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MOVING TO FRONT FROM YESTERDAY TO ENCOURAGE CONTINUED DISCUSSION AND INFORMATION
Further thoughts from readers in the UK about what transpired today? Also, readers are invited to continue the lively and informative discussion from the earlier thread here.
This will be good for the Left in the long term. The left-wing vote has been split for a century in the UK, resulting in predominantly right-wing governments despite a predominantly left-wing electorate. Now, because of today's events, the Lib Dems are finished as an electoral force. They were on 8% in the polls before today (33 points down on Labour, having been level on the eve of the General Election), and they're only going one way from here. I can't see a way back for them.
The problem is that the 27 Liberal Democrat MPs who voted for the bill violated an explicit and unconditional pre-election pledge to oppose any rise in fees. Many of them were photographed holding the pledge in their hands. Voters forget policies and details, but they won't forget a betrayal on this scale.
Jonathan Birch is probably correct that this will be bad for the LibDems and therefore good electorally for Labour (and for fringe left wing parties, though not enough to make any difference): even though Labour first introduced tuition fees, and has not said it will reverse the current increase in tuition fees, and doubtless will not reverse the increase if they win the next election.
His claim that the UK has a ‘predominantly left-wing electorate’ is far more contentious. Opinion polls generally show majority support for traditional right-wing policies such as tougher punishment of criminals, reducing immigration and reducing taxation. There is also strong support for low levels of unemployment, and unemployment is generally higher when Labour governments leave office than when they enter office. The UK electorate of course love the NHS (which is why the Tories had to promise to ring-fence NHS spending) and want an adequate welfare safety net (which is why the Tories will maintain it, albeit being a bit more stringent with claimants – which the majority of the electorate agree with).
I am keeping my fingers crossed that things work out ok for the arts & humanities with the fee rises. Given the massive budget deficit which the last Labour government landed the country with, whoever won the last election would have had to make big cuts somewhere. If as a result of making future graduates earning over £21,000 pay back a larger loan the government is able (as they are proposing) to raise the tax free allowance to £10,000 and reduce the benefits trap (c.f. Iain Duncan Smith’s proposals) both of which will significantly benefit the worst off, then it will be very difficult to argue they have done the wrong thing.
(How odd to read someone – Tina Shoebb – recycling Conservative talking points on a Leiter comment thread!)
My guess is that we'll see much harder times for all institutions outside the Russell Group (and maybe some inside), a dramatic fall in total student numbers, a contraction in the number of degrees without some obvious occupational payoff, and a significant shift in the social composition of the student body. Within universities there will be further shifts in power to administrators (who will now move to "reduce the staff headcount" – yes, that's the language) and a fearful academic workforce, afraid to step out of line. Britain will continue to have some "world-class" universities, so some philosophers at those institutions will be able to carry on pretty much as before.
I'm not sure I agree with JB that this is necessarily all that bad for the Lib Dems in the medium/ long term. Of all the proposals in the coalition's programme, this one was likely to be the most traumatic for them. They've got the right to abstain on much of the rest (eg Trident), and they're much less divided in other policy areas. Nick Clegg may have difficulties, but Vince Cable and Chris Huhne have managed to retain much of their public appeal – at least, so far.
There's almost 4-and-a-half years of this Parliament left; that's a hell of a long time. For as long as the coalition can keep itself together for that long – and there's no reason to suppose that it can't, especially given that Labour has said that it's going to spend a couple of years formulating what it thinks – that's plenty of time for the LDs to come back into favour, with or without Clegg at the helm. It won't be easy for them, but it's eminently doable if there's not another recession.
Voters, I suspect, will forget this episode; and many of those that don't will probably not care about it come 2015.
Having said that, the LibDems will probably be annihilated in the next round of local elections, and they might as well just give up on the London mayoralty.
The idea that Labour saddled the country with a massive budget deficit suggests that other parties would not have tried to rescue the financial sector in a similar way. I don't believe this at all and part of the reason is that the new government is continuing a similar policy: witness the rescue package offered to Ireland.
In any event, such talk is the stuff of emergency cases and ticking bomb scenarios. It is most definitely *not* the case that the country has *no* option but to cut 80% of funding for teaching at universities (including a cut of 100% in teaching support in the arts, humanities, and social sciences). Why? This is because the government is spending plenty of new funds on many other projects worth several billion. This is not about making necessary cuts. This is about reshaping the state along an ideological vision.
The government is trying to have it both ways in arguing that the massive cuts should be welcomed by students because of the more "fair" deal they can expect. There is nothing particularly fair about trebling student debts that will do no better than plug funding gaps. The government says that we are "all in it together" and that we must act now to avoid passing on massive debts to the next generation….and then it elects to ensure that all students will take on far greater debts than present, debts that the ministers concerned never had because they had a free university education.
If we're in it together and this deal is so fair, then let's see just one minister in favour of the new deal voluntarily joining the scheme and paying back to the state the costs of the free education s/he received as a student. If none of the 15 or so millionaires in the government are willing to lead by example, then it sounds like empty talk and another broken campaign pledge.
Tony Blair never recovered his popular public image after supporting the Iraq War: he won the vote, but lost the argument amongst the public. Nick Clegg and many Liberal Democrats may find themselves in a very similar situation.
Replying to Thom Brooks: I think we need to be clear on some of the numbers (with apologies for repeating some of what was said on the previous thread).
(i) The government is predicted to be cutting around 25%, not 80%, from its overall funding for teaching at universities: the decrease in its T grant spending is largely though not entirely made up from its substantial subsidy increase to loans. Insofar as this is ideologically driven, the ideology isn't "get goverment out of the business of funding higher education teaching"; it's something subtler. (And to be fair, the most interesting objection raised on the previous thread to these proposals, and one that I don't think I or other cautious supporters have yet to properly engage with, is that the real problem is the shift in how resources are allocated, rather than decrease in resource levels – "commodification" is Chris Bertram's useful phrase.)
(ii) It's also a bit misleading to talk of a "trebling" of student debt: partly because the fee is going from £3,000 to between £6,000 and £9,000 depending on institution, not to £9,000 everywhere; partly because student debt includes a maintenance component that will be static; partly because repayments are at a slower rate. The IFS estimates that the present value of the debt will go up by about 50% on average, though that conceals quite a sharp dependency on income, with the bottom 25% of earners paying less than at present.
