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Allowing tuition fees to rise above £9,000 (in some cases) may not be a bad idea

By Peter Hoskin
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Do you remember all those students tearing through London in protest at £9,000 tuition fees? Well, what would happen if tuition fees were extended beyond £9,000? And that’s not just a moot question, either. An intriguing story in today’s Sunday Times (£) suggests that ministers are considering doing just that. Apparently, “Institutions whose graduates are likely to receive high salaries could be allowed to charge more than the current maximum of £9,000 a year for a degree.”

First things first, I wouldn’t expect this to happen any time soon. A “senior government source” tells the paper that “any changes would not happen in the near future,” which I suspect is a euphemistic way of saying, “You expect the Lib Dems to agree to this? Ha! No way.” If this were to happen, I suspect it would take a majority Tory government.

But, beyond that, the idea is worth considering, not least because it has some merit. To understand why, you need to cast your mind back to the New Labour years. Back then, ministers marketed the newly-introduced tuition fees by talking of a “graduate premium”. The average graduate would earn £400,000 more over their lifetime, they said, than the average graduate – so, cough up. But this figure was soon exposed as a charade. It was revised downwards and downwards to £100,000.

And, even when it started to look more realistic, Labour’s graduate premium had its flaws. It was always expressed as an average, which failed to capture the jittering variation between different degree courses. A report by PricewaterhouseCoopers, published in 2007, found that a typical medicine graduate might earn around £340,000 more than a non-graduate over their lifetime. But an arts graduate could expect only £35,000 more.

The current Government has been much more honest about the graduate premium. Two years ago, for instance, the Department for Business published its own report into “The Returns to Higher Education Qualifications”. But this honesty has still sat awkwardly against the current tuition fees policy. Under the current system, many universities have huddled around the £9,000 limit. Those that occupy the lower reaches of the league tables – for example, the University of East London – can, and do, charge the same as those at the top. This isn’t a market, it’s a stitch-up. You’ll have to pay the same amount back, regardless of what job your degree helps you into.

So how would this new proposal help the situation? For starters, by linking fees to expected earnings, it bolsters a very important principle – do you know what you’re getting, and do you want to pay for it? But there’s another aspect to it, too. According to the Sunday Times, “students who choose courses that do not lead to high-flying jobs could find they are able to borrow less and so have to pay a bigger share of the degree costs.” This might seem cruel, but hopefully it wouldn’t be. If prospective students have to contribute more themselves, then it should make them more discerning about which courses offer good value. Those courses and universities that don’t offer good value may have to lower their fees, get better, or face decline and then oblivion.

Of course, this isn’t a perfect solution. Politicians shouldn’t rush to express higher education in purely economic terms, just as they shouldn’t rush to pile more burdens on what I’ve previously called Generation Debt. And it could be said to unfairly penalise some, such as the hypothetical student who studies, say, law at Cambridge before going on to work for a charity. But it still strikes me as more agreeable than the current set-up, under which the best universities will simply go private and charge whatever they like, while the worst won’t have cause to improve.


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