News and views about philosophy, the academic profession, academic freedom, intellectual culture, and other topics. The world’s most popular philosophy blog, since 2003.
I teach both large courses, like Jurisprudence and Critical Legal Thinking (a.k.a Legal Argumentation), and small seminar-based courses at Edinburgh…
Surely there is an answer to the problem of AI cheating which averts the existential threat. . It’s not great,…
I’d like to pose a question. Let’s be pessimistic for the moment, and assume AI *does* destroy the university, at…
Hear hear
I agree with all of this. The threat is really that stark. The only solution is indeed in-class essay exams,…
I’m not sure I’d yet go so far as to call LLMs an existential threat to universities. But I do…
My big problem with LLMs at the present time, apart from being potentially the epitome of Foucault’s panopticon & Big…
So with over 1100 votes cast, here's how things are breaking down: 53% think it a "terrible" idea (the negative vote), while only 21% deem it a "wonderful" development (the positive vote); 27% are neither positive nor negative, and await more information. That's overall, but broken down by region, the differences are striking:
American British Other
Positive 11% 6% 4%
No opinion 17% 3% 7%
Negative 13% 24% 16%
Thoughts from readers? Signed comments will be very strongly preferred.
The way I read these results: Americans have no direct experience of the way that part privatization of a publicly provided good leads to the degradation of the system and in particular to a dramatic lowering of the quality of the public system. Americans therefore have a hard time understanding what is at stake here.
Speaking as a Canadian, I know it is a common fear that when the government allows a private enterprise to spring up and offer services that were once offered by the government alone, what's at hand is a "thin edge of the wedge" scenario. In many cases, the fear is supported by the fact that such private "innovation" arrives after the public option has already been partially gutted, so that everyone involved can claim that the private option is necessary given the inefficiency/ineffectiveness of public services and the lack of available funds (since raising taxes is of course not an option). I suspect that a similar pattern of the slow crumbling of public and social services has been at work in many countries with more a more robust system of such services than the US, and since we know what we have to lose and have seen the death by a thousand cuts creep closer and closer, this kind of development is all the more alarming.
Full disclosure: that is precisely my attitude. If I had any faith that my government indulged in experiments with "public-private partnerships" or other such nonsense out of a good-faith interest in seeing whether they work, then I might not be as worried, but I'm far too cynical to believe that.
Part of the explanation of greater American support has to do with the greater exposure to, tolerance of, and endorsement of, the practice, on which NCH models itself, of charging a high sticker price tuition fee while also providing significant need-based discounts and other forms of financial aid. See, for example, this (UK-based) American academic's defence of NCH:
http://www.guardian.co.uk/commentisfree/2011/jun/07/give-grayling-new-college-humanities-chance
But another part of the explanation has to do with the fact that people in Britain have being exposed to many more of the details. See, for example, the same American academic's fairly dramatic change of attitude once she learned more about the nature of this enterprise:
http://sarahchurchwell.blogspot.com/2011/06/further-information-on-nch.html
The for-profit nature of this enterprise is, I think, one that many American academics would oppose once they examined the details. Even though I'm much more sympathetic than many of my British colleagues to the American model of high fees combined with high financial aid and its British variant involving high fees and loan write-offs, I have a number of questions about the for-profit nature of this enterprise.
I've listened to Anthony Grayling's Guardian interview in which he explains why he has set the college up as a for-profit corporation rather than a non-profit charity. I find myself unpersuaded by his defence. Basically, it comes down to the fact that it would have taken more time to raise the necessary funds for a non-profit college. But what is the fierce urgency of setting up this college now as opposed, say, to five years from now? It's not as if Oxbridge tutorial-based humanities teaching, on which NCH models itself, is on the verge of imploding, and a New College is urgently needed for those refugees from the ancient cloisters who will no longer be able to find one-on-one tuition, as swathes of humanities teaching is eliminated there. Rather, Oxbridge humanities teaching will have a somewhat more secure financial base once the £9,000 fees are introduced.
There are, however, a number of reasons to be extremely wary of the for-profit model.
Grayling, Peter Singer, and others defend NCH by pointing to its aspiration to provide generous financial support to students via a charity that has been set up alongside the for-profit college, and into which people are meant to donate. Let's be clear about how this charity would work. It would help to cover the high fees of those who can't afford to pay the full £18,000. For those on need-based scholarships, a portion of their high fees will be paid by the charity. Why are these fees as high as they are? Part of the reason they need to be as high as they are is in order to convince investors that they will receive a decent return on their investment, where, among other things, this will take the form of profits surplus to the cost of teaching the students and otherwise running the college that are divided among the shareholders.
Won't it serve to dampen the philanthropic motivation to donate to this charity, once this becomes clear? It's one thing to ask people to donate into a charity that covers just the cost of teaching students and running a university or college. But it's another thing to ask people to donate into a charity that cover fees that help to generate profits to be divided among wealthy shareholders as well. What sensible philanthropic motivation might a person have to do the latter? And if there is insufficient motivation for people to donate into this charity, the college will be a preserve for the rich, with just a fig leaf of financial assistance to give it the appearance of respectability.
I admit that, when the 'costs' of running even a not-for-profit university include very high salaries to senior managers and star academics, a sensible donors might wonder whether they too are in need of their philanthropy. And if they can nevertheless be moved to donate to help cover their high salaries, perhaps they can be moved to donate to help generate dividends to wealthy shareholders…
…especially if, as is currently the case, a third of the shares are held by the professoriate, at least one of whom (Peter Singer) has said that most of what he earns will be donated to organizations such as Oxfam. If the other members of the professoriate were to follow Singer’s lead, that would serve to deflect some of the criticism NCH has received. It would be an especially effective response if they were to jointly pledge to donate all of their earnings from dividends back to the charity.