(iii) "trebling student debts… will do no better than plug funding gaps". But an institution that charges the full £9,000 p/a will see a 30% increase in teaching income (again according to the IFS).
Replying to David Wallace:
The IFS numbers make a number of assumptions about what the final plan will look like and this plan has changed rather frequently. For example, the vote yesterday concerned the ceiling on tuition fees: it was not concerned with the strings to be attached on universities (e.g., will there be a levy as recommended by Browne?) nor the conditions of repayment, etc.
There is high speculation on what all universities will charge. Technically, the new range is now between £6000-9000 *but* much talk is that fees will need to be at least £7000 to plug funding gaps. Moreover, if there is some levy imposed on fees, then any increase in funding will be mitigated accordingly. I must say I agree entirely with Chris Bertram – "commodification" is a major worry, as is the new super quango to be imposed that may weigh in on admissions policies.
These are murky and relatively uncharted waters for British higher education, entered into without sufficient debate — there most definitely should have been a white paper, as acknowledged by one Lib Dem aid I've heard from.
On a positive note, this may support further internationalisation in which UK students look at the cost of degrees in other EU countries – most obviously Sweden where many courses are taught in English and where EU students do not pay any tuition fees. That may not be good for UK universities but it may not be bad thing for students who take up this route.
For those interested, you can check out compartive costs by looking at this site:
http://www.studyineurope.eu/
Teaching in English is becoming much more widespread in Europe and I wonder if the government may have underestimated the likely effects on headline debt on students choice by assuming a national context.
David Wallace contests the figure of 80% for the overall cut, but not the figure of 100% for the cut in teaching support in social sciences, arts or humanities. The subtle ideology, then, is "get government out of the business of funding higher education teaching in social sciences, arts or humanities".
Replying to (if I may) Thom and Jennifer:
– sure, I certainly don't want to take the IFS figures as gospel. But if we're going to be referring to figures, they're about the best we've got. At any rate, I think they're substantially more reliable than the headline figures (80% government funding cut, trebling of debt) which don't even attempt to allow for the size of the government loan subsidy or the slower repayment threshold.
– regarding a levy, I guess anything's possible, but (i) the government has been pretty explicit about ruling it out; (ii) legislatively it would make virtually no sense to add a levy next year having passed today's legislation. (On the university side the new rules actually work within the framework of the existing legislation, they just represent Parliament exercising its right to change the actual fee levels. Introducing a levy would, I think, require the legislation itself to be rewritten, which would make yesterday's Commons vote rather pointless. … that's if I'm understanding right; I'm no lawyer.)
– I didn't contest the "figure of 100% for the cut in teaching support in social sciences, arts or humanities", but that was an oversight, so let me do it now. My criticism of the 80% figure applies here too, i.e. the government is cutting teaching grants very steeply – 100% for A/H/SS – but is also increasing fee subsidy very sharply, including for students doing A/H/SS subjects. The IFS figures aren't sufficiently broken down to work out reliably what the effective numbers for A/H/SS are, but here's a crude estimate (based on zeroing the HEFCE figure in the IFS data and leaving everything else unchanged): for a university charging a £7,500 fee, the government contribution drops by 35% and the overall teaching budget is unchanged; for a university charging a £9,000 fee, the government contribution drops by 25% and the overall teaching budget rises by 20%. I wouldn't put much quantitative faith in these numbers, but the qualitative conclusion stands: *serious* amounts of public money are still going to be spent by the government on A/H/SS teaching; the cut isn't close to 80%, let alone to 100%. (The concerns of Chris and others about the consequences of the very different method by which that money reaches the universities remain, of course.)
– I have a lot of sympathy, in principle, for the view that more time for consultation would have been nice. Politically, though, it was always pretty obvious that the coalition would want this trickiest of issues out of the way as soon as possible, and the student protests probably accelerated that if anything.
I agree with David Wallace's claims above regarding the numbers. On these two threads, I've also argued that the goverment's policies do not constitute anything like a "cut of 100% in teaching support in the arts, humanities, and social sciences", and that they do not amount to anything like a trebling of the debt that students (apart from the highest earners) will carry:
http://leiterreports.typepad.com/blog/2010/10/the-privatisation-of-the-humanities-in-england.html
One thing I'd add to what David says in response to Thom is that the IFS report is based on what the government had announced on its BIS web page, as of Wednesday morning, that it would be doing. These announcements regarding the government's policies for higher education beyond the raising of the fee ceiling informed Thursday's Parliamentary debate on whether the ceiling should be raised to £9,000.
Thom — your claim that the government will be cutting "80% of funding for teaching at universities (including a cut of 100% in teaching support in the arts, humanities, and social sciences)" also relies on governmental announcements regarding the T-grant that weren't voted on yesterday. You shouldn't selectively rely on this announcement while ignoring the government's announcements regarding the writing off of loan debts, which forms the basis of David's and my claims that a substantial governmental subsidy of the teaching of the arts, humanities, and social sciences remains under the government's new policies.
Another point that is worth bearing in mind, to those who represent the government's new policy as an attack on the social sciences, arts, and humanities in particular, is that (with the exception of the performing arts, about which more below) the difference in the absolute amount of money per student that goes to support a science, technology, engineering, or medical students versus a social science, arts, or humanities student remains roughly the same as it was under Labour. This differential is meant to reflect the extra money for laboratories that is needed to teach the former. The principle is that students who are more expensive to teach because of lab costs shouldn't pay higher fees on that account. This strikes me as a sound principle. Others may disagree, but it's not an outrageous principle.
At present, the government's T grant is about £4,000 per humanities, social science, or (non-performing) arts student, £16,000 per medical student, and £7,000 per other science student. Each of these grants will be reduced by about the same amount in absolute terms: roughly £4,000 (thus reducing the humanities T grant to zero). Hence the differential will remain the same in absolute terms.
In the case of the performing arts, however, the T grant will go down by a greater amount in absolute terms: it will go down from about £5,200 to zero.
