Lord Browne's University Funding Review Published Today

What does the tuition fee review mean for British students?

12th October 2010

Today Lord Browne's report in to university funding has been published.

There had been much speculation in to the precise recommendations he would make but there was never any doubt that higher education would become more expensive for British students.

It is too early to know when any changes to tuition fees will be made, not least because any change still has to be voted into law. At the moment, these are only recommendations. However, there has been so much discussion about graduate taxes, upper limits on fees etc in recent months that it seems fairly certain the government was trying to prepare the ground for the conclusions it was expecting. So while Lib Dem MPs might have some soul searching to do, it seems fairly clear that Lord Browne's recommendations will be accepted in their entirety. After all, it was the previous Labour government that set in motion this review (and postponed its reporting date until after the election because it knew the recommendations could only be unpalatable to many people).

So, there are still a number of unanswered questions regarding the change in tuition fees:

• When will they be introduced? The consensus seems to be from 2012 but we have never heard anyone say it will not be from 2011. The funding crisis in university education is about to get a lot worse with the Comprehensive Spending Review later this month so we imagine that many universities will be pushing for higher fees to be introduced as soon as possible.
  
• Will there be any guarantees offered by universities? If students are being asked to invest in their higher education on the basis of improved employment prospects will they have any recourse if these prospects fail to materialise, or if they have been misled by a university's claims. Will we see the introduction of a "gainful employment rule" such as the one under discussion in the USA.
• Will the increased revenue from tuition fees be ringfenced for tuition? Will students' contribution to university funding be invested in the areas where they benefit directly or will it be used to subsidise research activity?
  

We have always argued that British students should go abroad for some or all of their undergraduate education for a variety of positive reasons. However, it now appears as if this will be a necessity for many people.

The introduction of higher fees will herald a new range of financial support for the least well-off in society. The most well-off clearly have the least to fear from increased interest rates on student loans as they are far less likely to need them. It is those students caught in the middle who are likely to find themselves squeezed the most. Lord Browne's report does offer assurances to students who will not go on to earn vast sums in their careers. The threshold under which students do not pay back their loans will rise as part of his recommendations. However, debt is still debt and there will be no escaping it particularly as students look to take on mortgages in the future. Student loans will no longer even have the attraction of being a cheap form of borrowing.

In the last week, following articles in The Observer and in an Independent supplement, we have experienced an unprecedented increase in the number of visitors to our site. We believe that vast numbers of the "squeezed middle" are looking to avoid the uncertainties of English higher education. Student debt is not a necessity; it is possible to gain a degree abroad without taking out huge loans. While it will never be possible to live free of financial obligations for three or four years, there is no reason why you should spend decades paying for them. We will be adding more opportunities of this nature to our site over the coming weeks.

Tomorrow the Election, Next Week the Tuition Fee Debate

One subject has been studiously ignored by politicians in the UK general election: what will happen to tuition fees over the lifetime of the next parliament and beyond. While many individual MPs and candidates have signed pledges indicating that they will not support an increase in fees from the current £3,000 plus inflation this is unlikely to have any impact on reality.

Without an alternative plan for funding the expansion of higher education it is almost certain that the cap on fees will be first raised and then removed. Otherwise we are likely to see more universities experiencing financial difficulties. The University of Cumbria has already applied for emergency funding from HEFCE and has had to reduce the facilities it offers students; while the circumstances of this situation are unique to Cumbria it is likely that other universities will face similar shortfalls.

One proposal put forward by Lord Browne,who chairs the cross party review, is that fees will be allowed to rise by £1,000 per annum until they reflect the cost of the relevant course. In this scenario we could end up with different level of fees to reflect the relative cost of teaching arts or sciences, for example. This would see British universities adopting the Australian finanical model.

This approach differs from lifting the upper limit to between £5,000 and £7,000 which had previously been thought the most likely outcome.

Uncertainty about tuition fees is likely to remain for some time. With all political parties having no immediate plans to reduce fees (any Lib Dem plan to phase out fees will take some time to introduce even in the event of their making substantial gains in tomorrow's election) the only certainty is that they will rise. The bigger issue in terms of access to higher education will be any change to the interest rate payable on student loans; this, too, it seems is likely to rise in the near future meaning that the overall cost of education will be even harder to judge.

What does this mean for international universities? Universities in Australia, New Zealand and, to a lesser extent, Canada and the USA will increasingly be seen as viable alternatives for those students who can finance their entire higher education from their own or their family's resources.

For European universities, we expect a continuing increase in interest not just to state universities but also to private universities. This trend is currently being driven by the shortage of places at British universities and many careers advisors in schools are actively looking to find places abroad for this year's school leavers. One of the unintended consequences of EU membership is that British students can find far more generous higher education opportunities in other countries. In that context perhaps the most important development in the last weeks has been the European Court of Justice's decision to allow some European countries to restrict the number of students coming from other EU member states.

Degree Exodus?

Well, that is perhaps stretching a point but an article in yesterday's Sunday Times(scroll to bottom for relevant section) shows that European universities are seeing an increase in applications from British students.

Universities in Ireland, The Netherlands, Denmark, Sweden and Norway are probably the most likely beneficiaries but English-language education in other countries such as France, Spain and Italy could also see an increase in applications.

I would suggest that the increase in interest is motivated primarily by the shortage of places available at English universities because the "study now, pay later" financial model that tuition fees and student loans facilitate means that very few students are confronted with the financial reality of studying in this country; failing to find a place is a very different matter. As indicated in our previous post, when the only careers advice available is to defer university entry, students will start to look elsewhere for support.

We have now reached the Easter holidays but in the last two months I have spent almost every day in schools throughout England. Some of these schools have mentioned that their students are all placed (subject to grades) this year. However, there are an increasing number of schools who are worried about their Year 13 students and we are finding a greater willingness to consider international education.

Introducing CERAM-ESC Lille, Cote d'Azur

One of the most frequently asked questions by British students is about the relative quality of international universities. League tables, whatever their strengths and failings, are a fact of life in the decision making process.

For this reason, we are always keen to work with higher education institutions that have a good, international standing. CERAM-ESC Lille offers British students the chance to gain a French Grande Ecole education, with all courses taught in the English language.

CERAM-ESC Lille offers courses in the following disciplines at undergraduate level:

• Business
• Communications
• Engineering
• Aerospace and Aeronautics
• Environmental Science/Marine Biology

Most degrees are offered as dual degrees where students spend two years in the south of France before heading off to partner institutions in countries such as the USA, Canada and Australia. Alternatively students can study in the South of France for 7 out of 8 semesters.

We are learning more about CERAM-ESC Lille all the time. Further details are available on our website here.