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Britain Looks to Graduates to Pick Up the Tuition Tab

LONDON — What is a university education worth? Who derives the benefits? And who should pay for it?

These were just some of the questions that pushed their way onto the front pages here last week after the publication of “Securing a Sustainable Future For Higher Education,” the results of a yearlong inquiry into higher education and student finance in Britain.

Better known as the Browne Review after the inquiry’s chairman, John Browne, the former head of BP, the report called for the cap on tuition fees at British universities, now set at £3,290, or $5,275, a year, to be scrapped in favor of a free-market approach paid for by the students themselves — but only after they graduate and are earning more than £21,000 a year.

“Students do not pay charges, only graduates do; and then only if they are successful,” the report said. “The system of payments is highly progressive. No one earning under £21,000 will pay anything.”

Lord Browne added in an interview with the BBC, “If you choose to go into a job which doesn’t pay very much or if you choose to go out of the workforce to build a family, you won’t have to pay it back.”

In addition to recommending that students bear a larger share of the costs, the report also called for increased student choice in higher education. It suggested this be done partly by allowing the more popular educational institutions to expand to meet demand, partly by mandating a uniform standard of information (including likely future earnings for each course) be made available to prospective students, and partly by proposing to expand the total number of university places by 10 percent over the next three years.

The report also proposes that part-time students should be treated the same as full-time students financially. (Under the current system, full-time students in Britain are given a government loan to cover the full costs of tuition; part-time students are required to pay their fees in advance.)

Tuition fees would be limited only by what the market will bear — though if universities were to charge above £6,000 a year the government would claw back a portion of the increase to pay for the costs of providing up-front finance. Fees at Oxford, Cambridge and other members of the Russell Group of 20 leading British universities are widely expected to quickly rise above £10,000 a year, with less prestigious institutions presumably charging considerably less.

If implemented, the Browne Review’s suggestions will reshape the landscape of British higher education — and perhaps act as a spur across Europe, where global competition for the most talented students has left many countries wondering whether their own approaches to higher education are sustainable. Ireland, which abolished tuition fees in the mid-1990s and is now facing an acute shortfall in public funding for education, is paying particularly close attention to developments in Britain.

“The world has moved on,” said Ellen Hazelkorn, head of the Higher Education Policy Unit at the Dublin Institute of Technology. “Universities here think they’re going to keep getting the same level of support from the state. There’s not a hope of that.” Yet any party that re-introduces tuition fees would be signing its own death warrant. “Politically it’s almost impossible,” Dr. Hazelkorn said.

The politics aren’t much easier in Britain, where all 57 members of Parliament from the Liberal Democrat Party — the junior partner in the country’s coalition government — last month signed a pledge to abolish tuition fees. But Vincent Cable, the Liberal Democrat who serves as Business Secretary, last week called that promise “no longer feasible,” telling the House of Commons he found Lord Browne’s proposals “fair and affordable.”

David Willetts, the Universities Minister, said last month that he hoped to be able to implement the overhaul by the start of the 2012 academic year, which would mean legislation drafted and approved by Parliament in the coming year. But with the Labour Party favoring a graduate tax — a method of paying for education considered and rejected by the Browne review — and many Liberal Democrat members saying they still oppose any increase in tuition, the government will have to fight — and possibly make compromises — to get any bill through.

In his recent memoir, former Prime Minister Tony Blair writes that he came closest to losing his own job not over the Iraq war but over an earlier increase in tuition fees, when a government with a 167 vote majority scraped through by five votes.

According to Andreas Schleicher, an official in the education directorate of the Organization for Economic Cooperation and Development, the answer to who pays for higher education depends largely on how society views the benefits. “In the United States and Japan university education is viewed as a private good — something whose benefits accrue mainly to the individual,” he said. “So in those countries student fees can be very high, and are paid either by the students themselves or by their parents and families. In Japan a whole extended family can be expected to contribute.”

Dr. Schleicher contrasts this with “the Nordic model, where they believe higher education is a social good, like clean water or paved roads, so they make it free for everyone, paid for by high progressive taxes. For people from disadvantaged social backgrounds, who may be nervous about accumulating high levels of personal debt, this approach eliminates the risk factor.”

Denmark, Finland, Iceland, Norway and Sweden currently do not charge any fees for university education.

Dr. Schleicher gives the existing British system high marks. “It’s a question of where you make the dividing line between social benefit and individual benefit,” he said. “Having tuition fees lets students share some of the costs; a high level of government subsidy lets you address questions of equity and access.” But in an interview in advance of the Browne Review he seemed to endorse many of its changes as well. “The current system isn’t differentiated,” he said.

With government block grants paid directly to universities providing the bulk of funding, there is little incentive to respond to changing student demands.

Letting “funding follow the student,” as the Browne Review proposes, would encourage innovation, he said. Allowing successful universities to expand “lets you influence the supply side as well,” he added, and universities who demonstrated “skills in caring for disadvantaged students” could be rewarded with additional funding.

Though the report calls for current levels of government funding for higher education to be maintained, that seems unlikely given the coalition government’s commitment to cutting 25 percent across the board from most government departments. Even if public investment in education could be protected, the report calls for the funds to be directed mainly toward science, technology, medicine, nursing and “strategically important” languages. Subjects such as literature, classics or history would presumably have to get by with less.

Yet any move to reduce university funding is liable to meet bitter opposition — not just from students and faculties, but from politicians who point to figures showing that while the public cost of university education across the members of the O.E.C.D. is about $36,000 per student, the public returns (in the form of higher tax receipts and social insurance payments and lower transfer payments) is $86,000.

In Britain the figures are $95,000 on an investment of about $45,000 per student. But with the O.E.C.D. also showing a financial benefit to the individual student of $207,000 for British men, and $153,000 for women, who obtain a university degree over the course of a lifetime, Ellen Hazelkorn at the Dublin Institute of Technology says that she, too, has “come round to the idea of cost-sharing.”

Free well-funded university education “would be lovely,” she says, “but you try to get higher taxation through the legislature of any country right now.”

A version of this article appears in print on   in The International Herald Tribune. Order Reprints | Today’s Paper | Subscribe

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