This accounts for the fact that places that specialize in the performing arts such as the Guildhall School of Music & Drama will have to charge higher fees than other places in order to end up with the same amount of teaching money per student as before. Guildhall will need to charge £7,700 per student to break even, whereas the average university will need to charge £6,900 to break even.
I can sympathize with objections made on behalf of performing arts departments. But I don't think the non-performing arts, the humanities, and the social sciences have any special grievance as well.
Click here and scroll down to see how much different UK universities will need to charge to break even:
In studying the list, to which I linked above, of how much different universities will need to charge to break even, I was struck by the fact that St George's Hospital Medical School will need to charge nearly as much as Guildhall School of Music & Drama to break even and that Imperial College London, which specializes in science and engineering, will also need to charge significantly above the average to break even. The LSE and SOAS, which specialize in the social sciences, by contrast, will be able to charge significantly below the average in order to break even. This leads me to think that the reduction in absolute terms of T grant funding for medicine and the hard sciences must be somewhat greater than the reduction for the social sciences, humanities, and non-performing arts.
(Oxford and Cambridge are very low down the list, and that low placement is a mystery to me. Perhaps this confirms the 'Yes, Minister' principle that the Tories would like to protect Britian's univerities … both of them.)
1. Going back to the original comment on whether this will be good for the Left, it is worth noting as a historical point that the Liberal Party has a history of splitting after coalition with Tories (3 previous occasions) – and it wouldn't be desparately surprising if history repeated itself.
2. Since my attempt at humour failed, let me restate the point about the EU. By shifting to up to £9000 a year in tuition fees (even if the payback may be less for many as David Wallace and Mike Otsuka have argued and IFS report supports), then for a significant group of students from middle income families who won't receive any significant grant support for maintenance, there are now significnat incnetives to study at univeristies where they will pay no or only very nominal tuition fees. Since it is possible to do your entire degree in the English language in Sweden, Holland and heading that way in Germany under these tuition fees considerations, there are very real options open to such students, particulat given relatively cheap and easy travel across the EU. Ironically it may only be the poorest and richest students who don't have such incentives.
Thanks to David and Mike for their helpful analysis.
One thing which (I think) has not been mentioned in this thread and the previous one is the way universities may change in response to market pressures, given the possibilities opened up by new technology. It is possible that many universities, particularly the new universities, may end up looking more like the Open University.
One can imagine students watching online recordings of lectures, perhaps made in previous years by academics at institutions other than their own. Then their own University would supply seminars, tutorials, marking etc. (which might also be done online). Such courses might be much cheaper and more convenient than conventional degrees at Russell group universities, and so be attractive to students.
One can imagine a situation where (for example) each year students at ‘New University’ and ‘Modern University’ watch the same lectures as UCL students (albeit online) and take the same exams, but live in a different town, and take seminars and tutorials with different academics.
-=-
If I might briefly reply to a couple of earlier points.
I don’t know why Christ Bertram accuses me of ‘recycling Conservative talking points’. The points in question are frequently cited in newspapers across the political spectrum, and entirely reasonable ones to make in the context of the discussion.
Thom Brookes implies that the UK’s massive deficit is simply the result of Labour rescuing the financial sector. But, as I understand it, Labour were in running a budget deficit at the top of the economical cycle, which prudent governments would not be, and as the result of which the deficit is significantly higher than it otherwise would be. Moreover the financial bailout was pretty much a one off cost, but the country has a structural budget deficit (ie the budget is in deficit each year, and without cuts will continue to be so, even taking into account our position in the economical cycle: so without cuts the total deficit just keeps increasing).
Of course Thom Brookes is right that the question of how to deal with the massive budget deficit (what to cut, and by how much) is a political/ideological one, one which will vary between parties. But given that Labour has not committed itself to reversing the changes, and is highly unlikely to do so, it might be that this cut in spending is one upon which Labour, Conservative and LibDems agree. It was Labour who brought in student fees to start with, remember…
I've just got my head round the UCU list that Mike linked to. It's fairly crude: basically it works out how much money HEFCE currently gives to each university for band C and band D subjects, divides it by the total number of band-C-or-D students, adds the current tuition fee, and takes the result as the new tuition fee. Since HEFCE's existing funding is based on a fairly simple formula, pretty much all the variation between universities' HEFCE income comes down to
(a) the university's ratio of band-C to band-D subjects (band C is more expensive)
(b) the university's completion rate (HEFCE includes a "completion rate weighting" which I confess I don't entirely understand)
(c) whether the university is in London (there's a London weighting)
So Oxford and Cambridge are very low down the list because (a) they have a high band-D-to-band-C ratio, (b) they don't have any completion rate weighting; (c) they're not in London.
Actually, to be honest I don't trust the UCU figures at all at the level of universities, because (a) seems to be the most important factor, and the goverment's criterion for which courses lose what amount of funding will cut through group C, protecting some but not all courses in it. UCU acknowledge that some group-C courses will be protected, but they don't seem to have taken on board the very large error bars that introduces in their estimates (or the fact that their estimate is going to be systematically too high).
One thing that concerns me greatly is the long-term effect on the political dynamics of the UK. Some people, such as Jonathan Birch above, think this will be good for the left. I'm not so sure.
Supporters of the Tory proposals, such as Mike Otsuka, have endlessly recycled the point that the existing system (and even more its predecessor) involves taxing (inter alia) less well off people who don't go to university in order to pay for better-off people who do. Now I think this is an odd objection, for all sorts of reasons, including that it makes little sense to scrutinize each expenditure programme for its distributive effects, rather we should look at the total package. Currently, however, middle-class taxpayers get something very tangible for their taxes: formerly free and now heavily-subsidized tertiary education for their children. There are many expenditure programmes that benefit the poorest in society and not the middle class, but middle-class support for taxation-and-spending can be maintained (at a higher level than would otherwise be possible) because of the things that the better-off do get. Now we shall have instead a system where the middle-class perceives itself as facing massive additional charges outside of the tax system. It is surely likely that there will be pressure amongst such people (and in the newspapers they read) for tax cuts which will then require further cuts in those programmes that do benefit the least advantaged. By undermining the social coalition that supports the welfare state, advocates of these changes will have brought serious harm to those on whose behalf they've made claims of fairness.
