As a candidate at the recent General Election, I supported tuition fees but the current proposals give more than pause for thought. Indeed, to my mind there are a number of important issues they fail to address that all relate to the economic trajectory our country will take for the next several decades.
The psychological barrier that high levels of debt will present to many students from lower income backgrounds is perhaps most concerning, I am not sure I would have taken my place at Oxford if I had had to have to pay back loans in excess of £40,000. For a 17-year-old from a lower income family these sums may prove too scary a barrier to university. They also imply a much narrower range of career options than many will feel comfortable with. It may be the case that many Oxford graduates earn premium salaries but no one should feel under pressure to take a job in law, accountancy, banking or the like in order to repay huge debts.
A degree is supposed to increase life options, not narrow them and by discouraging students from poorer backgrounds we are doing our country a huge disservice by cutting the pool of potential talent on which our economy is ultimately dependent.
We also risk sending bright students from all backgrounds overseas. A higher rate of interest on loans payable by graduates who earn higher salaries will encourage many of our brightest to look abroad for their degree, putting at risk the economic benefits we hope to derive from their education. Why not broaden your horizons by studying at an Ivy League college where endowments and scholarships are much larger than in the UK, will be the question many will ask. A rate of interest linked to future earnings encourages just such a trend.
Charging differential rates of interest on loans also ignores the fact that those who derive an economic benefit from their time at university typically already pay this back via a higher marginal rate of income tax. The fact that I have paid more in income tax than, for example, friends who work in the voluntary sector, is partly a function of the value society places on financial services but also my good fortune to have received a first class education. The quid pro quo must surely be some sort of recognition that just as I benefited from a university education, so too am I making at least a commensurate economic contribution towards the cost of such.
More broadly, a dramatic increase in tuition fees fails to recognise the potentially huge benefits conferred on society by graduates, benefits that go beyond the crude tax take and include often ground-breaking economic, social and cultural advances. I have just returned from a two week business trip to India and Hong Kong. Trade missions may be important to the here and now but what is much more important is that UK PLC is able to produce the goods and services emerging economies will demand as their middle classes grow. The United Kingdom may not be a manufacturing giant but it can be a leader in technological and scientific innovation. If we want to have home-grown Googles and Apples we need to address university funding on the basis of the vision we have for our long term economic competitiveness.
A mistake many businesses make during a down-turn is to cut muscle, along with or instead of fat. Often these cuts involve parts of the business where the net effects are only felt long-term and with the Market increasingly short-term, businesses are sadly almost encouraged to do so. Economic growth must be at the top of any government's agenda and indeed, the fact that economies grow fast when social mobility advances is an important part of our own recent history. Discouraging those from lower income backgrounds, implicitly or explicitly is long-term very damaging and is a cut into our muscle we cannot afford,
There is a sound economic justification for ensuring that university education is free at point of access, if not entirely, then at least for those from lower income backgrounds, perhaps on a sliding scale, and/or for courses that are deemed strategically important for future economic and cultural growth. Tuition fees are a necessary evil but draconian hikes that implicitly discourage many of our brightest from applying, encourage them to study and consequently work overseas, and ignore or marginalise their near and long term contribution to society are not the answer.