Differential fees: a flight of folly

If you want to cut fees to win back the youth vote, you start with the courses that give the lowest financial returns, right? At first glance, this looks like a good idea to a new Secretary of State. So we can forgive Damian Hinds for flying the policy kite of differential fees for STEM and arts degrees amid the announcement of the HE and Post-18 Review.

However, after even a moment’s thought, the idea collapses. It is a policy that is misisng a clearly defined intended consequence and yet would undam a flood of unintended ones. 

The problem is that all too often kite-flying ministers get distracted by the pretty ribbons floating in the breeze and they start trying to keep the mess of string and tissue paper aloft. Before they realise what they’re doing, their blue-sky thinking has turned into a bold idea of which they are the champion, a legacy-defining paradigm shift from which any retreat would be a U-turn.

For Damian’s sake – but, more importantly, for the sake of students, of universities, of taxpayers and of the economy – we need to nip this idea in the bud. Cutting fees for arts and social science degrees, but not for STEM, would be bad for all courses across the sector. It’s a direly dumb idea and here are just ten reasons why.

(1) Courses that are cheaper to run, such as arts, but which attract the same fees as more expensive courses make a greater contribution to the infrastructure and the cross-discipline services of unis, such as libraries, students unions, IT facilities, welfare, careers services, and so on. If you take away that contribution, those services would be cut, damaging the experience and outcomes for all students.

(2) Many STEM courses cost far more than £9,250 a year to run. Some receive some extra funding as a result, but often even that comes nowhere covering the marginal cost let alone the real cost. By cutting the funding from other courses that tops up the cost of those courses, ironically, it may well be those most expensive courses that get axed first. 

(3) Even if they weren’t actually axed, the cost of running STEM courses would need to be slashed to eliminate the cross-subsidy. Imagine doing mechanical engineering without ever getting your hands on any machinery or doing chemistry without access to chemicals. 

(4) If graduates from certain courses do genuinely earn less, charging them less does make sense. But, hang on, that’s exactly how the current loan repayment system works already. In fact, it’s designed to ensure you pay back more if earn more and pay back less if you earn less, regardless of what you studied. It seems fairer that a rich politician who studied history should pay more than a physics graduate who went into teaching. (And, by the way, the country is very short of properly qualified physics teachers.)

(5) If you make some disciplines more expensive, there are likely to be students who decide to opt for cheaper courses, looking at the ticket price in front of them rather than the potential financial return, which is far from guaranteed and is at best no more than hypothetical.

(6) The very students most likely to think like that are those for whom the cost is most important, ie. those from the poorest backgrounds. Disadvantaged students may well avoid STEM subjects in order to get a degree on the cheap denying them the supposed higher salaries and social mobility that wider access should be promoting. 

(7) A lack of diversity in the student intake would be bad for those courses and even worse for the career sectors they feed into. Drawing from a narrower pool of applicants is hardly likely to maximise the quality of those applicants. 

(8) Of course, I’m specualting about future applicant behaviours here. It may go the other way and, in practice, rather than courses becoming socially divided, instead the cheaper courses would simply become tarnished, second-class qualifications. (Indeed, ‘Veblen Good’ mentality is exactly why so few institutions price their course under £9k now.) Having an arts degree might single you out for derision – the butt of jokes about ‘only an arts degree, not a proper one’ – or at least for lower employment opportunities. It would exacerbate earning differentials in a spiral that would undermine some of our leading university depts & cutting off talent from creative industries, which just happen to be one of the UK’s most lucrative exports. 

Or maybe I’m wrong: we would get neither the social division across disciplines nor the demonisation of all cheap subjects. We might get lucky. On the other hand, we might get both. The avenue for avoiding disaster is dangerously, evidence-lackingly slim and doesn’t actually to lead to anywhere better than now.

(9) In order to decide which courses should be cheaper, the Government would have to use somewhat patchy data based on past graduates’ earnings. There would be a built-in assumption that employment and pay patterns from past, say, 30 years are a good predictor of the future. When you look at the 30 years before that, they weren’t.

(10) There is a radical shift going on in industry – big enough to be described as the Fourth Industrial Revolution – as automation, artificial intelligence and custom servicing become mainstream. Many in industry are predicting that the skill we’ll need most in future is creativity, at which humans – especially arts graduates – outperform machines and are likely to continue to do so for quite a while. 

It’d be an ironic shame if, in an attempt to turn students into salary-chasing units of supply, the Government ended up undermining our future labour market needs and damaging the lives of the very graduates whose votes they’re trying to win.

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