What price a fair system? Full tuition fees for students

Economist argues that higher education does more for graduates than society. Chloe Stothart reports

September 25, 2008

UK universities should charge students the full cost of their degree courses - as much as £20,000 a year at some institutions - a former senior adviser at the World Bank has said.

George Psacharopoulos - an economist who was chief of the bank's education research division and has held academic posts at universities in Greece, the UK and the US - said charging full tuition fees would make the university system more socially equitable and efficient.

In a paper published in the journal Education Economics, Professor Psacharopoulos said higher education in the UK was generally fairer to taxpayers and more efficient than elsewhere in Europe. He praised the system whereby universities charge fees, students take out loans and choose which institution to attend. In addition, universities are more independent of the state than in some other countries, he said.

But he argued that UK institutions could do better by charging full fees. This would free them from the state and allow them to plough extra revenues into hiring top academics. They could use public money to provide bursaries for able students who could not afford tuition costs, he added.

In a debate in the House of Lords earlier in the summer, Lord Butler, former master of University College, Oxford, estimated the average cost of teaching each undergraduate at £20,000 a year. Lord Broers, former vice-chancellor of the University of Cambridge, said that Cambridge paid up to £6,000 from its own resources, in addition to its public funding and tuition fee income, to teach each student.

The Government will begin a review of the current £3,145 annual tuition fee next year.

Speaking to Times Higher Education, Professor Psacharopoulos said it would be fairer to charge full fees because the average taxpayer is poorer than the average graduate, and higher education benefits graduates more than society in the form of the higher wages they command.

He also advocated making universities independent of the state so that they could set salaries in order to retain top performers.

He added that directing some public money currently used for universities to school and pre-school education would have greater benefits for society than spending it on higher education. Studies have been unable to quantify the wider benefits of graduates to society whereas the benefits of having a more literate population are better known, he said.

"Public funding should be directed to a lower level of education for efficiency and equity," he said. But he admitted that charging for higher education would be politically unpopular.

Professor Psacharopoulos also suggested that students should be given government vouchers to pay for a place at any institution in the world, which would promote greater choice and competition in university education. He added, however, that there was already greater consumer choice in the UK system compared with some European countries, where students automatically attend local institutions.

"The bad universities would close within a couple of years (under a voucher system)," he said.

In the paper, he also jokingly proposed a European Commission body to police member states' education policies to check that they are efficient and equitable.


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