The funding system for undergraduate teaching in UK universities has drifted into crisis. Bolder changes might now be worth the risk. One option is to recast the system as students investing in their education through an advance of their anticipated higher pay. Graduates would pay much more than now, but for a much shorter time. Universities price courses in terms of this future salary share and share in the financial risks of things not working out. Government provides the infrastructure and working capital, together with targeted tax relief, but with an aligned and broadly self-funding system can be relaxed again about leaving universities to grow opportunities as they see best.
In July 2023 HEPI kindly included in their twentieth anniversary essay collection my analysis of why the UK HE sector could be seen as being in a funding crisis. A real one this time.
It set out how high inflation had ignited the long-smouldering problems in the university funding system for full-time undergraduate teaching. Students not getting the places they want, or resentful of the costs if they do, or increasingly both. Universities being forced to either select on ability to pay, or cut the quality of provision, and often an uneasy mix of both. And governments feeling trapped by uncapped escalating mammoth expenditure coming with a design that manages to combine keeping its considerable generosity well hidden whilst offering no sense of control over what the money buys. After demonstrating that none of the responses available to universities look like they might work, I suggested that the moment when a more comprehensive rethink of how we fund higher education might be worth the risk was fast approaching.