Even if, however, the professoriate were to agree to do this, the following structural problem would remain: two-thirds of the shares are held by other private investors. Grayling reports that he was unable to raise the money to start a non-profit college out of philanthropic donations. Since he needed instead to find investors who weren’t simply willing to give away their money, presumably they are expecting some sort of monetary return on their investment. What is to stop them from exercising their control via majority ownership of this enterprise by insisting on the cutting of costs in order to increase the returns on their financial investments? Or from selling on their shares to others who will insist on cutting costs to increase profits?
Might sensible philanthropists be reluctant to donate to an organization that is vulnerable, by the very nature of its constitution, to being transformed into something much more like the sort of for-profit college or university with which we’re familiar and which Grayling himself regards as beyond the pale?
Perhaps, like Peter Singer, they would instead opt to donate to a more reliably worthy cause such as Oxfam rather than to the charity that Grayling has set up.
Any American who has witnessed a K-12 public school system struggling against an onslaught of voucher and charter schools is familiar with the situation Neil described. But since this is still not a widespread phenomenon, maybe many Americans have a hard time understanding this one too.
I entirely agree with both the above commenters. As a Canadian who has apparently settled permanently in the US, I often feel like Americans don't understand what's at stake in allowing private enterprise to infest and infect the growing cracks in a public system, partly because they really can't imagine what a functional public system is like.
My sense is that attitudes are being shaped by a mix of six things, which might usefully be disentangled: (a) attitudes to the diversity of the sector and the thought that this improves this; (b) attitudes to the commodification of higher education; (c) fears that this will make HE more socially divisive;(d) claims that this is the only way to preserve humanities education in the UK; (e) claims that this provides better career options for academics; (f) attitudes to this specific initiative and the individuals associated with it.
I'm in favour of a more diverse sector, but this initiative fails for me on every other heading, either because it is likely to be harmful or because the various positive claims have zero credibility. Incidentally, I think it is likely to fail for two reasons (1) because the finances won't work and (2) because it is already the object of widespread and justified ridicule. People will pay to go to an institution with a good external reputation, even if the quality of the education isn't that good. People won't pay (that much) to attend one that is widely laughed at. Unless Grayling can change attitudes substantially, he's sunk.
Here's a question for UK-based readers: for years, the UK has had an elite, high-tuition sector of private education prior to university–the 'Eton' phenomenon, as it were. That has co-existed with state-supported schools. Has it undermined the state-supported schools? Why does not this experience temper views of the Grayling initiative, which seems to replicate at the university-level what Britain has lone seen at the pre-university level? What are the pertinent differences?
One of the ways in which the private colleges and universities in the US help the public systems is by setting standards. In a fully public system there are no easy measures of the quality of the system or of the best units. With Stanford right next to Berkeley that is not the case in the US. (Indeed, it was once said that former Governor Reagan had a hard time decades ago disciplining the UC system because voters were sensitive to cuts proposed.)
So having viable private universities can help the public system.
This comment does not address a number of the critical comments made of the new initiative.
C
Trust me, as someone who's lived in the UK all their life (I'm now a grad student there) and knows it well, people who are strongly opposed to this new institution will seldom be big fans of the UK public (as in elite private) schools, and their role in the education system. In fact, those schools are widely despised for the fact that they are seen as a way for members of the traditional elite to a) get ahead educationally and b)(more importantly) do the kind of networking that is, if not exactly necessary, then certainly very helpful for getting top jobs in the civil service, the law and so on.
Of course, a disproportionate number of people at the top of academia in the UK no doubt also went to these schools. And many others went to lesser private schools and therefore feel uncomfortable criticizing the public schools on grounds of principle. But nonetheless I expect that opposition to the NHC and disapproval of the public schools like Eton are probably quite well correlated.
There is something very weird about the idea that Americans have no experience with "the way that part privatization of a publicly provided good leads to the degradation of the system and in particular to a dramatic lowering of the quality of the public system", or that "Americans don't understand what's at stake in allowing private enterprise to infest and infect the growing cracks in a public system, partly because they really can't imagine what a functional public system is like."
We *have* a functional public system of higher education in America. Were Rebecca Kukla and Neil suggesting otherwise? It is precisely in higher education in America that a mix of private and public seems to be working pretty well, without 'degradation' of the public contribution.
I won't state my own view, since it is pretty much exactly the same as Mike Otsuka's.
@Jamie Dreier: I believe that the private university system predates the public university system in the United States, and hence the analogy doesn't hold. The whole point was about noting what happens when the *response* to cuts in a formerly functional public system is to open the door to privatization and two-tiered system.
I think I have a view between Prof's Kukla and Dreier. I don't understand how anyone can say that the US public higher education system of the 1960s, 70s, and 80s was not "functional". (Of course public education was nearly unique in being a functional public system.) It was a system that delivered high quality, very low cost education to millions. For example, in the mid 70s, I went to Ohio State where I studied first music, then math, then philosophy. I received first-rate education in all three. When I started tuition was $500 per quarter, something that was well within the reach of any American. (Jobs at $3.50 an hour were readily available around campus, so tuition amounted to 150 hours work per quarter at student rates.)
But I disagree with Prof. Dreier that we currently have a functional system. First, the massive cuts in state funding that began under Reagan have placed public school tuition out of reach for many. Second, the system is currently under massive attack, and is suffering. Since I see no serious or coordinated movement to protect education as a right of citizens, I am not at all confident that the system will survive in anything like it's current form.