Thanks, David, for reading the fine print of the UCU posting. So I now see that this list completely ignores 'Group A' clinical medical courses that now receive about £15,804 in T grant support per student and 'Group B' courses like physics, chemistry, biosciences, and engineering that now receive about £6,717 per student. Therefore, contrary to what I had assumed in my last comment, the UCU list doesn't shed any light on how much funding will be reduced for Group A and Group B.
The UCU list tells us how much a university would need to charge in fees to receive as much overall funding as before just in their 'Group C' and 'Group D' courses, on the assumption that T grant funding for all such courses will be entirely eliminated. Group C courses, which include the performing arts, now receive £5,136 in T grant support. Group D courses, which include most of the humanities and social sciences, now receive £3,951 in T grant support.
(My earlier figures for T grant support were a bit higher than these, because they didn't reflect a recent cutback across the board in this support.)
Group C courses include, not just the performing arts, but also such subjects as mathematics, modern languages, architecture, archaeology, and psychology. The assumption is that these courses all involve some sort of "studio, laboratory or fieldwork element" that makes them more expensive per student than, say, English, philosophy, or politics. But they're less expensive than the hard sciences or clinical medicine.
The government has announced that it "will continue to fund teaching for Science, Technology, Engineering and Mathematics (S.T.E.M) subjects", though it has not yet specified the details. UCU is assuming, on the basis of this announcement, that T grant funding will be eliminated across Group C and D subjects. It notes, however, that this assumption oversimplifies things, since "some Price Group C subjects, such as mathematics, are likely to be protected". Since mathematics is among the subjects that the government has said it will continue to fund, it's probably safe to assume that its T grant won't go down to zero. The Browne review had suggested that, in addition to S.T.E.M courses, "strategically important language courses" should also continue to receive T grant funding. I don't think it's yet known whether that will happen.
See the answer from Baroness Wilcox of Her Majesty's Department for Business, Innovation and Skills to the noble Lord Willis of Knaresborough's third question for a complete list of which subjects fall into which groups:
http://services.parliament.uk/hansard/Lords/ByDate/20101021/writtenanswers/part016.html
"Supporters of the Tory proposals, such as Mike Otsuka, have endlessly recycled the point that the existing system (and even more its predecessor) involves taxing (inter alia) less well off people who don't go to university in order to pay for better-off people who do."
Chris, would you please withdraw my name from this sentence? I have never pressed, much less endlessly recycled, this line of objection. I've never said that it's unfair for poor people (or even all people) who didn't go to university to pay for better off people who do. Rather I've said that the subsidy of advantages for the better off is a low priority, across the range of things on which government money could be spent. I would similarly object to various forms of corporate welfare that benefit better off people (e.g., agricultural subsidies). My objection in this case wouldn't rest on the claim that it's unfair for poor non-farmers to subsidize rich farmers (or that it's unfair for non-farmers to subsidize farmers). I agree that there would be something blinkered about that objection. Rather, my objection would be that such money is better spent elsewhere, such as meeting people's needs or funding public goods such as scientific research.
Chris Bertram is right that we have to look at the package. Inevitably the protests have been focussed on students having (eventually) to pay so much more, and on the off-putting effect of that on poorer would-be students. The Government’s supporters then have an answer to the protestors: they can point out that the new system of repayments is more progressive than the existing one, and that there is help specifically for the poorest. Chris says that no account is taken of likely repercussions for taxation of the new regime. Agreed. My point (implicitly!) was that there should in any case be input directly from taxation to the costs of higher education which even in arts, humanities and social sciences has a cultural/public/social benefit.(This is not to say that individual recipients don't benefit: I think they should contribute to costs. Nor is to deny that contributions should take account of differences in affordability.)
I see now that Mike Otsuka's position is more subtle than the one I've too quickly attributed to him. I wonder whether others have
clearly differentiated his position from the one I attributed to him? Since we have, as philosophers, an obligation to read one another's
claims carefully, then I'm happy to agree that I've been deficient in that duty.
Some information in support of one of the points Chris Bertram made at 02.17 AM (I note that the imputation of a view to Mike Otsuka has been withdrawn!):
I had lunch in a cafe yesterday where the only newspaper available to read was the *Daily Express*, a generally right-wing tabloid aimed at the lower middle classes. The editorial page was devoted to a vehement diatribe against the coalition's university policy, which argued (I use the term loosely) that it was a conspiracy between rich Tories (most of the current cabinet are rich) and Liberals to do down the 'squeezed middle' in favour of the rich and the poor. The denunciation was far more vehement than any reaction to Thursday's vote in the *Guardian*.
The Tories cannot (I think) hope to win elections if they alienate too many Express readers. This suggests to me that the Tories will eventually have to placate their anger, either by softening the current fees policy or (more likely) by offering them tax cuts that will be paid for by cutting (yet further) services largely used by the poor.
To Michael Otsuka,
Can you clarify 'funding public goods such as scientific research' in respect of the following:
1. what is the scope of 'scientific' here? (does it include economic research for example … or research in musicology?)
2. scientific research is conducted by diverse bodies – public, private and mixed – does funding scientific research count as a public good independent of whom is conducting the research and under what profit/non-profit criteria?
3. is funding scientific research a public good independent of the content of the research? e.g., defence/arms research?
4. is funding scientific research a public good independent of democratic accountability for such funding?
No doubt there are other aspects but these will do for the moment if I am to get a hang on just what it is that you are prioritizing over greater public funding for students.
Incidentally, I take it that in whichever sense you think that funding scientific research is a public good, you therefore also take it to be a public good that there are scientists to carry out this work – and hence would allow for subsidies if and when necessary to recruit and educate such scientists.
Jennifer,
I agree with you that the 'higher education … in the arts, humanities and social sciences has a cultural/public/social benefit', and that this justifies the support of such teaching out of general taxation. But I don't see why this support has to be 'input directly' through T grants for all subjects rather than less directly through loan subsidies. There is, for example, a tax-revenue-neutral change to the status quo that would keep fees at £3,300 per annum but make the repayment terms much more progressive via more generous loan write-offs that would be financed by the very same across-the-board £4,000 reduction in T grants for all subjects that the government will be introducing. Wouldn't you agree that such an across the board reduction in T grants to support more progressive write-off terms for the loans to cover the current £3,300 fees would be an improvement over the status quo, even though there would no longer be a direct subsidy of the teaching of the arts, humanities, and social sciences?
