What is a degree? (Not an academic question)

Civitas, 11 October 2010

Tomorrow, Lord Browne will deliver his review into university funding, writes Stephen Clarke, and there has been a great deal of debate about what the review will specifically propose. For example, leaks have suggested the fees that universities are allowed to charge will rise, and that there will be moves to differentiate interest rates on student loans, depending on graduates’ subsequent salary. There has been a great deal of debate around these two proposals and other areas of the review; however, more discussion about the nature and benefit of a university degree in general is required.

It may be easier for politicians to decide upon, and make the case to the public for, specific reforms if it is clear what exactly students and/or taxpayers are paying for.

A university degree is an asset for the person who achieves it. In many cases it is not such a clearly defined asset as a vocational qualification (in the sense that it may indicate that the holder has good problem solving or time management skills, rather than the ability to service a car), but a degree still indicates important qualities or skills that the holder possesses. Importantly, graduates hope that their degree will be an asset in their search for a job and, in general, it seems that it is.

The problem for any student, however, is deciding how valuable a degree truly is and, ultimately, whether it is worth the cost. For example, students would be more likely to undertake a degree that costs £50, than a degree that costs £100,000. Another possible factor in any prospective student’s calculation could be whether the degree will yield a return which makes the original cost worth it. For instance, if the majority of people have a degree and thus the ‘added value’  of possessing one is reduced, more students may decide against incurring the original cost of getting a degree in the first place. What is important is that this calculation is made by the purchaser of the asset, according to their current assessment of its value. At present, it would appear that a degree is still a very attractive, and in many cases useful, asset. However, the current system is failing in one important respect; it is financially unviable.

At the moment, it costs an average £7,000 per year to educate an undergraduate on a 3-year degree course and the student’s contribution is around £3,000 per year. The £4,000 shortfall is made up by grants and government funds. The Government has made it clear that it can no longer afford this and so universities are facing a funding crisis. The question is: how can the funding gap be plugged?

If a degree was only an asset for the individual, the answer would seem clear; the graduate should pay. However, it is indisputable that the wider economy, and society, benefits from the knowledge and skills attained by graduates. A degree has a social benefit and, therefore, responsibility for funding it should, in part, fall upon every member of society. However, society should not shoulder the majority of the burden for funding higher education because the primary benefit of a degree is realised by the individual, and thus it is the individual who should shoulder the primary burden of funding it. The problem, however, is that the majority of students cannot afford to pay the cost of their degree up front.  As a result, students are expected to pay for the cost of their degree after they have completed it.  This seems fair and workable (unlike the American system where fees are expected upfront – fair perhaps, but not  workable for many people).

The picture I have sketched so far is simplistic (overly so, many would contend), however, the issue gets complicated when we acknowledge the fact that the UK is an unequal society and many students who are intelligent enough to attend university may not be able to afford to through no fault of their own. This is unfair, and poses a difficult problem. If (in an unrealistically utopian world) all individuals had equal resources, then there may not be such a heated debate over paying for, and access to, university, but unfortunately the UK is no such utopia. The issue that emerges is thus; how can the Government ensure that the majority of the cost of attending university is shouldered by the graduate (as this seems fair) without discriminating against those who cannot afford it? The answer, I believe, is that the Government must step in and ensure that bursaries are available for those who cannot afford to go to university. These bursaries should be progressive in nature, and so help the poorest the most. Furthermore, these bursaries must rise if the cost of a degree rises, so that people’s ability to pay for a degree does not decrease.

The above interpretation of the value of a degree could be used to help to identify a fair way to fund it. Using this interpretation, it is clear that a number of the reforms currently being touted may be antithetical to the nature of a degree as I have outlined it (as an asset that primarily benefits the holder and that secondly benefits the wider society/economy). For instance, it is not fair to charge graduates more for their degree than the price they agreed to pay when they agreed to buy it. It is also not fair that different people should pay different amounts for the same degree, depending on how they use it. Different degrees may cost universities different amounts to provide and so students may be charged different amounts to take them. Furthermore, some universities may need to charge more and it will be up to students to decide whether they feel the degree is worth it.  Many such proposals would seem to enshrine a non-egalitarian system in which the best universities charge the highest fees for the most expensive courses to run, but this is not necessarily a bad thing if bursaries are available to ensure that poorer students are not discriminated against. This would ensure that whilst degrees may cost differing amounts of money, access to them would be decided by intellectual merit alone, with universities being properly reimbursed for the service they provide.

No doubt many will disagree with this analysis of the value of a degree and the implications that have been drawn from it in terms of how degrees should be funded. However, what is undeniable is that such an exercise is necessary in deciding how the UK will continue to fund its higher education systems, which is currently one of the best in the world. When Lord Browne’s review is released tomorrow, let’s hope it demonstrates that policy makers have expended as much effort on analysing the value and fair cost of degrees as commentators will, no doubt, expend on debating the proposals themselves.