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Funding our universities in hard times: higher fees or more foreign students?

Thursday, 02 April 2009 10:51

The number of international students in the UK has ballooned in recent years. According to the Higher Education Statistics Agency one fifth of last year’s graduates were overseas students, nearly double the 1997 figure.

Why so many overseas students? A lack of cash. Fees from non-EU students, who pay two or three times more than home students, accounted for 8 per cent of total university income in 2007 and 30 per cent of income from tuition fees, education grants and contracts. Tuition fees from UK and EU students only accounted for only 15 per cent of total income.

Recent government decisions and the economic crisis look likely to increase universities’ reliance on non-EU student fees. The government has deferred a decision on variable tuition fees until June 2010, and there is a cap on home students numbers until 2011. With universities unable to raise fees, or recruit more home students, and the current economic climate making government spending cutbacks likely, it is very difficult to see other options for raising income. Roy Anderson, rector of Imperial College London, admitted as much in the FT, saying that he would look to increase the proportion of non-EU students if the recession forced a government spending clampdown for 2010-11.

Foreign students make a huge contribution to the strength and diversity of our university system and the direct benefits to the UK economy of international education are estimated at £5 billion. However, simply adding university places to make money will undermine the quality and reputation of our universities. A 2007 report by the Higher Education Policy Institute said the UK’s international student market “may be disturbingly vulnerable.” Their survey found that 27 per cent of non-EU students felt they were getting “poor or very poor value for money.”

The UK trails behind the US in global university league tables. Meanwhile, Asian countries have been devoting enormous resources to their university systems. Over the next ten years, China is predicted to educate more graduates than Europe. In order to maintain and improve the international standing of our university system it is going to be vital to ensure that its funding is sufficient and sustainable: we should not be over-reliant on an international student market that will become increasingly competitive.

The government seems unwilling and unable to increase funding for universities. Adrian Smith, the government’s director-general for science and research, has claimed that delaying the decision on variable tuition fees has left universities “going bankrupt”. A decision on funding cannot be put off.

First, the government should remove the cap on home student numbers. University applications have risen by 7.8 per cent this year. Universities should be allowed to capitalise on this and people should not be denied the chance to study at a time when the job market is so competitive.

Second, the government should raise the limit on variable tuition fees. As long as bursaries and grants are also raised this need not be the socially divisive move that critics fear.

Our fees system could model itself on Harvard. Whilst having very high tuition fees – $34,998 a year – Harvard no longer requires students from households earning less than $60,000 per year to pay anything towards their fees. Contributions thereafter are set on a sliding scale so that only those from families who earn more than $180,000 pay the full amount. Those who earn between $120,000 and $180,000, only ever pay 10 per cent of their family income. These exemptions also apply to international students: Harvard is building a system that rewards ability, not means.

Harvard, of course, is a fantastically rich institution. Our university fees should not jump to such a high level. But we should navigate a middle path whereby students from higher-income backgrounds pay higher fees than currently, with a sliding scale of assistance which ends up providing more grants and financial help for those who need it most.

Comments (29)

If we don’t want to sacrifice the quality education rendered by universities proper funding should have been made. Government must cooperate with the need of some university through lending fund. A better education system will boost for a competent graduate, which could possibly mean a high employment rate. An alternative financial plan comes in handy during hard times. The key to financial planning or planning of any sort is to always have a backup plan in case your first idea doesn't work out. One of the first things to do is to make sure you come in under budget every month. Don't spend more than you earn. (This means you, Congress!) Try to put money away into savings, and don't add any more debt if you can help it – this means no credit cards. Use a payday loan if you have to. An alternative financial plan that acts as debt relief and puts more money in your pocket is ideal.

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