Or Why Every Employer Should Pay a Graduate Levy
Whatever figure emerges from the bruising political battle ahead to set the level of fees at universities in England, whether it is £5,000, £7,000 or, God forbid £10,000 a year, it is clear that the overriding guiding principle now is that the individual, as the main beneficiary of degree-level education, should be the one who pays for it.
There is no longer even lip service paid to education for its own sake. Even the 1990s argument of an educated population contributing to higher GNP, and a more competitive economy, particularly as Europe and America watched the rise and rise of the Asian economies, seems dated.
But there are several problems with the user-pays principle. The first is that as more and more young people have degrees – and in countries like the US, Sweden and Finland the figure is approaching 70%, the measurable benefit to the individual, the so-called lifetime earnings premium, has been going down.
T he previous British Government under Tony Blair based its arguments for a fee hike in 2005 on the amount a graduate can earn over a lifetime compared to a non-graduate as calculated by the OECD. The OECD estimates were based on the lifetime earnings premium for graduates during the 1970s-1990s, which were already out of date by 2005. The OECD has not been keen to publicise the rapidity with which that premium is declining in post-industrial economies, but at least, in its latest Education at a Glance 2010 snapshot of education indicators, it now admits that it has decreased in Britain, Sweden and New Zealand.
The lifetime earnings premium, while relatively high in the US and UK is much, is much lower in countries like Sweden, Denmark, New Zealand and Norway - countries. Could that be because they are more egalitarian societies, where the salary of the lowest paid and the highest paid are not so wide apart, than because their degrees are worth so much less? It is also possible that lifetime earnings figures are skewed by large numbers of highly paid people in financial centres such as London and New York. The point is that the difference in graduate and non-graduate earnings over a lifetime are based on more than the possession of a degree itself. The OECD acknowledges that when it says than the premium for women is a whole lot lower than for men. Yet no one is arguing there should be fee-discounts for women students.
As the premium declines, there may well be a time when it is almost negligible, compared to the cost of a degree itself. This has already happened in England for male humanities graduates. Yet you can bet your bottom dollar, university fees will continue to go up and up even as the earnings premium goes down. Even if the government has to justify hikes by relating fees to earnings premiums, universities do not. They want to get as much as they can, any way they can. They want the power to levy their own fees, and they want it now.
There is another problem with the user pays principle. As more jobs which previously did not require degree level qualifications – nursing in particular comes to mind – now require an increasingly expensive degree; and as the cost of education and training is transferred from companies and employers to the institutions, the user-payment burden is skewed strongly and unfairly towards the individual forced to take out bigger and bigger loans against future earnings.
Employers are saving an awful lot of money on training and in-house education. They may argue that they pay in the form of higher salaries for graduates, but it is clear it has become harder to move up the career ladder without paying for a qualification upgrade yourself. The rise and rise of the MA and now the second masters or mid-career MA testifies to that.
Graduates know about the dearth in training only too well, because those companies who do provide fantastic entry-level training programmes are the most sought after of all with 100s of applicants per place and rising. Employers have been able to get away with this for some time because of the ease with which they can hire from overseas, fully trained, and probably more experience for a lower salary than domestic graduates.
Everyone pays taxes that go towards universities, even if their own children do not attend. Those who do attend pay a great deal, financed by loans. That sounds about right when you consider that all of society benefits from universities. But who gets off scott-free? It is the employers of course. The biggest beneficiaries, including banks, multinationals and oil companies, who not only save shed-loads on educating managerial talent, but also shiploads on research and development carried out by universities.
While increasingly transferring their responsibilities for education and training onto the state and the individual and for more and more jobs – even the receptionist has a degree these days - employers have not been ask to stump up their fair share of the cost of higher education. Every single company – and yes, even charities and government departments – should be asked to pay a levy for every graduate they hire. And that levy should be divvied up to universities who in turn would use it to subsidise fee levels.
