Lord Browne points to higher fees

Universities should be unlimited in charging fees to students, the Browne review of university funding has recommended. The influential review, released early this week, outlined various proposals and potential changes in higher education funding to the government, including lifting the current cap on annual tuition fees, which currently stand at £3,290. The review also proposed raising the threshold earning salary for graduate repayment to £21,000 to ease the rise.

Lord Browne, a member of the House of Lords, former CEO of BP and President of the Royal Academy of Engineering, started the review panel in November 2009 in order to consider the “balance of contributions to universities by taxpayers, students, graduates and employers to university finances’’, as described by Lord Mandelson. Initial findings were published in March 2010, where it was heard that students were not deterred by current fees but the system was inadequate, and the full review was published last Tuesday following submissions from various student and university groups.

The main recommendation of the report was that the current cap of £3,290 be lifted

The main recommendation of the report was that the current cap of £3,290 be lifted, allowing universities the freedom to charge as much as they need. The report, released under the title “Securing a Sustainable Future for Higher Education’’, made further recommendations that universities no longer be required to provide a minimum bursary (currently £329) for full grant students. Suggestions include distributing this bursary through the grants system instead. Tuition fees up to £6,000 are recommended to be underwritten by the government, and fees greater are levied in that universities keep a diminishing proportion for every thousand over £6,000. Namely 40% , 45% and 50% of the first, second and third respectively.

The report continued to suggest that students should not have to pay tuition fees up front, and that part time students be eligible for loans under the higher education funding scheme. The threshold for graduate repayment is proposed to rise to £21,000 from the current £15,000, with the inclusion of the period after which debts are written off rising to 30 years from the current 25. The interest rate is applied when earnings reach this threshold and stand at the current amount for borrowing from government (2.2%). Money owed would rise with inflation regardless of earnings. The report also suggests increasing both the maintenance grant to £3,250 from the current £2,906 for households with incomes less than £25,000 and the upper threshold for partial maintenance grants to £60,000 from £50,020.

Alongside changes to fees, the review recommended a shake-up in university regulation. At present there are four higher education bodies; HEFCE; Quality Assurance agency; Office for Fair Access and the Office of the Independent Adjudicator. The review argued that these should be merged into one Higher Education Council. This body would have the power to bail out failing universities. No university has ever gone bankrupt, but in the ‘free-market for education’ advocated by Browne, this would be a real possibility. Early calculations suggest that if institutions charge £6,000 per year or less, their overall income would be slightly lower than at present.

As well as affecting universities as a whole, the regulations would also oblige staff and students to meet higher standards. Academic staff with teaching responsibilities would have to undertake a teaching qualification. The review advised a minimum level of UCAS points for students to be eligible for financial support, taking into account the demand and budget for individual courses.The funding gained by the extra fees would allow a 10% increase in university places over three years. Universities charging over £7,000 per year, will be subject to scrutiny, ensuring that these extra funds are being used fairly to encourage students from poorer backgrounds.

Labour leader Ed Miliband warned against the proposed ‘free market’ in education. He offered to “work with anybody in the House of Commons who wants a progressive system of finance”, an unspoken appeal to members of the Liberal Democrats who campaigned in the general election to keep the current cap on fees.

We have taken off the cap, but we haven’t taken off the restrictions Lord Browne

Lord Browne defended his recommendations, saying “We have taken off the cap, but we haven’t taken off the restrictions”

But student groups have criticised the review as unfair on the next generation of students. In this paper, National Union of Students President Aaron Porter argued that the proposals would “leave graduates with crippling amounts of debt, and deter applicants from poorer backgrounds.”

The NUS also warned the Liberal Democrats against betraying the students who voted for them in the general election. They claimed that if the government adopted the recommendations, they would be handing a ‘blank cheque’ to universities, without any proof that the increased funds would improve standards.

The proposal of increasing the threshold for repayment to £21,000 means graduates will pay 9p of every pound earned above this threshold, meaning that the average Imperial graduate starting on £28,116 will begin paying £53 per month immediately, significantly less than the £91 they would have been paying under the current system. However, the total amount paid back will be considerably greater; not just because of increased fees, but also because the government will now charge real interest on the loans (previously kept at inflation) of 2.2% on top of inflation. Business Secretary Vince Cable has also suggested a penalty for early repayment of loans, to prevent wealthier graduates paying less by avoiding interest building up.

The proportion of the population going to university has gone up considerably in recent years; increasing by 44% in the last 10 years alone. Many have argued that this has undermined the value of a degree, with many polytechnic colleges becoming universities and many courses being revamped as degrees. The huge boost in funding that these proposals would give to the country’s top universities may start to reverse this trend; with other universities feeling pressured into providing ‘softer’ courses in two years to reduce spending, the elite universities may start to pull ahead as in the past, as potentially the only ones able to afford full degree courses.

There is some doubt as to where this leaves Higher Education in Britain. Lord Browne insists that the proposed reforms would put more power into the hands of students, on whom universities will be more reliant, enabling them to ‘vote with their money’ and leave unpopular institutions to the mercy of the market. However, many groups (including the NUS) have voiced concerns that potential students from poorer families with the ability to study may be put off by the fees, or choose lesser universities or courses, on the basis of price. There have also been fears aired that the proposals could create a two tiered system of rich and poor universities. Whatever the effects on enrolment, the shift in university education from effectively a state subsidised right to a serious financial investment, the proposals have the potential to change the very way that higher education is seen in this country.