As the last fees post explored, my reading of the Browne report is that they found it's the responsibility of the state to ensure a decent level of funding for education but also that the government decision making process can't be trusted to carry this out - requiring a system in which money is compelled out of the government coffers as loans, with prices set elsewhere. The Browne report redefines the role of the state so that there is no splitting of the burden between public and private sources, but the state simply provides  the capital upfront to allow your future private self to fund your education. In this way it changes government's role from being the representation of the public interest to one where it plays banker and is no longer required to make funding decisions.

There are exceptions to this in a few courses that are deemed to require continued public funding. While the courses listed are discussed only in terms of economic worth, keeping any idea of a cultural benefit firmly out of range, what the report’s actually getting at here isn’t just which courses are and aren’t economically required but mostly that these are courses that are more expensive to run, and so require subsidies to hide the true cost from students who might be put off. This amounts to an acknowledgement of the fairly obvious reality that students will be put off from one course as opposed to another on the basis of price (even when the cost isn't paid upfront) and concludes that the intimidation of higher fees for economically vital professions is considered serious enough that intervention is required. But to play the free-market position for a moment (and indeed use the language used elsewhere in the report), surely if these professions are truly vital, their future employers will pay higher wages that justify the investment they make in an education? If student choice has failed us here, are there other instances we should correct for the market?

Interestingly this means the Browne report does have a notion of the public good, but only in so far as we have enough engineers – there is no such argument made, for instance, that there is a good in having our elite institutions truly open to all. ¹  Browne at the same time as basing its system around the idea of student (consumer) choice, keeps pulling back from the idea that students are actually capable of making the correct decisions – and to be honest they’re probably right to – it’s not at all clear that even given ridiculous amounts of metrics prospective students will be in any position to make educated choices, as laid out in Stefan Collini’s excellent critique of Browne:

Browne appears to believe that the only relevant measure of teaching quality is ‘student satisfaction’. That is how the system will work: if they are satisfied, they’ll pay, and if not, not; and the pressure they exert thereby will ‘drive up quality’. But this, other problems aside, comes perilously close to reducing important human experiences to a set of ‘preferences’ as reported on a tick-box questionnaire. I would hope the students I teach come away with certain kinds of dissatisfaction (including with themselves: a ‘satisfied’ student is nigh-on ineducable), and it matters more that they carry on wondering about the source of that dissatisfaction than whether they ‘liked’ the course or not. This is another respect in which the ‘consumer’ model is simply misleading, an error encouraged by the prevalence in current edspeak of the category of ‘the student experience’ (many universities now have a senior figure entitled Pro-Vice-Chancellor, Student Experience). It may be that the most appropriate way to decide whether the atmosphere in the student bar is right is by what students say when asked in a questionnaire whether they ‘like’ it or not. But this is obviously not the best way to decide whether a philosophy degree should have a compulsory course on Kant. The philosophy department might hope that, some time after graduation, most of its former students would come to see the wisdom of this requirement, but ‘student satisfaction’ is not what is at issue here. That this recognition is retrospective tells us something important about education: individuals often need to be told by someone who knows that a particular line of study is worth pursuing whether at the time they want to or not.

While the report writers attempted to solve the perceived inability of politicians to make the right call on education by turning that decision over to a market, it’s not at all clear that the mechanism they picked is appropriate to the task and the report itself doesn’t have a great deal of trust in prospective students to make the right decisions when it’s really important. The vaguely tragic thing about the Browne report is that the version that arrived in the final coalition plan doesn’t even seem to achieve its own ends. Its goal of separating education funding from government oversight has failed as the caps mean that many universities will raise their fees to the cap just to replace cuts and so future governments will be required to either raise the cap or increase public investment in order to inject more money into the system. I don’t think it’s a universally terrible plan, the repayment plan is genuinely more progressive but it’s not at all convincing that the fees based market approach gives enough benefits to justify the discouraging effects that putting the price upfront  produces.

Note: I started writing this piece back in January, the recent (and completely predictable) announcements that everyone who can get away with it will be charging the maximum spurred me to go back and finish it off.

I saw Aaron Porter on the 10 o’clock the other week (note: now many, many months ago) criticising fees and loans on the basis that it will put students into debt for decades, which coming from the NUS position of a graduate tax is a little unfair as there is no practical difference between repaying a loan for three decades and being subject to an additional tax for the same amount of time (especially if both the tax and repayments are structured in a progressive way). If we imagine a situation where universities charged an infinite fee, an infinite loan was given and repayments were structured progressively and had a sunset after a few decades, there is no difference whatsoever in the effect on the payee. There is however a psychological difference between a debt with an exact price attached and a fuzzy commitment to higher taxes that’s given too short a shrift in the report. Given the choice, giving people good news (free university!) with hidden bad news (new higher tax!) is better than giving bad news with hidden good news (Expensive university! Which you might not have to pay all of! And the repayments process is good! But the frogurt is also cursed etc) and efforts to reassure people that university is actually pretty affordable have to fight uphill against that basic gut reaction, no matter how nice the numbers look.

Because of that problem you’d hope that fees-and-loans had some pretty substantial advantages over a graduate tax, but the Report’s criticisms of it are quite revealing of what it’s actually trying to do. There are a few areas where fees-and-loans is cleaner than a graduate tax would be e.g. a graduate tax has issues reclaiming money from graduates who move abroad and in dealing with students who didn't complete their courses (not deriving enough benefit from their courses to justify a tax but still a drain on the education budget), but the big issue Browne finds with it is that it’s economically infeasible given that it won’t start to produce enough money to fund itself until 2041. This nicely overlooks that fees-and-loans also requires the government to borrow/spend a large amount of money year on year to be able to give loans to students and the average student won’t start come close to paying back the original amount until around the same time period. In both systems investment is not paid back for around 30 years – and in the meantime the money still has to come from somewhere. I think what the report’s criticism of a graduate tax is really getting at is the notion that runs right through the report that government has historically failed to make the investments necessary and cannot be trusted to provide the general investment or per student funding the system needs.

As I read it, the unwritten purpose throughout the report is to safeguard university funding from future government action under the (perhaps not unreasonable) assumption this government or likely future governments will not substantially increase the amount of money going into education through the block grant to universities, especially under the current austerity plans. It takes the approach of rather than arguing for increased public investment in further education, assume that that’s a lost cause and try to find ways to do it without government needing to be involved. By transforming all government spending on further education into a guarantee of providing loans and letting universities set the fees (with no caps) this gives universities a semi-blank check from the government coffers to invest in themselves. This I suspect is the serious objection of the Browne Report to a graduate tax, despite shifting the cost onto graduates as a group it leaves the funding decisions to government. With Fees-and-Loans that year on year spending is hidden and occurs automatically behind the loans, no actual decision is required to fund it. it’s hard to see any government challenging the idea of deferred payment and it’s far easier for fees-and-loans to hide behind this than a graduate tax.

However the problem here is that giving universities a blank cheque is a really bad idea because in the unlikely, “why would that ever happen?” event that lots of universities change high fees (ironically as Stephen Tall points out, this might not have happened without fee caps), the government is then on the hook for more than it’s really able to be and we end up with the situation where they’re desperately looking to offload some of the debt load onto the private sector. As the next post will go into, at the same time as a market-based system still runs into the money problem it’s also opened up a whole new can of worms in terms of what a market in education is actually supposed to function.