David Owen,
Here are some brief answers to your questions:
1. I'm more confident that I could make the case for support for medical research than musicology or philosophy, though I'm sympathetic to Ronald Dworkin's case, in A Matter of Principle, for the subsidy of the arts and humanities.
2. In partial answer to this question, I think a much stronger case can be made for funding scientific research that markets will fail to deliver than that markets will deliver.
3. No. Research for bad things like r & d for new methods or torture or weapons of mass destruction shouldn't be supported by the government.
4. No.
And I also agree with you that there can be a public goods case for 'subsidies if and when necessary to recruit and educate such scientists'. I would prefer a more progressive rather than a less progressive method of subsidy, and loan write-offs along Browne lines would be more progressive than lump sum grants.
Ian,
If by 'squeezed middle' the Daily Express means those in the lower middle class who earn the median income or somewhat above or below, these people will actually pay less under the government's new policy.
Jennifer,
I see now that the sums don't add up in the example I presented above. The sums add up if fees rise by £4,000 from £3,300 to £7,300, the T grant goes down by £4,000 across the board, and this T grant money is shifted to write offs of loans for these £7,300 fees so that the average debt burden is comparable to the current average debt burden for loans that cover £3,300 fees but the repayment terms are far more progressive. This change would be an improvement over the status quo, except for the fact that people would be mislead by the £7,300 sticker price, which is far higher than all but very high earners would end up paying. So it seems, then, that the case for direct support for teaching in the arts, humanities, and social sciences is simply down to the fact that people would overestimate the burden of the fee and loan repayment system that would provide a revenue-neutral replacement of such direct support.
It is important not to underestimate the capacity people (such as Ian's Express reader) have to form beliefs of a certain kind. Our typical lower-middle-class person will not undertake a careful accounting of which aspects of current government policy led him or her to feel "squeezed" and which were, on balance, neutral or positive in their effects. Instead, they will think of the cost of putting their children through university as a new burden that they will now have on top of taxation. And there will be plenty of newspaper columns (I'll happily take a bet on this) that will reinforce this point.
Mike:
You say: "These people will pay less under the government's new policy". But the most you are entitled to assert is: "These people will pay less if the government's new policy operates as proposed for the whole period, of up to thirty years, during which they are liable to repay the debt". One may reasonably doubt whether that condition will be met.
In any case, I was mainly concerned to report how the new policy is being portrayed in newspapers which few of us read. That portrayal will have political effects whether it is accurate or not.
Michael Otsuka,
1. 'So it seems, then, that the case for direct support for teaching in the arts, humanities, and social sciences is simply down to the fact that people would overestimate the burden of the fee and loan repayment system that would provide a revenue-neutral replacement of such direct support.'
Surely it is also about the perceived public message that lack of direct support is seen to send concerning these disciplines in the context of an entirely economistic view of education (the Brwone Report)and hence relates back to Chris Bertram's commodification objection. There is a basic philistinism that you would object to (given responses to my questions above) in viewing education in these terms. This was of course the point made eloquently by Stefan Collini in the LRB.
2. 'No. Research for bad things like r & d for new methods or torture or weapons of mass destruction shouldn't be supported by the government.'
Security (in a world like ours) is a public good too surely? Hence research into 'bad things' may be necessary to secure this public good. It looks like you are going a bit ideal theory again here?
There are reasons for researching weapons of mass destruction other than building them – and techniques in torture tend to be spin offs of other kinds of research (where they involve any) such as medical research (cf. Darius Rejali, Torture and Democracy, Princeton UP, 2010)
I've been trying to make the case that, once one studies the details, one will see that the government's policies are much better than the way they've been represented in the press and by critics. They are an improvement on the status quo in significant respects.
But I've come to see that the fact that the government's policies look much worse than they really are is a big problem in itself: (i) students who misperceive their debt burden will be deterred from going to university; (ii) those in the middle class who misperceive the costs will think this makes them worse off than it does, with bad political consequences; (iii) and (though this is a much smaller problem) university teachers will think the cutbacks to government support of teaching are much worse than they are.
I now think (i) and (ii) might provide sufficient grounds to oppose these policies.
But I think that if there's a case for opposing these policies, it's based on how they will be misperceived rather than how bad they are, misperceptions aside.
To turn to a different point:
I think the motivations of government ministers in pushing these policies through are relevant, because they're an indication of how these policies will be implemented on the ground and what further changes the government is likely to push in future years. I don't think a Collini-like textual analysis of the Browne report is all that helpful in discerning the motivations of government ministers, however. David Cameron, George Osborne, Vince Cable, and David Willetts will be making the decisions, not John Browne. They will not consult the Browne report in order to figure out what they're supposed to think. David Willett's speeches and interviews (though not his book The Pinch) provide a better guide to the thinking of government ministers than the Browne report. There is a lot that people will find objectionable in Willett's writings (his focus on student choice, competition, etc.). But Willetts is not the dreary philistine that people find Browne to be.
If Mike Otsuka/David Wallace are right, and their analysis of the IFS report accurate, then it is not the case that the government is withdrawing all subsidy for arts courses (rather it is replacing direct grants for loan-subsidy), nor is it the case that the (eventual) cost of an undergraduate degree is trebling (rather a more modest 50% rise, on average). In that case certain questions about the presentation of the policy arise.
(i) Why be stuck with a three-times as higher 'sticker price' (£3000-£9000) so that students fear that cost to them has trebled?
(ii) Why present this is a debt, rather than a limited post-education tax-take (or 'graduate contribution'), especially when it is known that there those from lower socio-economic classes are more adverse to debt?
(iii) Why couple a marginal (i.e. less than 50%) reduction in the subsidy for teaching at Universities to a complete marketisation of the system?
(v) Why allow the very rich to pay fees up front and hence avoids debt altogether? (so far no one has mentioned this group)
The answer to (iii) seems to be pure ideology: in this case the belief that markets drive up standards (maybe, but they also create winners, losers and stigmatism). There may be no reasons behind (i) and (ii) other than bad PR on the case of the government; bad PR that it is now left to the Universities most under treat to overcome. (It is especially bad PR to rush the vote through so that there was no time for proper debate of the figures. If the IFS report is generally supportive of the proposals, why not allow time to digest it?)
