University Education has been a hot topic as governments increasingly struggle to find the funds for universities. In the UK, the government is increasingly shifting the burden on to students and their parents. With the expansion in student numbers the problem is likely to become more pressing. What is the best way to fund University Education?



Firstly, should University Education be free at the point of Use?

- Arguments for free education
- Arguments against free education

Personally, I feel that the external benefits of university education are relatively low. Most of the benefit from university education accrues to the individual. There is an opportunity cost of spending on university education which is reduced spending on other areas. Arguably, the government would be better off investing in primary and secondary education, rather than trying to make university education free for everybody. Furthermore, with the rapid expansion in university numbers, the idea of free education for all becomes more difficult to make a reality.

Methods of Paying for University education.

Higher Tax

The government could increase tax to fund university education, but, I feel with demographic changes placing greater demands on government spending. It would be better to use tax increase to spend on public transport, health care. To increase tax rates for university education would be to place an undesirable burden on the taxpayer.

Student loans

At the moment, student loans play an important role in financing university education. One benefit is that students don't have to pay back until they are earning a certain amount. However,

• Going into debt may discourage students going to university
• Debt can create stress
• There is a high % of defaults on student loans.

Graduate Tax

This raises revenue by charging extra income tax on those who benefited from universities. This would be equitable in the sense that income tax is progressive, taking a higher % from high earners. Students may argue it is unfair. But, if a university degree increases their earning potential there is some justification in making them pay part of that extra earning potential. I prefer a graduate tax to student loans.

Reduce Number of Students going to university.

• Should 50% of the Population be going to University?

Labels: higher education

At the moment the UK government has a target for 50% of school leavers to enter university.

But, is this necessary or desirable?

• The UK has a shortage of plumbers, electricians and nurses. Encouraging people to take a degree will not solve these shortages.
  
• A highly skilled workforce is essential to a successful economy, but, it is not clear that university education is the best way to create a highly skilled workforce.
• Some argue the primary benefit of higher education is as a signalling mechanism. i.e. a degree signals more ability and capacity, but, it does little to increase labour productivity directly. (this, of course, varies between subjects e.g. medicine)
• Perhaps, greater emphasis should be placed on practical, vocational training. This does not require 3 expensive years of higher education, but, the benefit to the economy is more direct.
  
• Also, with an ageing population, an increase in the student population will further reduce the already shrinking labour force. This will put further pressure on government finances.
  
• Everyone should have the right to go to university, but, that does not mean we should encourage everyone to spend 3 years studying at university.
  
• Perhaps university should remain selective. Why do we want someone with 2 Es at A level to spend another 3 years studying? If a student gets say DDD at A level, I really don't know how helpful it is for them or the economy to spend another 3 years of academic study.
• University education is very expensive. An expansion in student numbers means that resources will be more stretched. The government want more people to go to university, but, they don't particularly want to pay for it. The result is we have an expansion in university numbers, but, a declining ratio of teachers per student. Is Quantity really preferable to quality?
• If the number of students going to university is decreased (or kept constant) it will be easier to finance it. But, if the % going to university increases to 50% it will require higher top up fees or more taxes.
• In the UK, there is still an element of class status about getting a university degree. Somehow getting a degree helps you enter the middle class. There is nothing wrong with this attitude, but, I think it is a mistake to undervalue vocational training qualifications such as becoming and electrician.
  

What do you think? Is it desirable to encourage more people to go to University?


It is worth noting that many of our competitor economies have a much higher % of students going to university. Some argue the low % of students going to university is responsible for holding back the UK economy

Labels: higher education