Financing Higher Education: Answers from the UK

By Nicholas Barr; Iain Crawford | Go to book overview
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Professor Lord Desai

This is the book that launched a revolution, one that is yet to finish its course, but I have no doubt that it will come to fruition. Like Lincoln Steffens I have seen the future and know it works. Indeed I had my first glimpse of the future in 1988 when Nicholas Barr, as a younger colleague at the LSE, sent me the first draft of his paper on loan-funded higher education. It was the summer holiday, in France, which for a university academic meant spending the time reading, writing and catching up with academic work not done in term-time. The proposal was quite innovative and I was immediately engaged by it. Nick Barr was exploring whether one could charge for higher education by giving income-contingent loans to the students in higher education, who (if full time and not 'mature') were then receiving it free. As a member of the Labour Party - and indeed Chair of one of its constituency parties - I was perfectly entitled to wear blinkers and argue that free higher education for all was the core of our beliefs, or of the British welfare state, or of socialism. Some of my House of Commons colleagues did just that when the Higher Education Bill was finally introduced early in 2004. But I knew then, as I know now, that we do not have universal free higher education at all. Only those who went on to higher education immediately after A levels were likely to receive full funding from their Local Education Authorities. The rest - part-time or mature students, or those in further education - were likely to be charged a fee. I did not cavil at the Barr idea because I knew that higher education, far from being a necessity, is a career choice. It benefits the receiver in terms of higher income over the life cycle of employment. Thus, while higher education may benefit society by various externalities, it is also a gift to those selected to receive higher education. Are the recipients deserving? This is where the debate gets muddied.

As of now the middle classes (A and B, and a few C1 in occupational categories) are overrepresented in higher education, and thus prima facie the gift of free higher education is a regressive transfer. The working-class students (C2, D and E) do not get their proportionate share. Originally this had nothing to do with fees charged, because if they qualified to go in at 18 years there was no fee; and there was until 1998 a maintenance


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Financing Higher Education: Answers from the UK


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