The Case for Fairer Fees

Sir Peter Lampl makes the case for means-tested fees as new research suggests that fear of debt is a significant concern.

Today, the Sutton Trust has published new evidence that the level of fees may be having a disproportionate deterrent effect on young people from low income homes.

Research by Ipsos MORI for the Trust shows that fear of debt and cost concerns could be deterring significant numbers of young people from going to university, or choosing the most appropriate place to study.

While it remains true that four in five 11-16 year-olds aspire to enter higher education, children from single parent families are nearly three times as likely to say their family couldn’t afford for them to be a student as those living in two parent homes. Youngsters also start to worry more about student debt as they get older.

The polling also shows that many potential students expect to pay more to attend elite universities – such as Oxford, Cambridge, Durham or Bristol – than other universities.  This is despite the fact that almost all universities are now charging close to the £9000 maximum for their courses.

This latest polling follows a report in August by the Independent Commission on Fees, chaired by Will Hutton, showing that around one person in 20 who would have been expected to apply to university in 2012 if the recent trend of increasing application rates among 18-years-olds in England was maintained did not do so. This equates to approximately 15,000 ‘missing’ young applicants.

It also comes after the latest UCAS figures for 2012-13 showing that the number of young people from the UK and the EU who have been accepted this year is 56,000 below that for last year. This figure included under-recruitment at seven Russell Group universities.

I think that taken together these pieces of evidence suggest that the Government has gone too far in allowing universities to set fees of £9000 each. The new fees are simply too high, and the cuts in teaching budgets too deep. Taken together, they make Britain a complete outlier by international standards.

I supported the £1000 fee in 1998 and I backed the increase to £3000 in 2006, because I believed that they struck a reasonable balance in funding between the state and the individual. Had the Government opted for an increase to, say, £5000, this might have been reasonable.

But £9000 is a step too far. Of course, ministers will argue that the repayments system is fair because young people need not make any repayments below an income of £21,000, as opposed to £15,000 in the old system. But the size of the cumulative debt for tuition is trebled and daunting to an increasing number of young people from low and middle income families, and their parents. Those who currently pay independent school fees can simply pay these fees up-front.

University vice-chancellors have toed the party line, arguing that extra fees will boost academic coffers and not alienate students. But the Oxford experience suggests this is not how they truly feel.

My old university recently announced a £300 million fund that builds on an exceptional gift of £75 million by Michael Moritz, a fellow alumnus based in California, that will result in no increase in tuition fees for low-income students. This surely is a bold statement – backed up by £300m – that they believe fees are a deterrent.

What would I do about it all? Put simply, I think we now need to move to needs blind admissions for universities, just as happens in many US universities. We treat young people as if they are financially independent at 18, which is plainly ridiculous. Why should a boarding-school student pay the same as a kid from a council estate? Before the era of tuition fees the student maintenance grant was means-tested, so there is no logic in treating fees differently. It could be paid for, in part, by savings from state-subsidised loans.

I saw a better vision of university funding in action over the summer when the Sutton Trust ran its first US summer school for low and middle-income British students at Yale. If those students went to a top US university, those from families with an income below £40,000 would get their higher education free.

The Government should think again about its fees and loans package. The evidence is mounting that the new fees are seen as too high, particularly by those on modest means. Ministers should means test the fees, so that merit not money is the key consideration in a young person’s decision.