What role the existence of private education plays in this is much harder to assess. Certainly the existence of elite private schools removes any selfish incentive for the rich to care about the dismantling of public universities. On the other hand, there is enough of a tradition of liberal education in most such institutions, that students may come out more willing to consider the value of education than they went in. But for all that, I suspect that where we are headed is technical training for the poor and elite education for the rich.
I don't disagree with anything in Mark's post, so I take his view to be a friendly accompaniment to mine, not one in between mine and Jamie's. My point wasn't that the US public system wasn't functional. It was that it co-existed with the private system from the start, so I didn't think Jamie's analogy held.
In response to Brian's "question for UK-based readers", the difference is surely that Eton provides a high-quality education. I have, as yet, seen no solid evidence to suggest that this place will. I certainly hope so: but who knows? There are colossal risks involved here, and it'll be the students who suffer if things go wrong.
And I would strongly take issue with the title of this thread: this is not a University that we're talking about. It's not even a University College. This is just a crammer, training people up to take exams through the University of London's International Programme, exams that they could have taken anyway as private individuals. But potential applicants are being seduced by the headline-grabbing professorial dream-team, which, notwithstanding the prominence it gets in their publicity, effectively boils down to a mere programme of visiting speakers, delivering a handful of lectures each year. All of the real teaching here — i.e. those much trumpeted individual tutorials — is going to be getting done by junior staff, people whose identities have yet to be announced (presumably because their services have yet to be enlisted), and consequently whose competence is impossible to assess.
BL COMMENT: It seems correct that a lot of details are still not known, but that means some of the strong negative statements are equally unwarranted.
Since comments aren't open on Prof Ruse's defence of the New College can I just point out that his views of the state of uk higher education are 50 years out of date. We do allow – indeed encourage – students to take modules across a range of subjects (yes we too have electives) and we do assess them continuously over three years. And we are making efforts to 'widen participation', something this initiative will set back.
I don't know the evidence that Eton provides a high quality education. It does spend a stunning amount per pupil, and outcompetes the public sector for teaching talent, sure. But the educational value added — I haven't seen anyone quantify that (as opposed to the positional networking value, which is what justifies the fees). Yes, Eton and the other elite privates do, in fact, undermine the public sector, by siphoning off the political support of the most politically powerful people, depressing willingness of high-end taxpayers to pay taxes, and outcompeting for teaching talent. (And yet, occasionally, as per Chris Morris's comment, they do very good things that make for good change in the public sector, viz Anthony Seldon's various innovations, but he's, let's say, unusual). For CB's reasons I don't think that this new venture will do that for higher ed, because it is hobbled in various ways from the start, UNLESS it can really tap the foreign student market somehow (a lot of junior years abroad, perhaps).
Rebecca, you said that Americans cannot imagine how a functional public system works. I figured that must mean that the system we actually have is not functional.
Mark Lance, the price of public higher ed in the US is certainly much higher than it has been in the past, but it is still *vastly* more accessible in the United States than it is in Britain. (You may have a point if your comparison is France.)
"Vastly more accessible in the United States than it is in Britain?" According to the discussion here, tuition in Britain is 8-9000 pounds. That's about $13,000 – 14,500. In-state tuition in the US typically ranges from about $9000 – $13000. (Often double for out of state, whereas British citizens can go to any university for the same fees.) And that is after the massive increases of the last 5 years in Britain. But we can surely agree that both systems are quickly moving out of the reach of large sectors of the population, which was my point. (Note that I made no comparative judgments between the US and other countries in my post, so it is hard to see why the choice of France over Britain would be required for me to "have a point".)
It is difficult for a philosopher not to notice that 9 out of 10 of the best philosophy departments in the world are in the US (if a well-known report into these matters is to be believed). To that extent the US has a 'functional' higher education system. However there is a strong relationship between ability to pay and quality of education in the US. The relationship is weaker in the UK; to the extent it exists, it precisely because of the fact to which Brian calls our attention – the existence of the 'public' (ie private) school system. The students from these schools take a disproportionate number of university places, especially at the most prestigious universities. Grayling Hall is a venture that risks helping to produce a similar kind of disparity in the UK higher education system.
I was overly hasty when I said I agreed *entirely* with Mark, I guess, Jamie. I don't believe the US has ever had a 'functional public system' for higher education. What it has had – and is having less and less, it seems – is specific functional public universities within that system. (I took it that was the spirit of Mark's comment, perhaps unfairly.) For every Berkeley or University of Michigan there are approximately a googol degree mills with overstuffed classes, overworked teachers, and hopelessly underprepared students. Even there, a really smart student can get a good education – hell, a really smart student can do almost anything. But my impression is that the 'system' as a whole, if there is such a thing, is not especially functional. I've taught, over the course of two decades, at three public universities, and they were each very far indeed from functional. The most recent one was so crippled by cuts, top-down constraints, and tuition limits that it was barely managing at all. And those were all PhD-granting institutions and hence presumably well above the norm. In contrast, I went to a public Canadian university for undergrad and taught at one for several years. Both were, in comparison, exceptionally functional – even though the place I taught has the nickname 'last chance U' in Canada.
I'd also reject Jamie's claim that "the price of public higher ed in the US … is still *vastly* more accessible in the United States than it is in Britain,"
At the moment, tuition fees in England are £3300 = $5350. In 2012, they'll be going up to as high as £9,000 = $14,500.