Then, and then only, will it be fair to say those who benefit most from higher education, pay the most.
Showing posts with label tuition fees. Show all posts
Showing posts with label tuition fees. Show all posts
Sunday, 3 October 2010
Sunday, 15 November 2009
Are University Vice-Chancellors the new Bankers?
We may not stop loathing bankers any time soon, but we might have a new hate-figure: university vice-chancellors on fat salaries intent on pushing up university tuition fees when they come up for review sometime next year.
Why do VCs want families currently forking out £3,200 a year for an undergraduate degree, to pay £7000-£20,000 a year in tuition fees in addition to the income received from taxes? They all say it is so that universities can remain “world class”.
But the real reason, many including junior lecturers suspect, is so that vice-chancellors and other senior university staff can increase their pay. Earlier this year a number of institutions were forced to freeze VC pay after an outcry by lecturers and students over the higher-than-the-prime-minister pay of many VCs, and many-times-higher-than-inflation pay rises over the past few years.
The prime ministers remuneration is emerging as a benchmark for many top public sector salaries, whether they are universities, the BBC, or other civil servants. Everyone who earns more than the PM must now justify it. VCs earn on average £194,000 a year including benefits. That’s £10,000 more than the PM. A number of top-hitting VCs draw more than £300,000 a year from the public purse.
That may seem a lot to you and I and the PM, but for VCs it’s peanuts when across the Pond almost two dozen college “presidents” earn over US$1 million. When VCs say world class, they really mean world class lectures and tutorials, they mean world class salaries.
Their argument for “deserving” this is similar to the argument used by bankers: if they don’t get big bucks, they’ll leave for the countries where they can. But all is not well in the land of academia-honey, where salaries are the world class benchmark. Students and families are up in arms in California in ferocious protest against a 30 per cent tuition fee hike. They are out in the streets, perhaps for the first time since the Vietnam war. That’s a pretty serious protest, and not one that VCs want to see here.
The Netherlands, the first European Union country to introduce tuition fees in the mid-1980s, increased them by around 5-10 per cent a year. But in the mid-1990s when the government proposed a 50 per cent fee hike, students blocked railway lines, bringing transport to a halt. The government was forced to back down, finally agreeing to a 25 per cent fee rise over three years.
If anything that should indicate the limits to world class fee rises. Yet in this country VCs seem to think increases of 100 per cent or more are realistic.
The government is attempting to call their bluff somewhat, by focusing on value-for-money education after embarrassing parliamentary committee hearings on dumbed down university exams, and institutions that provide only two hours of tutor-student contact time for £3,200. But VCs continue to push the notion that world class universities don’t come cheap. Recently they even evoked the twin globalisation bogeymen hoping to frighten us into emptying our pockets. India and China will “catch up and overtake” us if we are not careful. Now, anyone who has seen the average university lecture theatre in Beijing or Delhi will be stifling their guffaws, only to be laughing on the other side of their faces when they realise this argument is seriously being used to make us pay more towards tuition.
I am no expert on the world class university, so lets hear from the experts:
“There is no universal recipe or magic formula for making a world class university, but nonetheless, one cardinal rule seems to be that money alone will not buy you a coveted spot on the annual list of the world’s elite institutions,” said Jamil Salmi in his report for the World Bank on “The Challenge of Establishing World Class Institutions,” hot off the presses this summer.
World class status is not achieved by self-declaration either, the report notes. Rather, elite status is conferred by the outside world on the basis of international recognition.
I’m willing to go with the World Bank on that. But the World Bank does say that a major feature of worldclassness is the ability to attract talent from other countries and yes, big research budgets do count.
So lets examine that, because VCs have been saying they will lose the best talent to “abroad” without higher tuition fees (read VC salaries). Cambridge University VC Alison Richard was lured back to Britain from Yale University in 2003, which is the opposite direction to what VCs are saying. And for more than a decade, English universities have been a magnet for academics from the rest of Europe. The brain gain in favour of Britain has far, far outweighed the brain drain in the last 15 years, even without high tuition fees. We’ve even gained scientists from the US, because during the Bush era, stem cell research was a no-no in the US, but was flourishing here.
