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US: What can the US approach to fees teach the world?

What lessons higher education in the United States can teach either the coalition government in the UK, higher education practitioners trying to come to terms with the coalition's policies or other countries considering the issue of how to raise tuition fees and ensure open access to higher education, is hard to tell.

Among reasons for hesitating to jump to conclusions, the most obvious is that the United States' federal political system is very different from that of countries like the UK.

Public universities are not nationally run but state-run institutions and states have been treating their public institutions very differently.

Michigan, at one extreme, has all but privatised its flagship university in Ann Arbor, cutting back on state support but allowing the university to charge out-of-state students as much as the market will bear - just about $50,000 a year for tuition, room and board - and placing few obstacles in the way of expanding their number.

At the other end of the spectrum, Wisconsin has kept a tight grip on its Madison flagship, faculty salaries have become uncompetitive, the university has suffered a brain drain to better-heeled institutions, and it has slid down the national rankings in consequence.

New York, which has the largest state university system in the country, is home to a notoriously dysfunctional legislature. The university system has been waiting in vain to be given the freedom to charge higher tuition fees and adjust the proportion of in-state and out-of-state students it takes. Meanwhile, New York University's Albany campus has become a by-word for reckless cutting in humanities by closing most of its modern languages departments.

Not only have different states behaved very differently, the gap between private and public institutions has grown wider. Although many institutions suffered spectacular losses during the financial crisis of 2008 - Harvard briefly losing an amount almost equal to the combined endowments of Oxford and Cambridge - the richest had made such advances in the previous decade that it was very soon onward and upward once more.

Ivy League universities provide needs-blind support on a scale that staggers the imagination of those outside the US. Harvard and Princeton guarantee that no family earning $180,000 or less will pay more than 10% of its household income; students from families earning well above the median may not only get their tuition, board and lodging free, but get book allowances and travel to and from home paid as well.

It's often said that no UK university could 'go private' in the sense of doing without teaching funding from the Higher Education Funding Council. Inasmuch as the University of Buckingham has been doing it for years, blanket claims of that sort are misguided. The London School of Economics could do it tomorrow without any difficulty.

Oxford, Cambridge, and their London peers are another matter. The cost of good science education is very high. If the average cost of a student at Oxford is around £16,000 a year, it's a safe bet that most science degrees cost almost £20,000 a year to deliver.

The deterrent to 'going private', however, is not the difficulty of closing the gap between what it costs to deliver a degree and what students and their families can be expected to pay; between endowment income, fund-raising and a system of student loans, that can be handled. The deterrent is the fear that the government would instruct Hefce and the funding councils to cut off the universities' research funding. The London School of Economics aside, that would do three or four times the damage that forgoing the teaching grant would do.

In any event, not all American private institutions are doing well. Even well-heeled liberal arts colleges such as Williams College in Massachusetts have been forced to cut back on student support, and to worry about how much they will have to spend on meeting the financial needs of their entering class. After a few years during which outright grants began to replace loans, the tide has turned back towards more loans and fewer grants.

How some very small and not very academically demanding colleges survive is mysterious; most have very limited endowments, and most have to offer substantial discounts on their advertised costs of tuition, board and lodging to fill an entering class. Their faculty are badly paid, they are often in places where the cost of living is very low, and they do not teach much laboratory science, but even so it is hard to see how they make ends meet. Sometimes, of course, even venerable institutions go under, as Antioch College did in 2007 - though it will reopen this autumn.

Meanwhile, the running debate over the performance of the 'for-profit' sector continues. This is an area where there are some obvious implications for the UK. The coalition government has slowly begun to realise that its funding policies will cost vastly more than it had been expecting; and it has been hoping that the for-profit sector will provide competition to existing higher education institutions and keep a lid on the fees those institutions will charge for their degrees.

The US evidence should frighten them. Although it is true that the for-profit sector educates a lot of students - the University of Phoenix is as big as the State University of New York - its ability to do much for social mobility or to keep down costs is dubious. 'For-profits' have made a lot of money for their shareholders, but the money has come out of the taxpayers' pockets in the form of student loans, and the students have had a hard time finding the sort of employment that would enable them to pay back those loans.

From a student's perspective, there's no mileage in going with 'for-profit' in the UK; the annual cost of repaying a loan is unaffected by its size, and although the repayment period is affected, it has an absolute terminus of 30 years even if not a penny has been repaid.

US student loans are very different; they are like credit card debts, and can readily get out of hand. In any case, the value of a degree is in employment terms a matter of how far an employer values it, and that's a matter of what an employer thinks of the institution that awards the degree. It's likely that in some areas, a 'for-profit' will be entirely credible, in the way that an institution like the College of Law is today, but that they won't make inroads into the market for broad-gauge undergraduate education.

Perhaps the most obvious, if most dispiriting, implication of American higher education for UK observers is just how little impact higher education has on social mobility.

Just as in the UK, examination success - in the SAT and the other secondary school tests - reflects a combination of parental income and parental education; just as in the UK, the amount that students learn in their higher education years reflects the extent of their preparation in school.

Affirmative action may have all sorts of benefits, but in academic terms, few students do much to catch up with their better-trained peers; just as in the UK, drop-out rates in the US are a function of previous educational disadvantage.

The moral, if there is one, is that a more equal society would produce a more equal higher education system; hoping, as the UK coalition government appears to do, that bullying universities into changing their admissions policies will achieve a more equal society looks like whistling in the wind.

* Alan Ryan was Warden of New College, Oxford, and professor of politics at the University of Oxford. He is currently a lecturer at Princeton University.
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