The interesting wider issue here is how pragmatic our politics should be: how much should policy be swayed by tendancies that are recognised as irrational (such as the tendancy of some people to believe the cost of their higher-education has trebled overnight, or of others to be averse of the £27,000 tuition 'debt')?
Anonymous,
Re (i) and (ii), I believe that one reason why they went with loans for fees rather than a graduate tax is that the introduction of a graduate tax would have been much harder to manage while making cuts across all non-ring-fenced departments in order to meet their self-imposed (and I think misguided) budget deficit reduction target. See point #10 ('High upfront cost') of the Russell Group's brief against the graduate tax:
http://www.russellgroup.ac.uk/russell-group-latest-news/121-2010/4317-objections-to-a-graduate-tax/
A graduate tax would also have made it harder for the government to channel money to elite universities, which I think is another aim of the government.
I say more about both things here:
The government was probably also sympathetic to various other objections to a graduate tax contained in the Russell Group brief.
And once, for these reasons, a graduate tax is off the table and one sticks with fees and loans, the sticker price has to be high in order to allow for significant loan write-offs. The latter was needed to make the actual (as opposed to the perceived) repayment terms not too burdensome to those who could least afford to repay. The actual repayment burden had to be made more progressive in this way in order for the government to try to make viable a significant increase in the overall actual student contribution in order to plug the hole in funding that it created through a slashing of the T grant.
Because of the high sticker price problem they created, whether the government actually succeeded in making this viable remains to be seen.
Ad Anonymous:
There is a substantial answer to your question (ii). There are many EU but non-UK students in the UK universities. Repayment of a debt to the British Government is enforceable throughout the EU, but if the students leave the UK on graduation they are not liable to UK taxation. EU law precludes treating students from different member states differently. So, from a legal point of view, all participants in the fee loan scheme have to be debtors, even though the repayments will take the form of a higher tax-rate for those who work in the UK.
One worry about the scheme is that we may end up with the bad consequences of both conceptions of the obligation. Because it is, legally, a debt, the debt-averse will be deterred. But because it leads, functionally, to a higher tax-rate, there will be strong pressure from those paying it to reduce tax-rates more generally.
As to your question (v), a clue to the answer may lie in the social composition of the current cabinet.
Michael Otsuka
'But I've come to see that the fact that the government's policies look much worse than they really are is a big problem in itself: (i) students who misperceive their debt burden will be deterred from going to university; (ii) those in the middle class who misperceive the costs will think this makes them worse off than it does, with bad political consequences; (iii) and (though this is a much smaller problem) university teachers will think the cutbacks to government support of teaching are much worse than they are.
I now think (i) and (ii) might provide sufficient grounds to oppose these policies.'
Great, happy to see realism here) – but then you say:
'But I think that if there's a case for opposing these policies, it's based on how they will be misperceived rather than how bad they are, misperceptions aside.'
But note that the justice-based and non-justice-based 'commodifications' objections (which David Wallace takes to be the most interesting objections of the prior thread) have not been dealt with as far as I can tell.
There is also, given EU law on non-discrimination mentioned by Ian Rumfitt above, a further issue that might be reasonably raised by students, namely the comparative situation of students across the EU – just as, in any realistic approach to justice, the poor, unemployed and disabled who are also currently being (or about to be)screwed by the Coalition, might also make a case based on comparative grounds within the EU. In gneral, I think that comparative studies are a useful aprroach when thinking about justice in the actual world.
David Owen,
I wrote: "But I think that if there's a case for opposing these policies, it's based on how they will be misperceived rather than how bad they are, misperceptions aside."
You replied: "But note that the justice-based and non-justice-based 'commodifications' objections (which David Wallace takes to be the most interesting objections of the prior thread) have not been dealt with as far as I can tell."
My rejoinder:
I think the problems of commodification that people have raised would not arise to any significant degree if students accurately perceived the cost of going to university under the new loan repayment and write-off terms as compared with the current ones. They would see that it would not make sense, for example, for them to think that they had better study business or law rather than geography because they could not afford to pay off their loans under the new system on the salary of a school teacher. They would also realize that, given the repayment and write-off terms of the loans, the difference between a £6,000 sticker price and a £9,000 sticker price shouldn't affect their choice of university unless considerations were otherwise very evenly balanced. Realizing that students would realize this, universities would all charge a maximum £9,000 fee in this highly regulated and subsidized market, thereby eliminating competition through price differentiation. Students would also not think they're being as shortchanged in the quality of teaching they're receiving on account of the price they're paying if they realized how much they're really paying.
This thread has been terrific and I've enjoyed the debate, although I wondered what readers thought about a few points that may not have been addressed yet:
1. Students will pay from £6,000 to £9,000 per year from 2012. In terms of additional services and facilities, what do readers think our universities might offer students in the first year class of 2012 for their much higher fees? It may be that their will be longterm benefits, but what will the first cohort of students receive extra for paying 2x to 3x as much as students today?
2. The current proposals were originally sold as opening a free market in fees, but the truth is anything but. One reason is that the fees have been capped (as discussed in most of the thread). A second reason has not been raised: there are plans for an almighty new super quango that is thought to be more intrusive in university affairs than ever before. If universities gained in independence in relation to financial independence, then this might be a good thing for many — but this new financial arrangement may involve far more strings attached than ever before. Is this a reason for real concern?
3. Students today have on average less debt than they would have under the new scheme. One alleged benefit of the new scheme is that any student debt still held by a graduate would be cancelled after 30 years, and therefore it is expected that the actual amount of debt that students might pay will be less than feared as a not insignificant number might not pay off their full debts in 30 years. While I suppose this is better than nothing, is it a bit worrying that many graduates are expected to be hit by debt burdens they will not be expected to pay off during their careers? This might cause real problems re: stress regarding one's financial affairs.
Finally, in response to a reader above, it is certainly true that Labour introduced fees — of £1,000 per year — and that this rose to about £3,200. While I believe a free system is best, I'm not strongly opposed to a modest contribution.