Even if the £9,000 fees are somewhat higher than tuition at comparable US state universities, the repayment terms ensure that these fees are affordable even if one is penniless when one enters university and earns hardly anything afterwards:
Any UK/EU student who takes up a place in a university in England automatically qualifies for a subsidized loan that covers the entire tuition fee (plus living expenses). This loan is repayable as 9% of one's income above a threshold (£15,000 at the moment, and £21,000 when the £9,000 feees are introduced, with indexing of the threshold for inflation in later years). It is repayable for only a fixed number of years (25 years at present, 30 years under the higher fees). Any amount of the loan not paid back after those number of years is written off. Interest on the loan for the £9,000 fees will be inflation plus 0%-3%, depending on how high one's income is.
I believe widespread concerns about NCH largely rest on the fear that a principle has been abandoned. Higher education has long been considered a public good. Those who qualify could attend — and for free and often with free maintenance grants. This was higher education in Britain until about 15 years ago when university fees were introduced. Fees have helped open the door to politicians arguing that higher education is no more than a private good.
It is certainly true that some secondary schools may charge far more than many universities. Perhaps this is reason to believe that some parents could afford much higher fees for their children's university education. Either way, the 100% cut to the teaching grant for arts, humanities, and social sciences is quite a shift from 100% funding with free grants until only about 15 years ago. This sea change from higher education as a public good to a private good is what I suspect is of concern to most.
This should also be seen in the following context: the government has permitted higher fees to make up the short fall in the teaching grant cut. This grant is getting cut because we live in an age of "austerity" and we are told we must act now to avoid dumping debt upon the next generation. However, the new fees are likely to increase the debts on the next generation substantially and over a longer period of time. Read: higher education policy is in a real mess generally.
When he mentions in passing the incipient 'British model' of high fees and subsidized loans, Mike Otsuka raises an issue of far wider concern than the fate of the new college in Bloomsbury.
Mike is right that the promise of generous loan subsidies was vital in persuading Parliament (in particular, Liberal Democrat MPs) to raise the fee cap to £9000 p.a. last December. But one may reasonably doubt whether the Conservative party intends to maintain those subsidies even in the medium term. Connoisseurs of legislative sneakiness have noticed that the 2011 Education Bill, which mainly concerns schools, and whose sponsoring Secretary of State is a Tory, contains clauses (irrelevant to the main thrust of the Bill) that allow the Government to set the interest rates on student loans up to, and in some cases exceeding, commercial rates. Crucially, it also makes the setting of the interest rate an 'administrative' matter; once the Bill is enacted, no further parliamentary votes will be needed to determine what the rate will be.
Another significant recent development is that control over the contents of the forthcoming Higher Education White Paper has been wrested from the sponsoring department (that of Business, Innovation and Skills) and given to the Policy Unit at Number 10. One hears that they are taking a 'fresh look' at the whole issue; hence last Friday's higher education 'summit' at the Cabinet Office.
A mixture of comments:
@Mike Otsuka: I'm not confident that the Oxbridge tutorial model isn't in danger of imploding, or at least withering away piecemeal. Certainly there's intense financial pressure on it. It's true that the tuition fee makes things better rather than worse, but it doesn't make it *much* better. I'm optimistic that we'll hold on to it one way or another, but it's certainly not safe.
@Brian: I think the most interesting disanalogy between UK "public" (i.e. private) schools and the private sector in US HE is the "needs-blind" principle. Nothing like that functions for UK private schools: they offer scholarships, sure, but it's nothing like enough to achieve true needs-blindness. I don't yet have a feeling as to whether NCH aspires to achieve needs-blindness in the medium term.
@Jasper Reid: to repeat something I said on the previous thread, I don't see how teaching to someone else's examination makes an institution into a crammer. By that definition, Oxford colleges are crammers; so are all schools.
@Mark Lance: as Mike Otsuka and I argued ad nauseam here about six months ago, the sticker price comparisons between the new UK system and the US hide a major difference in delivery: under the UK model, you're guaranteed a loan for the full amount of your fees, and you pay the loan back via what's effectively an extra income tax on your income over £25K. So insofar as the UK system is "quickly moving out of the reach of large sectors of the population", it's because of perceptions of the fee system, not because of its actual structure. (At least, if that's not the case I've yet to see a good argument as to why not.)
Mark, I thought you were staying on the topic of why Americans and Brits answered Brian's poll question differently; the suggestion was that Americans "can't imagine what a functional public system is like." If America's public system of higher education is *more* functional than Britain's, than this obviously will not be an explanation. (Unless Britons have much better imaginations than Americans!) That's why I assumed the issue was a comparative one. The bit about France was really just by-the-way.
I do agree that lower income people are rapidly being priced out of higher education in both countries, even while a larger percentage of both Americans and Brits are attending. I hope public universities will be taking financial aid responsibilities more seriously as their tuition costs rise.
@Thom Brooks: with apologies for rehashing discussions on this blog previously, but "100% to the teaching grant for arts, humanities, and social sciences" is pretty misleading, given that (a) the decrease in direct government funding per student is expected to be about the same in humanities and science, and (b) most of the money previously paid via the teaching grant is being recycled via subsidy to loan repayments.
I'm not sure that claims about "public" systems here are enlightening. People using it about the US university system are referring to the fact that state universities are state-owned, even when the state fails to fund them; in the UK universities are non-state-owned but the state provides most of the cash. The natural connotations of "public" also mislead, since "public" tends to conjure up some notion of a commons to which all (suitably qualified) citizens might have access. That clearly isn't the case for much of the "public" system in the US and threatens to cease to be the case in the UK. (Of course this is part of a more general pattern where resources that were once available to all get enclosed and restricted to those who can pay cash.)
There are three classes of universities in the US, and there is some conflation in this discussion between the first two kinds. Foreign scholars may be unaware of this, so it's worth pointing out.