But back to the people who count: those who want an education and have to pay for it. World class university status is irrelevant to the majority of school leavers who are applying for undergraduate degrees in their own country. What matters to them is the national standing of the university – and as it happens, we have four universities in the world’s top ten, not just world class but world leading, for them to aspire to. Postgraduates and researchers look at courses in different countries before making a choice. But postgraduates are already charged “the market rate” in England, so the link between fees and worldclassness is not really about them.
World class is really not about class or standards at all. It is a euphemism for the “global market”. A recent study John Aubrey Douglas at the University of Berkeley and Ruth Keeling at Cambridge University found that university fees are driven up towards to what the student “market” will bear, not just within countries but globally. The higher the price, the better the institution, the market seems to believe. In the US “pricing equals prestige” is now the major influence on fees for graduate students, in particular for professional degrees such as medicine, law, engineering and business, the study of two dozen universities in the US and Europe concluded.
This trend, which started in the US, is now becoming apparent in Europe, often, the study notes, irrespective of any link with the quality of the teaching or with institutional costs. In fact, the authors detect a “growing disassociation between pricing and the actual costs of an educational programme.”
The problem with these trends is that they are dependent on students taking out huge loans and believing that future earnings will help them pay them off. That belief has been severely shaken by the recession. Despite the recession, the study predicts that institutions that are globally competitive will continue to “look over their shoulder at what their perceived peer or near-peer institutions are charging for specific degrees and programmes.” That does not bode well, if say, the US emerges from recession long before we do.
Some universities are even using the recession as an excuse for wanting to charge more, because university budgets - paid out of taxation - are being squeezed.
Andrew Oswald, professor of Economics at Warwick University (whose vice chancellor is one Prof. Nigel Thrift, oh the irony of it) wants it both ways. “It would help if there was more public sector funding in Research and Development, but students need to pay for their own education,” he told the Daily Telegraph.
Demanding more public funding while wanting pay levels like the private sector? Very much like bankers, then.
Why do VCs want families currently forking out £3,200 a year for an undergraduate degree, to pay £7000-£20,000 a year in tuition fees in addition to the income received from taxes? They all say it is so that universities can remain “world class”.
But the real reason, many including junior lecturers suspect, is so that vice-chancellors and other senior university staff can increase their pay. Earlier this year a number of institutions were forced to freeze VC pay after an outcry by lecturers and students over the higher-than-the-prime-minister pay of many VCs, and many-times-higher-than-inflation pay rises over the past few years.
The prime ministers remuneration is emerging as a benchmark for many top public sector salaries, whether they are universities, the BBC, or other civil servants. Everyone who earns more than the PM must now justify it. VCs earn on average £194,000 a year including benefits. That’s £10,000 more than the PM. A number of top-hitting VCs draw more than £300,000 a year from the public purse.
That may seem a lot to you and I and the PM, but for VCs it’s peanuts when across the Pond almost two dozen college “presidents” earn over US$1 million. When VCs say world class, they really mean world class lectures and tutorials, they mean world class salaries.
Their argument for “deserving” this is similar to the argument used by bankers: if they don’t get big bucks, they’ll leave for the countries where they can. But all is not well in the land of academia-honey, where salaries are the world class benchmark. Students and families are up in arms in California in ferocious protest against a 30 per cent tuition fee hike. They are out in the streets, perhaps for the first time since the Vietnam war. That’s a pretty serious protest, and not one that VCs want to see here.
The Netherlands, the first European Union country to introduce tuition fees in the mid-1980s, increased them by around 5-10 per cent a year. But in the mid-1990s when the government proposed a 50 per cent fee hike, students blocked railway lines, bringing transport to a halt. The government was forced to back down, finally agreeing to a 25 per cent fee rise over three years.
