GLOBAL: Fees converging - and rising

Fees in American and European research universities are showing signs of convergence and the start of a 'big curve' in pricing, say researchers at the Center for Studies in Higher Education at the University of California, Berkeley. John Aubrey Douglass and Ruth Keeling studied pricing trends among a sample group of 24 public and private research universities in the US, all with a wide array of graduate and professional programmes, and a smaller group of EU universities.

The CSHE says this work represents an important contribution since previous research has not studied the fee rates of comparative research universities. Previous research on tuition pricing has focused largely on bachelor's degree programmes, not on rapid changes in tuition and fees for professional degrees which, Douglass and Keeling argue, are the forerunners of a larger "big curve" in pricing.

Douglass, from Berkeley, and Keeling from Cambridge University, identify a pattern of convergence between US public and private institutions while noting that these trends are also occurring among EU universities. They theorise that the charges imposed by the major research universities for their courses are increasingly influenced by "levels of market tolerance" and are driven in part by the perception that "cost confers quality and a corresponding level of prestige to consumers".

But the researchers also note: "It is our impression that pricing is arguably being set and influenced by government underfunding of higher education, and by a process of incremental policymaking, generally lacking a coherent policy approach."

They acknowledge that the recent implosion in credit markets may seriously shake this emerging pricing model as it is increasingly dependent on students taking out sizeable loans. The results of the study, however, indicate the long-term trends in pricing will continue as institutions look at what their competitors are charging for specific degrees and programmes in the global market. Moreover, the trends will also influence the entire higher education market.

Fee increases in the UK and the US are based, in part, on a simple proposition, says the report: since the private benefits of higher education will continue to grow, students and their families should bear a larger burden of the educational costs, as is happening in both countries.

The authors say that charging fees has long been a delicate political issue in Europe, one that has only been broached carefully and diplomatically in earlier European Commission studies. This political hesitancy continues, they say, before concluding:

"Barring a revolution in the funding predilections of governments within the EU, diverse fee rates for university studies will become ever more part of the higher education landscape in Europe, and European universities will be confronted with fee models, pricing decisions and distribution dilemmas which have long been familiar to their US counterparts."

*The Big Curve: Trends in university fees and financing in the EU and US www.berkeley.edu

diane.spencer@uw-news.com