1. Private, for-profit
2. Private, non-profit
3. Public
Private, for profit universities are mostly fraudulent degree mills. They exist to make their owners rich through government-backed student loans and grants. Most of their hapless students default on their loans and leave the taxpayers holding the bag. For example, the president of the online Strayer University, which you've never heard of, "earns" $42 million per year.
Private, non-profit universities include the famous and great places everyone knows. Not all have need-blind admissions; it largely depends on their endowments. But they do tend to have considerable student aid. There is also a trend to pay top administrators CEO pay, but nothing like the for-profits.
Public universities are increasingly public in name only. My own is nominally public, but we receive only 28% of our funding from the state. The governor wants to slash that. There is a nationwide downward trend in the public funding of higher ed.
What this means for the UK I'm not sure. But given the US experience with for-profit universities, I'm leery of that aspect of it.
Since my claim about a 'public system' was ambiguous and misunderstood, let me clarify. The UK has had a publicly funded system in which high quality higher education has been available to anyone qualified, regardless of ability to pay. That remains true today, and will probably remain true despite Tory policies. Grayling Hall puts this at risk (largely if it is successful enough to become a model for other initiatives). Americans have no experience of a publicly funded system in which high quality higher education has been available to any qualified person regardless of ability to pay. Rather, they have experience of a system which is a mixture of public and private, and in which ability to pay typically makes a big difference in the quality of education. They tend not to see a threat in Grayling Hall, I conjecture, because they think (rightly) that there is no scenario in which it will cause the public system to collapse. The worry I have, based on my experience with schooling in Australia, is that the public system is gradually transformed into a 'safety net' for those who can't afford the quality of the private system. This won't happen overnight in UK higher education, but the current funding arrangements make it a risk.
Jamie Dreier's remarks reveal a naive understanding of the causes that lie behind widespread tuition hikes in the USA. At most institutions, these hikes are not capricious – they have been made necessary by the state's withdrawal of funding for persistent institutional costs such as power bills, building maintenance and other mundane, but persistent institutional expenses. Given this fact there's almost no chance that the new revenue will or could be used to provide additional financial aid.
I must agree with David Wallace. The government currently provides a grant for the teaching of arts, humanities, and social sciences. This has been cut 100%. The new system will find the government providing cash upfront to cover this teaching, but this will be repaid by students upon graduation (or at least many students as the government predicts it will be unable to recover the full costs of its loads). Is it misleading to say students having to pay the full costs of teaching in the arts, humanities, and social sciences represents a major change from today where they do not? I hardly think so.
Thom: do you mean "disagree"?
Let me expand a bit on my previous comment. Here's how the current UK funding model works: every university place (arts, sciences, humanities, social sciences) is funded by the government to the tune of about £3,000 p/a. The government then provides additional funding for those courses (the non-classroom-based ones) that are more expensive to provide (almost, but not quite, all of these are science subjects). The government is proposing to strip away the baseline £3,000 p/a from all subjects, science and non-science. They're proposing to leave the additional funding largely alone (the details of this aren't clear). The idea that this is somehow a funding cut that's targeted wholly or largely on the humanities/arts/social science just isn't correct. (There are a small number of humanities courses that are likely to lose their additional funding too (drama and fine art, for instance); equally, it's by no means safe that all the science additional funding will be left untouched.)
That much, I think, isn't (or shouldn't be) controversial. The issue of how to think of the government's contribution to the loan system isn't so straightforward, but I'll stress the following:
(1) the government pays 100% of the costs of all u/g degrees up front.
(2) the repayment mechanism functions largely like a graduate tax: it's 9% of income above a fairly generous threshold, the amount payable is independent of the amount owed, and any leftover gets written off after 30 years. You have to have career-average earnings several times the median wage before the amount owed actually has any effect on what you pay.
(3) Because of (2), the government is going to end up picking up a very fat fraction of the total costs, and to end up paying, in aggregate, something not far off what it's paying now.
Is it a "major change"? Well, relative to the current system, the change from a student's perspective is that they end up paying less per year than they do on the current arrangement, but to be paying it for a much longer time. The change from the university's perspective isn't large: they still get a per-student payment, varying by subject, paid by the government, with part of it coming direct from HEFCE and the rest coming via the student's bank account; the mixture changes, and the total goes up a bit, but I don't think that makes a lot of difference. The change from the government's perspective is that the real costs to them become much less transparent. It depends what you mean by "major", I guess, but it doesn't seem so dramatic to me.
(I take Ian Rumfitt's point about being cautious about possible future changes to the system.)
I would still *disagree*. The change is in the principle of higher education as a public good. Students will soon have potentially much higher debts that they will carry for longer — is this not a "major change"?
I remain very surprised that the government made these proposals prior to publication of the higher education white paper. I wouldn't be surprised to learn of further announcements later this summer when it is published.
Thom,
What David Wallace said.
And what he and I have said before ad nauseum, for which apologies, but what else is there to do when someone repeats a point to which we’ve responded before, without explaining what was wrong with our earlier response?
You write: "Is it misleading to say students having to pay the full costs of teaching in the arts, humanities, and social sciences represents a major change from today where they do not? I hardly think so."
My reply is yes this is misleading, because students aren't going to pay the full costs of teaching in the arts, humanities, and social sciences. As David mentions above, and as he and I have noted at various previous points, the government will pick up a significant part of this cost (so significant, in fact, that BIS is having to go begging to the Treasury for more money) through loan write-offs, paid out of general taxation.
"The change is in the principle of higher education as a public good."
Perhaps this principle would have been abandoned if, in fact, students were being made to pay the full cost of their education. But the subsidy of the loans out of general taxation can be justified, among other justifications, as a means of recognizing the principle that higher education is (in part) a public good.
