Free Economics Essays - What are the arguments for and against the government's proposals for university top-up fees?
In this essay I will be discussing the arguments for and against the proposal of top-up fees put forward by the government. However, firstly, I will briefly describe what the top-up fee is.
The top-up fee is a fee that universities can add on to the existing course fees. How much they decide to add on is dependant upon the individual university. Universities will be able to charge anything upwards to £3000 per year. The fees would be covered by loans, which are repayable once the graduate is earning upwards of £15000 per year. These top-up fees are set to be implemented in England, Wales and Northern Ireland in 2006.
Arguments for top-up fees
In this section I will discuss the arguments put forward for the introduction of these top-up fees.
One argument for the introduction of top-up fees is the fact that many Universities are suffering from a funding crisis. Universities need more money, money that the Government cannot afford to give them. A figure of around £10 billion is being widely used to descried the shortfall higher education is suffering. This figure is reported in an article on www.socialist.net, however, many other sources will have the same information. Increasing the fees seems to be a good way to gain that extra funding. Opponents to the top-up fees believe that a graduate tax would be a better way of providing the extra funding. However, this method would not be able to provide the funding immediately. According to an article Woodward (2002), ‘the most serious obstacle to a graduate tax is that it takes an age - up to 20 years on some calculations - to deliver the extra money the universities need now.’ The universities need the extra funding now. Top-up fees can provide the required extra funding immediately. An article by Hibbert (2004) supports the introduction of top-up fees. In this article he is talking about Imperial College of Science, Technology and Medicine. The article states that the college will provide scholarships to poorer students. This is funded by the extra funding provided by the introduction of top-up fees.
The Government argues that the proposal of top-up fees will not dissuade individuals from poorer backgrounds applying to higher education. They argue this because under their proposal the Government will offer a loan to students to pay for the fees. This will not need to be paid back until the graduate is earning upwards of £15000 per year. Interest on this loan will only be inline with inflation. Also, the Government plans to provide bursaries to those individuals from the poorest background of up to £1000 to aid them with their studies. As the loans they are receiving of the Government are repaid inline with income then this will avoid the issue of financial burden in future life. Graduates will only pay back the loan when they can afford to do so. If in future life circumstances change and income falls then repayments will lower or stop dependant on the size of the loan.
An article by Schwartz (2003) claims that the idea of debt aversion is not a realistic argument against top-fees. He claims that this is ‘based on simplistic surveys of what people say, not what they do.’ He claims that people would not like to go into debt, but often do in order to get what they want or need. This is true in the mortgage market. People from poorer incomes are just as likely than people from higher incomes to apply for a mortgage.
Another argument for the proposal of top-up fees is that the debt that the graduate will accrue will be manageable, as graduates often go on to earn higher salaries than those without a University education. This would mean that the burden of the debt is offset due to the higher income. Related to this, the Government argues that since graduates benefit from higher education financially then they should pay for the privilege.
The Government argues that the country needs more graduates. They argue that more graduates will lead to a higher pool of skills that will lead to a more healthy and faster growing economy. This view is supported by surveys carried out by the World Bank. These surveys state that countries with a better education system seem to have healthier, faster growing economies.
Another argument for the introduction of the top-up fees is that of the power of the top Universities. The Government wants higher education to be available to all, no matter what their background is. However, the top British universities had formed a group known as the ‘Russell Group’. They argued that unless they received more money, they would be unable to compete with Ivy League universities in the States. They were trying to obtain permission from the Government to charge fees of £15000 plus a year. This would mean that these universities could only attract those with money and the issue of elitism would arise. This would go against what the Government is trying to achieve with regards to access to higher education for all. The Government and other parties agree that places should be awarded to students who have the ability and not based on the amount of money they have.
Arguments against top-up fees
In this section I will discuss the arguments against the proposal of top-up fees. Looking at a variety of material I can see that the main argument against the proposed top-up fees is the fact that it will discourage those from poorer backgrounds going into higher education. This argument is backed up by a quote by Sally Hunt, the general secretary of the AUT. She said that, ’fees would dissuade those from poor-to-middle income backgrounds from entering higher education.’ Arguments say that the individuals from a poorer background will not be prepared to enter into higher education only to be in increased debt later in life.
