Why raising tuition fees is wrong

About Jonathan Lea

Jonathan is a specialist corporate and commercial solicitor who has over 11 years of experience at both large international City firms and smaller practices. For the last two years he has worked on a self-employed basis with a network of other freelance lawyers focused on entrepreneur-led businesses. If you'd like a competitive quote for any legal work please send an email to the address on the home page. You can also follow him on Twitter @jonathanlea

Capitalism rules (generally)

OK, before I go any further I’ll lay my cards on the table.  I’m an economic liberal in terms of wanting to live in a country that enjoys the freedoms of a market system and embraces wealth creation and private sector dynamism. Generally, I don’t believe in redistribution and socialism. History shows that these ideologies have had a far more pernicious effect on societies than any form of capitalism. In essence, I’d rather live in a country where people can become billionaires through providing great products or services rather than through controlling the state. In the words of Winston Churchill, “while the main vice of capitalism is the uneven distribution of prosperity, the main vice of socialism is the even distribution of misery”.

The state’s role in education

However, I have always believed that where the state should play a role is to level the field as much as possible when it comes to higher education. By equalizing opportunities at this level I believe you take unfairness relating to people’s background out of the system, leaving all to compete happily in a market economy. In my experience, contemporaries of mine from Bristol University, whether they came from an independent or state school background beforehand, have all used their university education as a springboard to successful careers. Furthermore, although universities have been funded by the state, the system still allows a high degree of choice which has kept the provision of services competitive.

Unequal opportunity

The introduction of increased tuition fees will remove this level playing field as the top universities will increasingly become the sole preserve of the wealthy. I come from what might be described by some as a privileged background, but the thought of now graduating with a debt of £50,000 (tuition fees and student loan combined) makes me seriously question whether I would now want to go to university. Instead, I’d be thinking of trying my luck and starting my working life at 18 safe in the knowledge that I would have a 3 year career head start and be £50,000 better off than anyone deciding to go to university. In particular, this will be the attitude adopted by people from poorer backgrounds who are under more pressure to start earning sooner rather than later and for whom the high debt levels will be even more of a barrier. This will mean that careers that require a degree will be out of reach of the less privileged and professions like medicine and law, that require several years of study, will become even more the exclusive domain of the wealthy than they are now. Another result of this will mean that the top graduate jobs will go to the wealthiest, not necessarily the most able candidates, and society will be worse off as a result.

The US example

The ‘superior’ privately funded US higher education system is often used to justify the increase in tuition fees. From my experience, those graduates produced by the British and European state funded model appear no different to people educated at US universities. Indeed, I have met a fair few people who have spent ridiculous amounts on Harvard education, MBAs etc but it doesn’t seem to make them any smarter. I believe current US global economic hegemony is more to do with a stronger work ethic, greater respect for wealth creation and enterprise, a more open culture and a more sophisticated and effective finance system, particularly their thriving venture capital scene for small and younger companies.

Generational subjugation

New waves of highly indebted students will boost the economic position and relative wealth of older generations, most of whom were paid to go to university rather than burdened with debt. The housing market, and property owning in general, will become even more dominated by older generations. Recent graduates will take many more years to be in a position where they have enough equity and security to offer lenders. This will allow the existing property owning classes to subjugate the younger generations who will be forced to rent from them for longer and who in turn will continue to be better placed to acquire even more property. The need to pay back student debt also lessens the ability of young enterprising people to start their own businesses and increases the graduate supply to established, but less innovative, businesses. The economy will become less vibrant as a result.

Population stagnation and deterioration

Young people will find it harder and harder to afford houses or to start families and middle class graduates will spend longer working to pay off debts, that they maybe shouldn’t have bothered getting, before settling down. As a result, the UK population will get progressively older. At the same time, those growing up in economically depressed areas will have even less hope of improving their life chances by going to university and will continue to be incentivised by the benefits and housing system so that they’re provided for by the state and able to produce children they couldn’t afford via their own means.

Undemocratic changes

The vast majority of people affected by the recent increase in tuition fees are not yet of voting age and a miniscule number would have been eligible to vote at the last election. Furthermore, the Liberal Democrats campaigned heavily at the last election against a rise to tuition fees, thereby winning seats with their student friendly manifesto. The government decision to increase tuition fees would not have been passed if the coalition Lib Dems had not changed their position so dramatically. It is therefore questionable how ethical or legitimate such undemocratic decision making is.

Necessary cuts?

You see and hear a lot of figures, so I’m not sure on the accuracy, but somewhere I learnt that the annual higher education budget will be cut from £7.1bn to £4.2bn by 2014. I guess that means the £2.9bn shortfall will (eventually) be covered by the higher fees paid by students. In the context of the UK’s current economic woe this doesn’t seem like that big a figure. Apparently tax evasion costs the UK £15.2 bn (and legal tax avoidance many billions more no doubt) and benefit fraud £1.1 bn annually. Wouldn’t it be more beneficial for the UK to claw back more money by trying to right these wrongs? Although I enjoyed his awful performances on X Factor, Wagner seemed to have no qualms about appearing on the show
despite claiming incapacity benefit. This seems like an indication of the widespread abuse of the system. Social security benefits now cost the UK £150 billion a year (more than is raised by the government from income tax!) and the NHS, widely acknowledged as one of the world’s most inefficient organizations, now has an annual budget of £90 billion.  Surely it would be more beneficial to rationalize these two budgets just a little bit rather than increase tuition fees by quite so much? Also, in an era when the government are using the economic circumstances to justify tax increases, why not tax those who benefited from a free education a fraction more?

Do universities provide value in a virtual age?

When information and knowledge is ever more virtual and easily accessible on the web, rather than restricted to physical libraries and retained professors, it seems questionable whether an increase in tuition fees represents good value for money. I’ve learnt far more since university, on a range of topics, by being better connected to the internet and using social media such as twitter and blogs. It might be argued that a degree is only a pre-requisite for a lot of jobs because of inertia and the requirements of institutionalised box tickers in the HR departments of large companies. I think any bright 18 year old school leaver could do just as well as any bright university leaver in most jobs that are seen as limited to graduates. You only have to compare the performances of 16 years olds on The Junior Apprentice to the older contestants on The Apprentice to realise that a bit more experience or ‘maturity’ doesn’t necessarily make you any more able. In a fast moving digital age, I think it’s more important to have an agile mind and a keenness to constantly learn new things than to have a university degree in any particular subject.

Brain drain

With the cost of university having jumped so dramatically in the UK most enterprising students will look at universities abroad to find successful institutions that will offer them a great education and qualification but at less cost. This will be particularly notable in Commonwealth countries where the higher education market is growing rapidly and the teaching language in most cases remains English. UK students looking to move abroad could easily become a significant trend which will eventually lead to a brain drain for the UK economy as they take graduate opportunities abroad rather than in their home country.

 

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