I think calling it "debt" is misleading. It's a graduate tax that stops after thirty years. If you're lucky enough to earn reasonably serious money (say, a final salary of around £75K or more), it's a graduate tax that stops a bit sooner.
@David Wallace, no, if it were a tax then all graduates would have to pay it. It's a debt because it's only paid by students who can't afford to pay the cost of their tuition outright by scrounging from their rich parents, and because poor folks don't get an automatic write-off the way they do with income taxation. A pretty elementary difference, really.
@Mark Silcox: I'm not sure what it is to be an "elementary" difference. But it's not a *relevant* difference.
Consider: tuition fees + maintenance loans come to about £13K p/a, or £39K for a 4-year course. Suppose you're a rich parent – that is, you have £39K you want to spend on your child – and you weren't able to pay off your child's tuition fee up front (say, because it really was a tax, or because some future government agrees with the Silcox position and outlaws it). No problem: just hold on to the £39K for a few years (during which it accrues interest) and gift it to your child when they buy their first house. If they have (say) an interest-only, 4% mortgage, your gift is worth about £1600 p/a to them. That's the same as the loan repayment rate on a salary of about £40K. Whether it's actually more financially beneficial for them to use their money on this rather than paying tuition fees is going to depend on details of expected salary, but there's not much in it, and I reckon on reasonable assumptions the mortage is going to be the better bet. And that's not surprising, because quite apart from the protection given by the income-contingent framework, the repayment terms for the tuition fee are better than commercial loans.
Look: short of really radical changes in society, rich parents are going to use their money for the financial benefit of their children. Does the tuition fee framework make any difference to that? I don't see why it should.
Incidentally, I don't understand what you mean by saying "poor folks don't get an automatic write-off the way they do with income taxation". You don't have to pay tuition fee repayments as long as you are poor, and conversely, once you're rich you don't get to write off income tax just because you used to be poor.
"3-year course", sorry. For 4-year courses (i.e. most science courses) the point doesn't change qualitatively but the relative advantage of putting the money into the mortgage goes up.
@Mark Silcox: surely debt is considered a bad thing because if you are unable to pay back that debt, you will suffer negative consequences (eg. your home will be repossessed, you'll be less able to secure future loans, your legs will be broken, etc.) Thus, debt makes people more vulnerable to certain undesirable things, and can therefore be a great source of anxiety. In contrast, if graduates are unable to pay back this "debt", they will suffer no negative consequences. Quite the opposite: they will be allowed to pay back far less than they originally borrowed. Therefore it seems to me that calling this a "debt" rather than a "tax" implies that it would pose far more of a burden on graduates than it really would.
Many thanks for this, Mike. One further question is this. You say:
"students aren't going to pay the full costs of teaching in the arts, humanities, and social sciences. As David mentions above, and as he and I have noted at various previous points, the government will pick up a significant part of this cost"
Does this not still entail that the majority share of the costs will be paid for by students and that this is new?
A further question: does anyone think the coalition government made the correct judgement to recommend this policy despite its deviation from Browne and in the absence of a White Paper?
@David Wallace, I see nothing wrong with your hypothetical example whatsoever, except that I have no idea what I'm supposed to infer from it. Poor families can't afford to pay tuition at all, sorta-rich families may often find themselves in the position that you describe, very-rich families will be able to pay for their kids' tuition and mortgages without breaking a sweat, and super-rich families can throw in an extra house or two if the spirit moves them. So?
I'm also utterly bemused over what you could mean by the 'Silcox position,' outside of thinking that perhaps you've been watching too much American cable television and believe that everyone who regards education as a public good is in cahoots with Big Brother.
@ Jasmine Leonard, as long as all one is getting is deferrals for student loans on account of poverty, further education or whatever, one's debt is still on the books, and the conditions for deferral are always under the threat of being changed with no notice at all by right-wing legislators. This is a very considerable source of anxiety for recent college grads in the USA – I don't know whether a similar scenario exists within the British system.
@Thom: At the moment, in the arts HEFCE and the student pay about the same amount up-front. The loan is subsidised but not to the same extent as under the new system. At a guess you're right that the majority is now paid by the student and that wasn't true before, but we're talking a shift from 45/55 to 55/45 – and a lot of the increase is new money going to the universities, not a decrease in the Government's expected contribution.
(As for the "further question": pass. I'm sure that a hypothetical policy that was worked out over a much longer period of time would have been better designed and done a better job of implementing the principles of the current policy. I'm equally sure that given the Lib Dems' manifesto commitment to oppose all tuition fees, there's no way any such policy would have stood a chance in Parliament. So the choice was probably between what we've got, and no change at all to the current framework but probably a sharp cut in HEFCE funding, in line with the overall austerity regime. (Not that I'm in favour of that regime, but that's a fundamental matter of policy, not a technocratic issue.) My hunch is we're better off with what we've got than with that; time will tell, though.)
@Mark: it sounds as if I might have misunderstood your position. I took you to be saying that the salient difference between the new system and a graduate tax is that under the former, but not the latter, the children of rich parents get a better deal than the children of poor parents. My example was supposed to demonstrate that this isn't functionally the case: the new system doesn't offer any new opportunities for wealthy parents to benefit their kids relative to poorer parents' kids. If family A has £40,000 to spend on their child that family B doesn't have, of course family A's child is going to be better off than family B's, but the fee system doesn't change how much better off. So if the Government blocked the scenario you're worried about (by, say, prohibiting private payment of the fee and blocking early repayments) it wouldn't actually make any difference to the effect of the fee. (By the way, "the Silcox position" was intended as a shorthand for the position on fees that (I took it that) you adopted – nothing deeper. I don't think I've watched American cable television in my life.)
