Dearing holds the answer to fees payment crisis

As news gets around that students owe universities millions of pounds, payment of tuition fees could become as voluntary as payment of the poll tax by students in the 1980s unless universities get tough.

The government, irresponsibly, gave a hostage to fortune during the passage of the fees legislation by promising to require universities to handle students sensitively. The promise cost nothing: universities' grants are docked by the amount students are expected to pay, not by the amount collected. Tuition fees are in effect a central tax farmed out to universities as local tax gatherers in a way reminiscent of the Tudor monarchy. And the position could get worse if, as we reported on July 23, universities that take tough action withholding degree results or expelling students risk legal damages under the Human Rights Act.

Before non-payment becomes an epidemic, the Department for Education and Employment review group on fees and the Cubie committee in Scotland should revisit the recommendation of the Dearing committee. This stated that students should contribute to the cost of their education - but out of their earnings after graduation. Fees would be paid up front by means of a loan and the loan would be repaid on an income contingent basis later. This way students could be treated as autonomous adults and institutions could be sure of their money. The recommendation rested heavily on the Australian model. It was apparently rejected because the government had not yet reformed the accounting basis for loans and the entire cost would fall on the public sector borrowing requirement. A new government under suspicion of profligacy and committed to tight spending plans could not risk the hike in spending. But things are different now. The accounting basis has been sorted out. Loans could be available to all to cover fees regardless of family circumstances and the universities could more acceptably refuse to register anyone who did not pay up front.