The case for requiring undergraduate students to contribute to the cost of their tuition is now widely accepted. Lifetime earnings premiums of between £100,000 and £200,000 from undergraduate study are typical and, whatever the merits of government support for specific groups of students, it is difficult to make a case that all students should have all their fees financed by the taxpayer.
Unfortunately the government’s mechanism for charging students has hit the buffers. Fees are now capped at £3,225 and the Treasury is frightened of the cap being raised. There are sound educational arguments for raising it. The fee cap leads to overseas students paying much more than home students, and this distorts university recruitment policies.
The cap leads to direct government subsidy of university places and this, in turn, leads the government to restrict the number of places on particular courses, preventing successful courses from expanding and others from contracting. There is also an equity argument in favour of raising the cap – why should poor taxpayers pay for the education of those with much better prospects?
Read the rest of the article in The Independent.