After British higher education's autumn of discontent, neither the coalition government nor the sky has fallen. Yet the UK academy has changed fundamentally in the wake of confirmed spending cuts. Universities will survive, and many will flourish, but the current cap on fees will seem quaint in five years' time. Fees will go through the roof, as they have in the US, and universities will become engines of inequality rather than social mobility. The question now is how universities and government policy will adapt to these outcomes.
A university system can achieve only two of three political and social goals: academic excellence; public austerity; and social equality. This means there are three flavours of the higher education system. As a Brit teaching in the US and an American teaching in Europe, we have not only written about them, but have also seen them in action.
The Scandinavian countries have created truly mass public higher education systems. These are fiscally expensive, used by a majority of the population and financed entirely through taxation. While they deliver excellent universities and social equality, mass public systems exacerbate fiscal woes. Sweden and its neighbours maintain "free" mass higher education, but only because taxpayers continue to write hefty cheques.
The Anglo-American countries, from the US and Canada to Australia, have supported mass enrolment by relying on student contributions. Tuition fees deliver austerity without endangering excellence: indeed, the US spends more on higher education as a share of national income than any other country. However, fees lead to greater differentiation among universities and students. The affordability of fees depends partly on state support but mostly on family income. The problem of austerity is replaced by one of inequality.
Continental Europe has taken a third road - limiting enrolment. In Germany, university enrolment and higher education spending are only half the level of Canada's or Sweden's. Overflowing lecture halls and indifferent professors are the result. Austerity has trumped excellence.
The British government has opted for quality at the price of inequality. The Liberal Democrats once demanded the removal of fees and increased public funding, along Swedish lines. In 2005, the Conservatives toyed with limiting enrolment. But the coalition, building on New Labour, has accelerated down the American road.
This does not mean disaster for all UK universities, but it does signal an end to any commitment to equal access. Some universities will fail if student fees are allowed to rise.
There will continue to be strong student demand to attend universities, especially the best ones, but the burden of funding will shift on to students and families. Those of modest means will have to make uncomfortable choices: piling up debt to give their children access to a brighter future. The coalition can have productivity and austerity, but only at the cost of greater inequality.
The question now is how to make universities accessible to all families when their prices rise. This has worked best in US universities when senior administrators make the recruitment of disadvantaged students a priority. In a world of falling state funding, raising money to pay for poor students is the last thing vice-chancellors want to worry about. But that is the only way that the promise of great universities can be offered to all members of society.
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