To review the dialectic: I said that the new system basically functions like a graduate tax, not like a debt. You said that "It's a debt because [(i)] it's only paid by students who can't afford to pay the cost of their tuition outright by scrounging from their rich parents, and [(ii)] because poor folks don't get an automatic write-off the way they do with income taxation". My example attempts to show that (i) isn't functionally the case: for any given level of rich-parent contribution, it doesn't really matter whether the payment works like a tax or like a loan. As I noted above, I didn't understand (ii); I still don't.
@Mark Silcox: As mentioned above by David Wallace and Mike Otsuka, after a number of years (25 currently, 30 under the proposed system), a graduate's loan will be completely written off. Therefore they are not merely getting "deferrals" on those loans; the loans will eventually be taken "off the books" entirely.
Whilst it is true that future legislators might change the system in such a way as to make the terms of repayment less favourable for graduates, I think we can only sensibly discuss the system as it has been proposed. After all, even if we don't adopt the proposed system now, there would theoretically be nothing to stop future governments simply demanding that all graduates pay back the full cost of their tuition retrospectively. Governments can always move the goal-posts if they want to, though we hope that public outcry will prevent them from doing so. But this general threat that decent policies might one day be reversed or modified for the worse should not deter us from trying to implement decent policies now.
We surely can sensibly discuss the further changes that a proposed change facilitates. MPs and civil servants do this as a matter of course: they are always thinking four or five moves ahead in the political chess game. In this case, the 2011 Education Bill gives us all a pretty clear indication of what the next moves will be.
Many thanks again, David. I'm not sure about the 45/55 to 55/45 figure, but -if we accept your figure- this marks another significant change from about 15 years where there were no fees and free maintenance grants. We may simply disagree about whether this new shift from the public being the sole or primary source of funding for university teaching to the student is a significant change. I suspect those who favour the recent no-confidence vote at Oxford would agree with this view on the new policy as a significant change.
2. Do we have figures for how much debt students will fail to repay? It is worth noting that the Institute for Fiscal Studies claims that about half of all graduates will pay off their debts in full.
3. I'm glad to see we agree that the current policy could have been managed much better. It is true that the government is making big cuts in the name of austerity. One issue is whether austerity demands cuts and a second issue is whether this short-term problem demands a long-term solution.
Further to David Wallace's (June 14, 5:42 pm) comment, my quick back-of-the-envelope calculation based on IFS Table 2 projections from their December report is that current £3,300 fees now receive a £700 subsidy (on average, across all students, and per annum), and that this subsidy will go up to £2,400 per annum when fees go up to £9,000.
According to David Willetts, Group D humanities and social science students now receive a teaching grant of about £2,750 per student. If we add the £700 loan subsidy to this, and subtract that amount from the £3,300 fee, then the contribution out of general taxation per humanities student is £3,450 and the average student's contribution is £2,600. So it's now a 57% contribution out of general taxation and a 43% contribution from the student.
When fees go up to £9,000, the contribution out of general taxation will be the £2,400 loan subsidy, and the average student's contribution will be the remainder: £6,600. So this will be a 27% contribution out of a general taxation and a 73% student contribution.
That's a big shift — much bigger than David's estimate, which makes me wonder whether I've made a mistake somewhere, since he's better at maths than I am and also more well-informed about higher education spending.
But, as David notes, a significant part of this shift is the result of universities ending up with more resources to teach humanities students (even after we take into account that a portion of the £9,000 fees will be for bursaries and outreach rather than teaching).
To add a bit to Jasmine Leonard's (June 14, 6:55 pm) comment: I assume (though I could be mistaken) that the initial £21,000 repayment threshold, the 9% rate of repayment of income above that threshold, the tapering in of a 3%+inflation interest rate, and the 30 year limit of the obligation will be written into the contracts the students enter into when they receive their loans, in which case the government would have no legal grounds to shift these goal posts. It’s probably less clear whether there will be any provision for the inflation-indexing of the repayment threshold written into the contract itself.
David Wallace, Jasmine Leonars and Mike Otsuka don't see why the coming UK student loan debt is a debt, and not a graduate tax. One important reason that it's not a graduate tax is that it will mean that wealthy former students will pay less for university than middle class former students, even without "prepayments", and even without assuming probable future "adjustments" to the system to cover its cost, such as reducing the threshold amount at which payments become due. For example:
(The figures below assume borrowing of £8,000 fees/year and £5,000 living costs = a modest £39,000 debt incurred over three years)
A lucky student leaving university in 2015 with a starting salary of £35,000 that rises at a real 2% each year will *never* have to fully repay her debt under the current proposals. But because of interest charged above inflation, she will pay back a real (backward inflation-adjusted) total of £61,000 over 30 years.
An even luckier student leaving university in 2015 with a strating salary of £50,000 that rises at a real 2% each year will have to fully repay his debt, but he will have done so after 19 years. Therefore, he will pay much less interest. He will pay back a real total of £59,000 – less than the student who earns a much lower salary.
If it were a straight 9% graduate tax on earnings above £21,000, the wealthier student would pay back a real total of £126,000 over the first 30 years after graduating.
Compared to a graduate tax, the student loan debt system therefore represents a huge transfer from the middle class to the very wealthy. And the complete abandonment of the principle that university education is a public good, not just a private transaction between a producer and a consumer.