If anything that should indicate the limits to world class fee rises. Yet in this country VCs seem to think increases of 100 per cent or more are realistic.
The government is attempting to call their bluff somewhat, by focusing on value-for-money education after embarrassing parliamentary committee hearings on dumbed down university exams, and institutions that provide only two hours of tutor-student contact time for £3,200. But VCs continue to push the notion that world class universities don’t come cheap. Recently they even evoked the twin globalisation bogeymen hoping to frighten us into emptying our pockets. India and China will “catch up and overtake” us if we are not careful. Now, anyone who has seen the average university lecture theatre in Beijing or Delhi will be stifling their guffaws, only to be laughing on the other side of their faces when they realise this argument is seriously being used to make us pay more towards tuition.
I am no expert on the world class university, so lets hear from the experts:
“There is no universal recipe or magic formula for making a world class university, but nonetheless, one cardinal rule seems to be that money alone will not buy you a coveted spot on the annual list of the world’s elite institutions,” said Jamil Salmi in his report for the World Bank on “The Challenge of Establishing World Class Institutions,” hot off the presses this summer.
World class status is not achieved by self-declaration either, the report notes. Rather, elite status is conferred by the outside world on the basis of international recognition.
I’m willing to go with the World Bank on that. But the World Bank does say that a major feature of worldclassness is the ability to attract talent from other countries and yes, big research budgets do count.
So lets examine that, because VCs have been saying they will lose the best talent to “abroad” without higher tuition fees (read VC salaries). Cambridge University VC Alison Richard was lured back to Britain from Yale University in 2003, which is the opposite direction to what VCs are saying. And for more than a decade, English universities have been a magnet for academics from the rest of Europe. The brain gain in favour of Britain has far, far outweighed the brain drain in the last 15 years, even without high tuition fees. We’ve even gained scientists from the US, because during the Bush era, stem cell research was a no-no in the US, but was flourishing here.
But back to the people who count: those who want an education and have to pay for it. World class university status is irrelevant to the majority of school leavers who are applying for undergraduate degrees in their own country. What matters to them is the national standing of the university – and as it happens, we have four universities in the world’s top ten, not just world class but world leading, for them to aspire to. Postgraduates and researchers look at courses in different countries before making a choice. But postgraduates are already charged “the market rate” in England, so the link between fees and worldclassness is not really about them.
World class is really not about class or standards at all. It is a euphemism for the “global market”. A recent study John Aubrey Douglas at the University of Berkeley and Ruth Keeling at Cambridge University found that university fees are driven up towards to what the student “market” will bear, not just within countries but globally. The higher the price, the better the institution, the market seems to believe. In the US “pricing equals prestige” is now the major influence on fees for graduate students, in particular for professional degrees such as medicine, law, engineering and business, the study of two dozen universities in the US and Europe concluded.
This trend, which started in the US, is now becoming apparent in Europe, often, the study notes, irrespective of any link with the quality of the teaching or with institutional costs. In fact, the authors detect a “growing disassociation between pricing and the actual costs of an educational programme.”
The problem with these trends is that they are dependent on students taking out huge loans and believing that future earnings will help them pay them off. That belief has been severely shaken by the recession. Despite the recession, the study predicts that institutions that are globally competitive will continue to “look over their shoulder at what their perceived peer or near-peer institutions are charging for specific degrees and programmes.” That does not bode well, if say, the US emerges from recession long before we do.
Some universities are even using the recession as an excuse for wanting to charge more, because university budgets - paid out of taxation - are being squeezed.
Andrew Oswald, professor of Economics at Warwick University (whose vice chancellor is one Prof. Nigel Thrift, oh the irony of it) wants it both ways. “It would help if there was more public sector funding in Research and Development, but students need to pay for their own education,” he told the Daily Telegraph.
Demanding more public funding while wanting pay levels like the private sector? Very much like bankers, then.
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