What I got wrong about tuition fees

Some honesty is needed to get universities out of the hole they're sinking into

A march against Tony Blair’s tuition fee rises in 2006

My very first substack post was about how to change your mind. In it I used university tuition fees as an example of a topic where I was re-thinking a view I’d held strongly for many years. During the two big political rows about fee rises under Tony Blair and then David Cameron’s Coalition I took the government’s side. I was in favour because I felt it would achieve two important policy goals: providing additional funding for universities and enabling more students from low-income families to gain places. And it did. Which gave me confidence it had been the right call.

Over the past few years, though, both these gains have been threatened by changes to the repayment system. Funding has fallen sharply with many courses around the country closing. I’ve also realised I was too dismissive of two other factors. First, the impact on younger graduates when combined with the rising costs of housing and childcare. It has undoubtedly contributed to the generational distributional problem I’ve discussed before. Disposable income for 25-34 year olds is completely stagnant in real terms since 2007/8; for over 65s it’s up 25%. Tuition fees is one reason why.

The second thing I missed is the culture shift reforms would trigger in universities. This is less about tuition fees per se than the overnight introduction of fierce competition for students it allowed. I had thought concerns about competition were wrong headed – surely “marketisation” was just another way of saying universities would have to pay more attention to the student experience? How could that be a bad thing? But I hadn’t thought through what that would mean in practice given the incentives in the system.

That said the alternatives to the current system all come with their own problems. Indeed they could easily make things worse: it’s not like the previous model worked well. There’s no simple solution here. But that doesn’t mean nothing can be done, or nothing should change. As should hopefully be clear by the end of this post, the current trajectory is unsustainable.