Market forces and the charge of the fees brigade

January 31, 1997

Universities should ignore the exchequer and set their own fees, says Richard Mawditt

Levels of tuition fees have become inextricably linked to what the Government is prepared to pay for higher education, rather than to what is an appropriate level for the universities to charge. In contemplating further change of the systems of charging fees I question the reason for separate elements of tuition fees and direct exchequer support, particularly for undergraduate education.

In medieval times, indeed until education was reformed in this century, the level of fee was what the universities felt was appropriate and what the individual paid rested very much on the contributions which the universities received from benefactions, donations, endowments and revenue from their estates. Even with state awards and bursaries and scholarships from the public purse only a quarter of university revenue came from tuition fees until some 40 years ago.

Robbins and the subsequent decision that all who qualified for higher education should receive free tuition paid for by the state (albeit means-tested until 1977), it was still a matter of educational policy first and pricing second. With a system of financial planning through a well-established quinquennial process the fee levels remained relatively stable. The direct government subsidy became the variable - and therefore indirectly the mechanism controlling what the cost of higher education should be, rather than what it might be if institutions were independent from a fees cartel and levied fees accordingly.

I covet those halcyon days but they were prejudiced by the economic effects of the mid-1970s when an economic recession and rampant inflation killed off the quinquennial system.

The nation then entered a period of mixing and matching the levels of central and local government support for tuition fees in support of a quota system which was rarely understood and less often effective. Today we still have a system of direct grant and a disjointed process of collecting tuition fees.

We have, however, been through a recent age of sophistication in the analysis of costs and the allocation of resources - both external and internal - to our universities. We believe we know how much the different levels of education and different subject groups now cost and our higher education policy still recognises the provision of free tuition for undergraduates at least. It may be more difficult to analyse the costs of research and undergraduate teaching but could be well argued in a number of different ways how much an undergraduate should contribute towards the research programme and if at all subsidise the doctoral research.

The flexibility of degree courses with movement between full-time and part-time programmes, modularity, easier credit transfer arrangements and a further significant incline in entry into higher education will make pricing and charging an art form demanding more sophisticated systems. How rewarding it would be to replace the present inadequate levels imposed for tuition fees, particularly for the ever increasing numbers of part-timers, with a system based on what provision really costs.

Why, in these days of cost enlightenment, should the universities not move to a simple process of determining and imposing student fees subject by subject, university by university and have the fortitude to stand on their own with a fees mechanism to fund all their resource needs? The universities would price undergraduate learning accordingly and the state might or might not meet that full commitment. Higher education would become a marketplace in which the individual entering university would have a choice. It would also be for society to decide whether the undergraduate should be paid for entirely by the state or by the student customer. The universities would then get on with the business of providing properly costed quality education.

Michael Sadler wrote in 1915: "In the new universities, care should be taken to keep up the fee income. Provided there are plenty of scholarships with maintenance allowances, and of free places for intellectually promising students from homes in which the family income is slender, it is a good thing to require a substantial fee for university or higher technological training. The parents and undergraduates alike are invigorated by having to make a deliberate sacrifice of pleasure or comfort in order to get access to higher education. At the same time, admission to all educational institutions helped from public funds should be strictly limited to those students, whether fee-paying or not, who are intellectually qualified and industrious". He adds: "The theory that all education should be free is based on a psychological mistake. Very many people (not all) value a thing more highly if they have to pay for it. Education is indeed too costly a thing to be self supporting in all its forms."

If we sadly have to forsake Robbins should we not welcome back Sadler? Universities, with their new processes of quality assurance, evaluation and appraisal of departments and individuals have more of a responsibility to themselves than to the exchequer.

As we wait for Dearing and witness once again the witterings of those who do or do not favour top-up fees, I hope the system will be brave enough to move away from the perennial tampering which has not served us well recently, take out a clean sheet of paper and have the courage to start again.

Richard Mawditt is director of the international centre for higher education management, University of Bath.

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