equal con­tribution from both is a fair compromise.

The three critical players in this battle have much at stake. The government undertook reforms to reduce university dependence on subsidies, and thereby reduce spending. But universities, for their part, struggle with maintaining student enrollment numbers while attempting to expand their endowments. Students (especially those from low-income backgrounds) will now be under greater fi­nancial strain, and the quality of their higher education may suffer from rising enrollment.

Naturally, the students made themselves heard. “Everything exploded in the winter of 2010,” said Barnaby Raine, a high school stu­dent and self-admitted activist. Articulate and passionate, Raine describes the demonstra­tions as symbolizing the unpopularity of these reforms with those whom they impacted most: The students.

In response to the tuition hike, he helped to organize the 2010 demonstrations, and de­clared that “our protests attracted people from across the political board, with non-politicized students becoming politicized.” Citing the £50,000 worth of debt that the average student accumulates before graduation, Raine blames “Tory policies” for discouraging the poor from receiving higher education. The results of the tuition increase are favoring his argument: “In the face of everything the government promised us, numbers of students applying to university has fallen dramatically over the last two years, especially among poorer students.”

Given the rising tax and tuition rates, most believe higher education has been reformed to favor students who can afford the higher fees. Raine is sympathetic to such an argu­ment: “If I were from a working class, deeply indebted family, and had the choice between immediately joining the workforce, or spend­ing three years increasing my family’s debt (and a low chance of employment post-grad­uation), which would seem more reasonable?”

But these points trigger counterargu­ments. Said Richard: “It has long seemed to me that there are deeper, more fundamental questions underlying this issue.” She sees the current debate as one that must be viewed from a wider perspective. She believes these changes are moving towards a fairer system, with the amount of public money going to­wards university being reduced to make room for funds from the individual students.

Acknowledging that the reforms leave room for improvement, she strongly disputes the idea that they are a step in the wrong direction. “The way the UK approached the issue was philosophically wonderful,” with “a refined system supported by state and in­dividual beneficiaries” in a balanced manner.

She also took issue with the idea that uni­versity was becoming less accessible to the lower class, referencing the tuition payment system. This system ensures that the finan­cial burden of the reforms falls on the gov­ernment, not the students. The fees are not paid upfront, as they are in the US. Instead, students receive loans from the government to pay tuition, and then repay the govern­ment post-graduation through the tax sys­tem, at a rate dependent on their income.

A huge caveat to the system, however, is the loophole that allows graduates who earn less than £21,000 annually to avoid repaying their education loans for up to 25 years. As a result, the UK government doesn’t expect to regain even one third of the money it will lend out to students. Stu­dents may technically graduate in debt, but it is likely to be written off by the government.

Far from suggesting that the reforms will burden lower income families, Richard as­serts that funding university education will be too great a burden for the government to handle. Perhaps government fears that they could not finance the reforms led it to increase taxes for lower income house­holds, shouldering the financial burden of the reforms back onto the citizens. The isola­tion of tax hikes to the lower class supports the idea that the reforms are placing unfair pressure on those whom the government allegedly set out to help in the first place.

In addition, since the tuition increase, the vast majority of UK universities have begun to charge the maximum fees possible to students. As a result, many institutions of higher educa­tion are escaping the reach of poorer students.

Ruth Collier, head of Information and Press for Oxford University, is involved in expanding outreach and accessibility to lower income students. While she acknowledges the dif­ficulty these fees may impose on poorer stu­dents, the overriding belief is that prestigious universities “remain committed to increasing the diversity of their student body,” in socio-economic and ethnic terms. Collier pointed out that over 70 percent of Oxford’s revenue will be put toward student financial support, a result of an ‘Access Agreement’ signed be­tween universities and the government. How­ever, the drop in numbers of poor students ap­plying to university shows that this measure is not making education sufficiently accessible.

As tuition rates increase, university income is following suit. The Financial Times estimated that by 2014, the income of British universities will reach £26 billion, up from £24 billion this year. Interestingly, universities are not attribut­ing this newfound cash to higher fees. Instead, premier UK institutions are reaching out to alumni and trying to expand their endow­ments. From Oxford and Cambridge to less prominent universities like Bristol, donations from alumni and corporations have led to a greater interest in fundraising among univer­sities. New tax incentives have aided premier institutions in expanding their endowments.

This model of fundraising, however, will not work for all. While “the private sector will more than make up the costs for Oxford and Cam­bridge, the majority of universities with less renown and fewer alumni will suffer.” For ex­ample, according to Collier, Oxford has raised over £1.25 billion from alumni recently. But even among reputable colleges, private sector contribution cannot make up for subsidy cuts. The prestigious University College London, for example, is now cutting its humanities staff by the same number as it is adding to its prosper­ous engineering department. As a result, only select universities—or particular departments within universities—will be able to prosper.

British popular dissent is still palpable, but given how universities are profiting from the reforms, it is clear that its ire has been misdi­rected. While on the surface populist theories view the government as the criminal, the real­ity is more complicated, since the loan system over time will fiscally pillage the government. In fact, premier institutions are the sole groups profiting, but it is impermissible to castigate them as villains in what is a flawed system.

Regardless of whoever is most at fault, a disaster of growing scale looms just over the horizon. One thing is clear: The government cannot fund higher education forever. The financial time-bomb the government is tak­ing on will explode at some point in the com­ing decades, triggering further tax hikes and spending cuts with it. For true progress to take place, Britain needs a reform of the reform, especially of the unsustainable loan system.

Charles Goodyear is a freshman in Pierson College. Contact him at charles.goodyear@ yale.edu.