The immediate problem facing the universities is that of top-up fees. When they were introduced in 2004, the bien pensants were loud in their condemnation: applications to university would evaporate and Britain would be reduced to an uneducated Dark Age where only bankers' children could afford to study after the age of 18. In the event, applications have soared. But, with the recently announced government budget cuts, the fees need to rise urgently.
Lord Browne has been asked to advise the government on the issue, and it is understood that both major political parties will accept his recommendations, thus avoiding the horror of 2003 when Tony Blair's advocacy of top-up fees was countered by a Conservative party that maintained that markets were bad things which true Tories would always oppose. Browne will presumably advise raising the top-up fees to at least £5,000 a year, and yet again the bien pensants will cry panic.
But the private return in terms of salary on a university education exceeds the cost of that education, just as the private return on a mortgage in terms of capital gain exceeds the cost of the mortgage, and people will need no incentive to buy their university education or their house.
Changes, though, will have to be made to the loan system. Rightly, no one needs to pay fees upfront, and students are loaned the costs of their fees, which they have to pay back only after they have started to earn more than £15,000 a year.
But the current system, by which the government's loans are made at rates of interest so low that it is paying a greater rate of interest to borrow the money in the first place, will have to be reformed: the government can no longer afford to subsidise students further.
British universities today should not complain about the cuts in government budgets but, rather, of the limitations the government imposes on their economic and administrative freedoms. It is the Ivy League, not the nationalised universities of continental Europe, that should be their lodestar. From medieval times the state has been the enemy of the universities-let the universities distance themselves from it.
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