*However*, I have grave concerns about new policies concerning the funding and governance of higher education being rushed through off the cuff. We've only just seen the Browne Report in mid-October and the government has been tweaking its policies it seems almost daily without any thorough review of the particular legislation they have supported and plan to support in Parliament. This seems to me a very irresponsible way to determine public policy, whatever the merits of the plans on offer.
Vince Cable, a Liberal Democrat and Business Secretary, recommended to the House the legislation raising tuition fees. His party has enjoyed dramatically less support — cut from 24% to just 4% in the North East, for example — with details here:
http://www.ipsos-mori.com/newsevents/latestnews/605/Liberal-Democrat-support-dropping-dramatically-in-some-regions.aspx
A couple of further thoughts:
– on misperception: I'm guardedly optimistic that it will be possible to get across to potential applicants how the tuition fee framework actually works in practice, in a way that's accurate but less off-putting.
"The cost of your degree is partly covered by a higher effective tax rate for university leavers: you'll pay another 9% income tax on your income above £21,000. This extra effective tax is limited, in the sense that you stop paying it after 30 years or after the cost of your degree is paid for. (The government subsidises part of the cost of very expensive degrees like physics or medicine, so that you'll pay the same amount of effective tax as if you did a Humanities degree.) Some universities have more expensive degree courses than others, so if you go to one of those universities, you'll be paying the 9% for longer (though still for a maximum of 30 years)."
At the moment, of course, the headlines are full of somewhat misleading descriptions, and the signal-to-noise ratio is low, but this will probably change. (As far as I understand, the previous tuition fee, which generated similar (though less dramatic) objections, has been understood by applicants fairly well and hasn't been off-putting for applicants from poor families.)
I actually think it was a serious PR mistake by the previous goverment not to coin some better name for the proposal ("delineated graduate contribution" or somesuch).
– on commodification/marketisation: I'm still struggling to understand exactly what the worry is, and I'd welcome clarification from people concerned by it. Under the current system, it's already true that (i) universities get a certain amount of money per student; (ii) all of that payment usually comes up-front from the government, with the student partly reimbursing the student in arrears; (iii) insofar as a university can't fill its places, it's financially penalised. In trying to understand what the change in kind is here from the previous framework, I can see only one aspect: the amount received per student is expected to vary somewhat between universities, in a way which can happen in principle under the current scheme but doesn't happen in practice. Is that what's worrying people, or is there something else I'm not appreciating? (Hopefully I don't need to say this, but just in case: this is a genuine question, not a rhetorical point.)
To Thom:
D'accord. Whether one agrees with the thrust of the Government's policy or not, the past two months have seen very poor public policy making. Last Thursday's vote was a case in point. The motion before the HoC was a proposal to alter two figures in the Higher Education Act 2004. But the relevant parts of that Act are to be superseded by a new HE Bill, to be laid before Parliament in February or March. So the significance of what Parliament decided last week is, for the moment, indeterminate in crucial respects (especially in regard to the tests universities will need to pass to be able to charge more than £6000 p.a.). The demands of coalition politicking have been allowed to trump those of sensible policy-making.
Insofar as one can interpret the noises emanating from Whitehall about the new Bill, I also agree that the Government seems to be retreating from Browne's free market and intense competition between universities. I do not know what is driving that retreat, but everyone working in British universities over the age of 30 (not to mention retired academics) should welcome it. The reason concerns the legal structure of the Universities' Superannuation Scheme — the pension scheme to which academics in the old (pre-1992) universities belong. This was set up in the 1970s as a 'last man standing' scheme: the universities who formed it undertook that the survivors would make good the shortfall if one or more of the member institutions went bankrupt. Actuaries calculate that if as few as three of the pre-1992s were to fail, the levies on the survivors would be so great as to threaten them: the Trustees would then be obliged to wind the scheme up. Since the USS is in deficit (on some calculations, its future commitments outrun its assets by £7 billion), this outcome would be very bad news for all retirees and for all current employees with substantial deferred benefits.
Shameless self promotion coming up, but I'm a Cambridge PhD (in Intellectual History) and was at the riots/protest on Thursday. Here are two short takes:
http://badconscience.com/2010/12/13/reflections-on-a-kettle/
A final note from me to express regret for what I now see was the inappropriately obnoxious tone of my initial post on the prior thread.
The debate has been interesting…and I remain worried about commodification in terms of the message that headline tuition fees send to the wider public.
Ian raises several excellent points! We are told that fees may rise, but do not yet know the strings that will be tied to this rise. He also is quite right to note concerns over the future of the USS, the pensions plan that many of us in pre-1992 buildings (including the "Russell Group" & co.) belong.
There is much change afoot in British higher education, and the fear is that the result may do far more harm than good.
The Government certainly has an uphill struggle on its hands if it is to persuade people that university has not become more expensive. From p.35 of today's London *Times*:
John Kerr, managing partner for talent at Deloitte, said [in explaining their new policy of recruiting more school leavers]: "The expectation is there could be some people who will now look twice at whether they want to go to university or not. We don't want to exclude anyone from the talent pool just because they decide it is too expensive to go to university".
Deloitte, I need hardly add, is a firm of accountants.
I have found Mike Otsuka’s posts very helpful and constructive. The following claim though may be questioned, ‘[Students] would also realize that, given the repayment and write-off terms of the loans, the difference between a £6,000 sticker price and a £9,000 sticker price shouldn't affect their choice of university unless considerations were otherwise very evenly balanced. Realizing that students would realize this, universities would all charge a maximum £9,000 fee in this highly regulated and subsidized market, thereby eliminating competition through price differentiation.’
This claim has important implications for students and for university finance. Let us explore it.
Clearly students who anticipate being on a low income for the thirty years after graduation should not be put off by the fees, nor care whether they are charged £6000 or £9000, because they will not be paying much of their loan back anyway. But what about others – who form the large majority? Here it is essential to look at some figures. Consider two sets of students.
Those taking a maintenance loan for 3 years (total ~ £10,000) plus 3 years’ fees at £6,000 will have a loan of ~ £28,000.
Those taking a maintenance loan for 3 years (total ~ £10,000) plus 3 years’ fees at £9,000 will have a loan of ~ £37,000.
Let us leave to one side interest payments, as they would make the calculation too complex.
