In a period of spending cut backs, the government has sought to shift a greater part of the cost of university education onto students. In the UK, the government have phased out grants and introduced top-up fees. No longer is university education free, increasingly students have to pay an increased part of the cost.
Reasons for Free University Education
- Positive Externalities of Higher Education. Generally, university education does offer some external benefits to society. Higher education leads to a more educated and productive workforce. Countries with high rates of university education generally have higher levels of innovation and productivity growth. Therefore, there is a justification for the government subsidising higher education.
- Equality. There is also a powerful argument that university education should be free to ensure equality of opportunity. If students have to pay for university education, this may dissuade them. In theory, students could take out loans or work part-time, but this may be sufficient to discourage students from studying and instead may enter the job market earlier.
Why University Education Shouldn’t be Free
- Opportunity Cost. If we spend billions on free university education there is an opportunity cost of higher taxes or less spending elsewhere. Arguably, there is a greater social benefit from providing vocational training – e.g. so people could become plumbers, electricians e.t.c. There is often a real shortage of these skills in an economy. There is not a shortage of people with non-specific degrees.
- Higher Quality of Education. The rapid rise in university numbers means that higher education is taking a bigger share of the budget. If universities can charge students, it will help maintain standards and quality of teaching.
- Makes People Value Education More. If people have to pay to go to university, you could argue that they would value the education more.
- Signalling function of higher education. Arguably, higher education acts as a signal to employers that graduates have greater capacity. People who gain a degree, end up with a relatively higher salary. Therefore, if they financially gain from studying at university, it is perhaps fair they pay part of the cost. This is especially important for middle-class families, who send a higher proportion of people to higher education.
Another issue is whether we need 50% of 18 year olds to go to university. The increase in student numbers is a significant contributory factor to the increased financial pressures on universities. Rather than encouraging students to automatically go to university (as some schools do), it would be better to encourage more students to take vocational training and avoid three years of academic study. If less went to university, it would mean the cost per student would be relatively lower.