The skyrocketing cost of a UK degree

LONDON, United Kingdom — Riiiip! One more hole in the fabric of Britain’s welfare state has been torn by the Conservative-Liberal Democrat coalition government in its “austerity” drive to reduce Britain’s deficit. On Tuesday, the government announced that the cost of higher education in Britain will double.

Currently students pay 3,290 pounds per year — about $5,200. This is set to rise to 7,000 pounds by 2012, Vince Cable, Britain’s secretary for business (whose department oversees higher education), told the House of Commons Tuesday.

To American readers the numbers may seem small, but as recently as a dozen years ago students in Britain paid nothing for higher education. That’s right. No tuition fees at all. Plus, the government gave students a small grant to cover room and board. But the free ride in higher education began to grind to a halt in at the end of the 1990s.

Facing a funding crisis similar to that in the University of California — which was also free at one point — the Labour government of Tony Blair introduced fees in 1999 and raised them in 2003. The increasing cost of higher education led Blair’s successor, Gordon Brown, to set-up a blue-ribbon commission under former BP chairman Lord Browne to study how to fund university education over the next couple of decades. Yesterday, Browne published his report and the new coalition government endorsed its recommendations completely.

Taken as a whole the Browne report is utterly confusing. Higher education here has evolved over the years into a Rube Goldberg machine. The government gives each university a block grant to spend as it sees fit to provide teaching and facilities for its students. Students pay nothing up front to go to university, which is generally a three-year long course. The government pays their tuition in the form of a loan that they have to pay back at the same rate of interest that the government pays to borrow money once they graduate and start earning 15,000 pounds a year. It also gives students a “maintenance grant,” of up to 2906 pounds for poorer students this year, to help pay for room and board.

In many ways this system won’t change. The reason for the rise in tuition fees is this: the government is about to slash the amount it gives to universities in block grant for teaching from 3.2 billion pounds this year to 800 million pounds in 2012. The rise in tuition fees is meant to cover that loss.

It’s hard to see though how much impact this will have on Britain’s 150 billion pound deficit in real terms. Students won’t have to start paying back until they are earning 21,000 pounds a year ($33,000). Given that this year is officially the worst year for college grads to find a job since 2000 and unemployment is inching up again throughout the British economy it may be some time before many graduates are earning enough to repay the tuition loans.

The only people who seem to be embracing the tuition fee rise — outside of the coalition leadership — are the heads of the Russell Group universities, Britain’s equivalent to the Ivy League plus Stanford, Duke and M.I.T. They have long chafed at being part of government-funded higher education. The heads of institutions such as Oxford, Cambridge and Imperial College believe, perhaps rightly, they could raise more money — and insure their survival as world-class universities — as private, independent institutions. Then they could charge comparable fees to Harvard and Stanford.

In fact, an American student — or any other foreign student — attending Oxford this year would pay closer to a Harvard or Stanford tuition: 12,500 pounds or $19,000.

For the moment the Russell Group is stuck with public funding, but these proposals put British higher education a giant step down the road to emulating American higher education’s funding model. This may explain why so many Liberal Democrat members of parliament are disturbed by the plan. Their party platform in last May’s election pledged not to raise tuition fees. Now the government of which they are part is planning to double them, with no sense that this is the last change to come.

There will be more shocks to the Lib Dem system — and many other segments of British society — on Oct. 20 when the government presents its comprehensive spending review to Parliament. The full details of the government’s cuts in the name of balancing the budget will be announced then.

Comments (1)

  1. Submitted by Bernice Vetsch on 10/17/2010 - 02:39 am.

    How sad for England that it elected Margaret Thatcher II instead of a Labor-Liberal Democrat coalition. Memories of the harm done by ultra-conservative governments are apparently short.

    When the four candidates for the next leader of the Labor Party debated a few weeks ago, I believe that one of the policies on which they all agreed was free higher ed., with students repaying the cost over time.

    When California’s university system was free, it led to a record-high number of citizens with the skills and knowledge to create, for instance, Silicon Valley. Plus, without the burden of tens of thousands of dollars of student loan debt, entrepreneurs could afford small business loans. Now, the anti-taxers have left its budget cupboard so bare that students were recently faced with a tuition increase somewhere between 35 and 40 percent.

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