It is a point of faith among many Liberal Democrat members (54% of them, according to the Lib Dem Voice survey) that university tuition should be funded out of general taxation. A report from the Liberal think-tank CentreForum, Time’s up: why the Lib Dems should end their opposition to tuition fees ought to be required reading for any Liberal Democrats entering this debate. The report argues that the old Liberal Democrat policy on fees is both regressive and ineffective.
It seems entirely perverse to me that tuition fees should be paid for from general taxation, because graduates earn significantly more than non-graduates. Going to University is an investment in your future, in the literal sense – and an investment that more often than not pays off. The Browne report suggests that the cumulative extra income of someone with a University degree is £120,000, compared to people moving into the workplace with just A-levels. The Government has also calculated that the Graduate Premium is worth £400,000 compared to the national average wage.
As most taxpayers are non-graduates, with something like £400,000 lower lifetime earnings, a policy of taxpayer-funded university involves a significant redistribution of resources from poor to rich.
Interestingly, CentreForum’s research finds that there appears to be little or no link between a graduate’s income and that of her parents. Higher education appears to have become a successful class leveller.
The problem is that there is still a disproportionately low number of students from poorer backgrounds. According to Alan Milburn’s work, in 2000 (the year I entered University), 39,900 young people from less advantaged socio-economic groups went into higher education – representing 25.0% of all young people entering higher education. Young people from less advantaged backgrounds represent half of all young people nationally. By 2007 (under a fees system), this had slightly increased to 48,900 young people, or 29.1%.
This rise was far too modest, but fees doesn’t seem to be the deciding issue. The CentreForum report shows that the old system of ‘free’ tuition did not increase the number of deprived youngsters going to University. In fact, the participation gap between the social classes grew fastest between 1977 and 1995 – three years before tuition fees were introduced.
It’s also interesting that for students with equal A-level results, the likelihood of going university cannot be predicted on the basis of their parents’ incomes, fees or not (although there is evidence that poorer youngsters are less likely to get access to Russell Group Universities, overwhelming less likely to get access to Oxbridge, are more likely to choose local HE institutions, and more likely to choose courses with lower graduate premiums). The real issue is preparing poorer pupils for university, and making sure they get the grades at A-level.
University still isn’t the destination for enough less-advantaged young people. But from the evidence, it doesn’t seem to be the fees that put them off- particularly as we’re talking about deferred fees, variable and based on future earnings.
What does seem to be unfair is to have the regular taxpayer fund largely middle class people (even if they weren’t middle class before they entered University, the statistics show that they likely will be afterwards). The money would be better spent on the pupil premium or the tax cut for low earners – getting poorer pupils into the academic position to go onto Higher Education.
The NUS pledge that our MPs signed before the election was: “I pledge to vote against any increase in fees in the next parliament and to pressure the government to introduce a fairer alternative.”
Vince Cable’s suggestions include variable fees dependent on future earnings and scrapping up-front costs for part-time students. When Vince says he is introducing “a fair and progressive policy for Higher Education”, I think he’s right.