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University funding system in England is “not sustainable”

 University World News      |    6  December 2014

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The funding system for higher education in England is not sustainable and a better funding model must be developed, according to a critical report by the Higher Education Commission.

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Too good

The UK coalition government’s decision to allow fees to triple in 2012-13, and the system of student loans and grants developed alongside the hike, was supposed to lead to a more marketised system of higher education, raising standards while pushing prices down, resulting in better qualified graduates for less money. The report concludes:

This has not happened. Introducing market forces to a sector that does not operate as a market puts the financial sustainability of the sector at risk; the commission recommends retreating from this notion.

The reports says that with little in the way of career advice or access to information, students do not feel or act like consumers and brand plays too big a role in the decision of which university to go to. Demand continues to outstrip supply and there is less choice for students than is perceived.

The “experiment” underway in higher education could have “consequences stretching decades into the future”, the report warns.

Other areas of concern include the mismatch of a rapid expansion of undergraduates and a decline in postgraduate and part-time students.

The rapid undergraduate expansion, the potential decline in quality for students and the lack of control on public funding of student loans puts the financial stability of the sector at risk, the report says. It also warns that the student loan book should not be sold to fund expansion in numbers.

The report found that research funding has been eroded as a result of inflation, and is becoming more concentrated.

The report makes 16 recommendations and examines six alternative models of funding but does not take a position on which one should be followed.

It says it has become clear that different funding structures will benefit different parts of the sector – students, universities or government – and it is very difficult to choose a system where all benefit. Who should benefit and who should bear more burden must be a political decision, the report says.

It concludes that the current funding system represents “the worst of both worlds”.

The commission fundamentally questions any system that charges higher education at a rate where the average graduate will not be able to pay it back.

We believe that higher education in England makes an enormous contribution to the prosperity and well-being of the country. While the questions it faces over funding are intractable, it is essential that policy-makers and politicians confront them.

 See
Too Good to Fail: The financial sustainability of higher education in England
An unloved orphan
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