Higher spending is not the key to equity

What is a reasonable balance between public and private funding of universities? The question would not arise if Western economies were prosperous enough that university costs increased no faster than rises in family incomes could manage in terms of higher tuition fees. But economic abundance seems remote in the short term, and, for years, the cost of universities in Australia, the UK, the US and elsewhere has far outpaced rises in wages and GDP. The temptation for governments to constrain their own spending on higher education has been overpowering.

Hence, the relentless rise of tuition fees. In England, that trajectory has recently been called into question in light of the electoral appeal of the Labour Party’s pledge to abolish fees. But the recent YouGov poll for Times Higher Education revealed that while most of the UK public opposes the government’s current policy, which trebled university fees five years ago and will raise them by a further 3 per cent in September, only a minority support Labour’s alternative.

The increase of fees to £9,250 is simply the latest consequence of an accelerating change in the makeup of the student body. Once, the student cohort was a small, elite and socially restricted group. Later it swelled into a mass of baby boomers, and is now a vast, globally connected community of people with endlessly varied socio-economic backgrounds and intellectual capacities.

This expansion has led to spiralling higher education budgets and a rapidly expanding student debt burden. In Australia, the this has spurred the government into action. Unpaid student loan balances from the government-funded income-contingent loan scheme, known as HELP, have grown exponentially; if unchecked, they will comprise nearly half the national debt within a decade.

Government attempts three years ago to deregulate fees and make deep cuts in public funding were defeated, but revised legislation reached the Australian parliament last week that would accelerate loan repayment and lift student contributions over four years by 7.5 per cent, to an average of 46 per cent of course costs. Almost all Australian vice-chancellors supported the original reform proposal, yet most oppose the new, more moderate legislation, despite its funding cuts being much the same. The deregulation reform would have allowed them to deal with cuts by varying fees, whereas the revised proposals leave them with volume as their only lever. Even larger classes seem inevitable.

Increasingly, we hear arguments that a degree brings primarily private benefits, so the funding burden should shift towards the student. Unquestionably, the private benefits of having a university degree are substantial. The gap between the lifetime earnings of a graduate and non-graduate, while narrowing in some fields, continues to be significant, while the proportion of jobs that require a degree continues to grow. For access to these benefits, an individual may reasonably be asked to contribute financially.

Yet there are benefits in a university education beyond serving private gain or workforce need. For any nation there are civic, health and social advantages in having an educated population. In most advanced countries, data shows that university graduates live longer, enjoy a healthier lifestyle, are less involved in crime and less often on welfare than those without a university education. They also have more tolerant and urbane views, and contribute more often to public and political life. For these qualities, which benefit society at large, governments should continue to contribute significant support.

Allowing near-unlimited admission was motivated by a desire to see all sections of society share in the benefits that university education can bring. But in Australia, as in the UK and the US, some 25 per cent of those now entering university are not sufficiently well prepared to ensure that they will graduate in the minimum time: they need remedial work, but attempts to provide it have had mixed outcomes. Moreover, it remains the case that too few from disadvantaged backgrounds apply: these cohorts are still too often ill-prepared by their high schools, too ill-informed about their options and not sufficiently encouraged to aspire to university study.

It is not at all clear that raising university fees and collecting student debt more effectively will help with the equity problem. Any lift in fees creates hardship, and needs to be accompanied by a compensating lift in scholarships and financial assistance for those who need it. Moreover, these scholarships should probably awarded at high school, as part of a comprehensive testing plan to identify those with aptitude for university study and to address their remedial needs. Only then will universities return their focus to admitting those with demonstrated aptitude for university study – and that may be a smaller cohort than universities currently admit.

One finding of the THE survey was depressing: that, by and large, the UK public does not regard university fees as a priority election issue. The same survey in Australia would have had a similar finding: sadly, there are few votes in university policy. Thus, the chances seem remote that politicians in either country will mount bold higher education policy reform that will address the real causes of inequitable access, instead of simply extracting more fees from students or pouring more public funds into the pool.

Warren Bebbington is a professorial fellow of the University of Melbourne and was until April vice-chancellor of the University of Adelaide.