Fees spark fears of divided system

January 16, 1998

TUITION fees look likely to sharpen debate on whether Britain has a two-tier higher education system based on wealth and social class, writes Alan Thomson.

All universities will have to charge and collect fees and will face a degree of difficulty introducing the system. But the problems faced are likely to be greater for new institutions with relatively poor students than for old institutions with a mainly middle-class intake.

New universities

London Guildhall University had an overall deficit of just over Pounds 2 million in 1995-96. It introduced a recovery plan that has since brought finances back into the black but at the cost of cutting between Pounds 4 million and Pounds 5 million from expenditure.

Added to this is the fact that the university recruits large numbers of students from disadvantaged and less wealthy backgrounds. While the poorest students will be exempt from paying tuition fees, Guildhall may be left in the unviable position of chasing large numbers of students who owe very small portions of the maximum Pounds 1,000 fee.

Provost Roderick Floud said: "The worst scenario would be having to chase a large number of very small fees. The costs would outweigh the benefit. But the government assumes we have this income and will not compensate us."

The University of Central England is required by its governors to have a cash balance of Pounds 4 million. The fear is that the extra costs of collecting the fees from about 8,000 first-years this October could leave the university as much as Pounds 200,000 out of pocket.

Vice chancellor Peter Knight said: "There is no point in spending Pounds 50 to collect Pounds 50. There are service charges if students pay by credit card and equally a transaction charge if they pay by cheque. When you multiply this by all the part-time and, from October, full-time undergraduates it amounts to a significant percentage loss."

The University of Northumbria at Newcastle has relatively healthy reserves but these could be whittled away rapidly if tuition fees are not collected quickly.

Pro-vice chancellor Gordon Campbell said: "Cash flow will not be a problem in the first year but unless we solve the issues and collect money quickly then it will become a serious cumulative problem in future years when we have debt from first, second and third- years to collect."

Mr Campbell said that he was also worried that local education authorities would no longer be responsible for carrying out the means-testing of students for tuition fees from next year. He said: "The costs could be extremely high."

Old universities

Three-quarters of the students attending Exeter University are from the professional middle class, says vice chancellor Sir Geoffrey Holland. This alone is enough to reassure Sir Geoffrey that his students, many of whom will be liable for the full Pounds 1,000 fee, will pay up quickly. He said: "It is not an area where we would expect to have large problems." What worries Sir Geoffrey more is possible delays in the means-testing assessments.

Durham University said it was "reasonably reliant" on collecting most of the tuition fees money due. Treasurer Paulina Lubacz said: "We are not one of the institutions that will have an acute problem but we are far from insulated from it."

Ms Lubacz said that although there was a cross-section many Durham students came from comfortable backgrounds. She said that the biggest worry was the length of time local authorities took to do the means testing.

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