Take someone who upon graduation earns an average of £40,000pa until the loan is repaid, and always above £21,000pa. According to Page 41 of the Browne report he pays an average of £143 per month. It will take him just over 16.3 years to repay £28,000 and 21.6 years to repay £37,000 (in practice a bit longer once you take interest payments into account). He is not rich, but has to repay the whole loan – and paying off the loan takes much longer with the larger loan.
Consider now someone who upon graduation earns an average of £35,000pa until the loan is repaid, and always above £21,000pa. I calculate that he pays an average of £105.8 per month. It will take him just over 22 years to repay £28,000 and 29.1 years to repay £37,000 (in practice a bit longer once you take interest payments into account). This student too is likely to much prefer the smaller loan to the larger.
Finally consider someone who upon graduation earns an average of £30,000pa until the loan is repaid, and always above £21,000pa. According to Page 41 of the Browne report he pays an average of £68 per month. It will take him over 34.3 years to repay £28,000 – so he will never finish repaying his debt. So for him it makes no difference whether he borrows £28,000 or £37,000. Though when it comes to the question of whether to go to university or not, the thought of being on slightly more than average income yet having to repay £68 a month for 30 years must be discouraging.
So the conclusion is, any student who *anticipates* his earnings after graduation to be over £21,000 and to average £35,000 or more for the duration of the time it takes to pay off his loan, and who is not and/or does not expect to be rich, will be sensitive to the difference in price between a £6000 course and a £9000 course. I expect a large majority of students to fall into this category.
Of course price will just be one factor in a student’s decision regarding which course to take, but it may play a significant role. Furthermore, bear in mind that markets always work on margins. If a university wants a given course X to have a full complement of 40 students, then it has to charge what the 40th students is prepared to pay. (Sometimes overall income may be higher if the university charges more and does not have a full course, but it is bound to need a fairly high take up). This indicates that it is likely that at least some, and perhaps many, universities will need to charge less than £9,000 in order to attract sufficient students.
This isn't a disagreement with Dan Dennis's basic point, but I think it's worth flagging that interest, and shifts in salary over lifetime, do push up his numbers quite a bit. Here's a crude model, assuming real interest at 3% (i.e. not figuring in the interest-rate discount for low-income graduates):
– if a graduate's income is constant over the 30-year period, they need to be earning about £36,000 or more in order to pay off their loan in 30 years if they pay £6,000 p/a fees; they need to be earning about £41,000 or more in order to pay off their loan in 30 years if they pay £9,000 p/a fees.
– A student earning £39,000 would make repayments for 25 years if at a £6,000 p/a school, for 30 years if at a £9,000 p/a school.
– A student earning £42,000 would make repayments for 20 years if at a £6,000 p/a school, for 30 years if at a £9,000 p/a school.
Allowing for the fact that salaries tend to increase over time kicks these numbers up a bit (by about £3,000-£4,000 on average, for instance, if we model the increase as linear, though the calculations are messier than that single number implies.)
Dan,
Those are interesting calculations. But I don't think one should ignore the interest rate, nor do I think one should rely on the Browne report numbers. This is because the interest rate tapers in between £21,000 and £41,000 under the government's proposal, whereas it's flat throughout under the Browne proposal. As a result, people in the middle income earning deciles (relative to other university graduates) are somewhat better off, and those in the higher deciles are somewhat worse off, under the government's proposal than under Browne.
Unfortunately, the IFS analysis of the government's proposal doesn't provide any figures on debt repayment for someone who would be charged a fee of £6,000, but it provides a fair amount of information regarding the debt burden of someone charged a fee of £7,500 and a bit information regarding the debt burden of someone charged a fee of £9,000 per year.
According to the IFS, the first five deciles of university graduates would have exactly the same lifetime debt repayment for a £7,500 versus a £9,000 fee, as they'll all have at least some of their debt written off under either fee. The differences in debt burden above that level aren't likely to be very significant, given that the IFS calculates that the average lifetime debt repayment of a £7,500 versus a £9,000 fee (plus maintenance) are pretty comparable: £25,020 versus £27,200.
So I think that what I said applies to a choice between a fee of £7,500 and £9,000: namely, that given the repayment and write-off terms of the loans, the difference between a £7,500 sticker price and a £9,000 sticker price shouldn't affect their choice of university unless considerations are otherwise very evenly balanced.
There will, moreover, be some fairly strong incentives for universities to charge at least £7,500. £7,000 is roughly the point at which universities recoup in fees what they lose in the T grant. But those that charge over £6,000 will need to generate some extra income in order to fund scholarships for students from poorer households. University administrators will also be looking for extra income to compensate for the erosion of their research money by inflation and the rise in their expenses caused by the rise in VAT. To avoid having to make cutbacks, they'll probably need to charge at least £7,500.
So even if you're right about £6,000 versus £9,000, university administrators won't want to charge less than £7,500 and, once they charge that much, they might as well charge £9,000, since the lower figure won't give them any competitive advantage.
(Everything I say above assumes that students are perceiving their debt burden accurately.)
One significant reason that higher fees could deter students is the prospect that owing education debt will reduce the amount that lenders will lend them for home mortgages. Maybe being able to borrow £9000 less for a mortgage or other loan does not make too much difference (or even £18000 for a couple), but I'm no expert on what the reaction will be by lenders to high student loans: for all I know, carrying that extra amount of debt could make the difference between being credit-worthy and being refused a mortgage in a non-trivial range of cases.
Mike:
"University administrators might as well charge £9000".
But will they be allowed to? Statement by Standard and Poor's, 13 December: "As regards the UK sovereign rating, we wouldn't place an important distinction on the difference between borrowing to finance student loans and borrowing to finance grant payments to universities".
If this view is widely shared in the bond market, then the Treasury will insist that the HE Bill is framed in such a way that fees of £9000 p.a. really are (as Cable likes to say) "exceptional".
Daniel,
But see David Wallace on the other thread re the difference that £9,000 fees under the new system would make, compared with £3,300 under current repayment terms, to mortgages.
Ian,
From what I've read, the pace and extent of the overall government cutbacks across departments are overkill insofar as maintaining the UK's high sovereign rating is concerned. (But maybe the Treasury actually thinks it really needs to cut so much to keep its sovereign rating high, in which case they may insist on this.)
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