This leads onto another argument against the top-up fees. It is that of increased debt. After the top-up fees are introduced opponents of the proposal say that graduate debt will increase dramatically. According to a report by the National Institute of Economic and Social Research (NIESR), at this moment in time the average graduate debt is around £9744. After the implementation of the top-up fees it is estimated, by the NIESR, that the average graduate debt will increase to around £15000. An article by Wragg (2004) agrees with the notion that the debt of the students is a bad thing. He sums up this argument with a clever phrase based on an old Heinz advertising slogan, ’Feez Meanz Debtz’.
Another argument that relates to that of money is the argument of elitism. It is argued that if Universities can charge up to £3000 per year then the top Universities might use this fact to only offer places to the people who can afford them. More often than not the people who can afford them come from the private schools; people who are in the higher levels of society. It is argued that the introduction of the top-up fee will lead to a two-tiered university system. An article on www.socialist.net supports this view of the two-tiered elitism argument. This article states that the introduction of top-up fees will, ‘introduce a two-tier system in higher education (HE), with ‘good’ universities charging more than ‘bad’ ones.’ Another article by Charles (2004) also supports this view of elitism. In the article she is talking about how, after the introduction of top-up fees, top law degrees will be more expensive to take. She discusses a survey that states that, ‘prestigious law schools such as Bristol, Cambridge, Durham and UCL, said they were either definitely or likely to cost their law degrees at the maximum £3000’.
Of course there are some authors who argue that paying for an education should be available to all and be absolutely free. This goes against the argument put forward by the Government, which states that the graduates benefit financially and should pay for the privilege. One of these authors is Wragg (2004). He argues that all the arguments both for and against the introduction of top-up fees have distracted from the issue that education is the ‘birthright’ of every citizen.
Another argument comes from the average person on the street, the taxpayer. These people argue that the Government should not be paying for people to be educated at University. They feel that it is their money and it should be spent elsewhere, like in the health care sector or the police. This attitude probably comes about because of the negative reputation students seem to have. Students seem to have the reputation from people that have not been to university as lazy. Also, related to this point, the loans only have to be paid back when the graduate is earning above £15000. If the graduate does not earn over £15000 then they do not have to pay it back. This could mean that some graduates will be getting a free education. Students who study such courses as Fine Art or Media Studies might not be able to use these degrees in the real world to obtain high salaries. They will be in the same situation as individuals who have not gone on to higher education. Also, how will repayments be collected if a graduate decides to work abroad?
Another argument against top-up fees is more of an indirect argument. The Government state that top-up fees will help them achieve 50% of school leavers going to university. Arguments against this state that sending people to university who are lacking academically will leave them in debt and low on confidence. This leads to the argument over so called ‘Mickey Mouse’ courses. These courses will leave the graduates with skills that employers do not seek. This view is supported by an article Frost (2005) who states that, ‘'Mickey Mouse' courses have also come under fire: allowing a student to do a course employers have no interest in or respect for is not only a waste of the student's time, but also of their money.’
Conclusion
In conclusion, I can see that there is many arguments both for and against the proposal of university top-up fees. The main arguments the Government and supporters of the top-up fees put across for the introduction of top-up fees is that the higher education system is currently in a funding crisis, with a £10 billion shortfall. Also, the Government feels that graduates benefit financially so they should pay for the privilege. Also, the Government feels that they need more graduates in the country in order for the economy to grow faster.
Arguments against the proposed top-up fees seem to concentrate on the issue of the increased debt the graduates will face. They feel that this debt will dissuade people from a poorer background from applying to the fear of debt. However, the Government and other independent studies have shown that many people are prepared to go into debt in order to achieve their goals in life. Other arguments against top-up fees include those of increased changes of elitism and people that believe that education should be completely free. Also, many people have concerns on the fact that the loans the Government gives out to students to pay these fees will not be paid back.
References
http://www.warwickboar.co.uk/boar/business/the_truth_about_topup_fees
http://www.aut.org.uk
www.socialist.net
Schwartz S. (2003) Fees: fact and fiction. A graduate repayment system is fair and effective. The Guardian
Wragg T. (2004) University should be a birthright. The Guardian
Woodward W. (2002) Top-up fees could cost New Labour dear. The Guardian
Frost V. (2005) The case against variable top-up fees. www.telegraph.co.uk
Charles G. (2004) Top-up fees to be sky high on law degrees. Lawyer, Vol. 18 Issue 13, p5
Hibbert L. (2004) Backing the bill. Professional Engineering, Vol. 17 Issue 4, p24
