Learn now – pay later

FRFI 171 February / March 2003

The Labour government’s announcement in January that universities could charge fees of up to £3,000 to ‘home’ students has signalled the acceleration of a two-tier higher education system in Britain, increasingly modelled on the US.

The White Paper proposes that students finance their own higher education through personal borrowing. The current yearly £1,100 up-front course fees will be replaced by charges, initially capped, of a maximum £3,000 a year. Students will graduate with an estimated average debt of £18,000-£21,000 after three years (up from £12,000 at present). Labour argues that this level of debt is acceptable because, it claims, a university education guarantees the ‘average’ graduate an extra £400,000 over their lifetime. This is simply not true, particularly for those who enter the public sector (including nurses and teachers), and black and women workers who receive lower wages. Labour claims that making higher-earning graduates pay higher taxes in the future will not give universities the income boost they demand now.

The level of fee charged is discretionary. Universities will be able to charge higher fees for popular courses, or no fees at all! An ‘access regulator’, a kind of ‘poor person’s tsar’, will be appointed to monitor universities to ensure they are offering enough places to students from poorer backgrounds. From 2004 up-front grants of up to £1,000 a year will be available for poorer students. Those from households earning less than £10,000 (below a living wage) a year will get the full grant, those with less than £20,000 will get some funding. Despite the sprinkling of bursaries and allowances, the university fees system will mean that students will start their working lives with huge debts. Fees will be repaid through taxation at a rate of 9% of income on earnings of more than £15,000 a year. ‘In some cases, graduates will be paying at a higher rate than billionaires’ (Nick Cohen, Observer, January 2003). Already, the Financial Services Authority warns that one in five families is having difficulties with debt and government advice is to start saving for a pension now!

The government’s proposal opens the way for the privatisation of university education. Drop the term ‘fees’ and use the word ‘price’. Buying a higher education course is just like paying on credit for any other commodity, a holiday or a new kitchen, so that students contemplating university will need an accountant as well as a career adviser to decide where to go or what to study.

The Labour government’s target of getting 50% of young adults into higher education is driven by the interests of corporations. There is pressure on the government to give young adults skills training before they enter the workplace. This cheapens the cost of labour as employers do not have to provide on-the-job training and traditional apprenticeships. Meanwhile, unskilled 16-year-olds are forced to take the lowest-paid, deregulated work. Many trades which used to be open to 16 to 18-year-olds now require a university qualification from applicants. There are strong elements of social control in an education system that rewards only the young people who are subject to continuous institutional selection.

Having expanded the intake of the traditional universities and re-branded the polytechnics in an effort to increase higher education participation, the government is now planning to turn Further Education colleges (16 to 18-year-olds) into ‘universities’, offering two-year vocational degree courses. With such differentiation in graduate studies it is clear now why universities will be able to charge varying prices for course enrolment.

The Labour government is breaking yet another of its election pledges with the planned increase in university fees, and must tread carefully to avoid alienating its middle-class and better-off working-class voters. For this reason it spins the myths of choice, flexibility and opportunity. The mission statement of the newly-established Learning and Skills Council which has £7 billion a year to fund all post-16 education (except universities) speaks of building a ‘knowledge economy for the 21st century in which there are no barriers to people with talent or ambition’. Talent and ambition clearly come at a price.

Susan Davidson