Another cluster of comments (assuming Brian's still happy to tolerate this somewhat-off-topic discussion):
@Mike: I think you're misreading the IFS report. That figure of £2,400 isn't the loan subsidy, it's the HEFCE payment (which goes to zero in some subjects but not all). The relevant numbers for humanities courses are the grant (average of £4500) and the fee subsidy (average of £12,000). Crudely pretending that all courses are 3 years long gives us an average government payment of around £5,500 p/a. Working out what that means for students isn't trivial, though, because the IFS is working with fees plus maintenance, but the same table gives their estimate as £27,000 – £9,000 p/a on my crude all-courses-are-three-years assumption.
Cutting to the bottom line, on the IFS numbers the current contribution ratio is 21:16 government:student; on £9K fees it'll be 19:27. So student contribution goes from 43% to 59%. That's fairly close to my estimate, but that's much more luck than judgement. It slightly understates the difference for humanities students because of the subject-specific extra HEFCE funding, but it doesn't make a lot of difference.
@Thom: (1) Absolutely, it's a major shift from 15-20 years ago. I wasn't at the Oxford congregation debate, but reports I hear from friends who were tell me that it was as much about perceived incompetence in delivery as about the principle of fees. (You might be depressed at how many people here think £9K is too low!)
(2) Any figures for debt repayment are guesses, because they depend on employment patterns decades from now. The IFS estimate is that the government will pick up about 30% of the real cost of the repayment.
(3) Personally, I don't think austerity demands cuts (not in the short term, anyway). I'm not a fan of this government's overall economic policy, but I took your question to be "did the government make correct judgments in the implementation of its HE policy", not "is this government's overall macro-economic policy foolish".
@Simon: I think your calculations are misleading. Having to pay £X 30 years from now is better than having to pay it now, even without allowing for inflation. If you calculate the present value of your hypothetical examples' repayments assuming (say) a 2% annual deflation, and if you also assume the median wage goes up at about that rate, the less lucky student's repayments have a present value of £37,800 and the luckier student's have a present value of £39,000. (I'm not saying that's the only way of working it out, but it's at least as justifiable as just taking the raw value.) I also think your models are slightly odd: are there many careers that pay a starting salary of £50K and a finishing salary of £90K.
But in any case, I think you're misrepresenting Jasmine, and Mike, and me. None of us (I take it) as saying that it is in all respects a graduate tax. (My own words earlier in this thread: "It's a graduate tax that stops after thirty years. If you're lucky enough to earn reasonably serious money (say, a final salary of around £75K or more), it's a graduate tax that stops a bit sooner.") The claim is that it functions as a tax from the point of view of what kind of expected barrier it places on children from different financial backgrounds applying to university: does it, for instance, price HE out of reach of children from poor families?
Finally, "complete" abandonment of the principle that university education is a public good would presumably require complete cessation of government funding. If, on the other hand, you think education is a hybrid good – partly private, partly public – you might well feel that no principle is at stake here, as long as HE remains (a) free at point of delivery, and (b) safely affordable, i.e. affordable whatever your postgraduate career path and circumstances.
Simon,
According to the IFS's modelling by graduate income decile for a £7,500 fee, each decile pays back more in real terms than the decile below it. I can see, however, that this might be consistent with your claim that some who earn more than others will end up paying back less in real terms over their lifetime, since the increase per decile is a very shallow incline from the 7th decile upwards, and, in any event, the IFS is averaging across deciles, whereas you're not. So I'll take it on trust that you're right about what these two individuals would repay.
You've shown that the repayment terms are considerably less progressive than what people earning enough to repay their loans over 30 years would repay if they were charged even a flat (i.e., non-progressive) 9% rate of taxation on all income over £21,000 years for 30 years. You've also shown that there's even a bit of regressivity in the total real amount that people will end up paying back.
But I think it's a stretch to say that "Compared to a graduate tax, the student loan debt system therefore represents a huge transfer from the middle class to the very wealthy". It's less tendentious and more accurate just to say that the loan repayment scheme is much better for the very wealthy than a genuine 9% graduate tax would be. (Would you also say that a 9% graduate tax represents a huge transfer from the middle class to the very wealthy as compared, say, to a graduate tax of double that rate?)
It's even more of a stretch to claim that you've shown that the student loan system represents "the complete abandonment of the principle that university education is a public good, not just a private transaction between a producer and a consumer." If it were just a private transaction between producer and consumer, there would be no cap on fees as the producer would be able to charge whatever he chose, and no up front payment of these fees by the state, as it would be up to the individual to raise his own money, and with the help of only whatever commercial loans he'd be able to get a private bank to agree to lend him, on much less generous terms than the student loans that the government will be providing. There is, you have to admit, a huge difference between 'just a private transaction' and the government's scheme of up front payments and subsidized loans.
David,
I calculated the £9,000 fee loan subsidy as x/3 to get the yearly subsidy for each of three years, where x/£12,000 = £16,420/£27,200. £12,000 is the RAB, which I'm reading as the total loan subsidy over three years. And £16,420/£27,200 is supposed to be the portion of the loan that covers fees rather than maintenance. (I don't understand, however, why these figures aren't higher. Shouldn't the total that covers fees be £27,000 rather than £16,420? So maybe I've misread the figures.) Does this make sense to you?
@David Wallace: "no principle is at stake here, as long as HE remains (a) free at point of delivery, and (b) safely affordable, i.e. affordable whatever your … career path and circumstances."
I propose an NHS patient-debt scheme for patients enjoying the hybrid good of cancer treatment, as well as a public school-debt scheme for schoolchildren enjoying the hybrid good of basic school education. 9% of any income above £21k after the fact seems "safely affordable" until the service is paid for, and these goods will remain free at the point of use. Of course, given these facts, "no principle is at stake here." What possible objection could there be?
Leave a Reply to Thom Brooks Cancel reply