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A Massive Overhaul
England's universities are about to undergo the most dramatic restructuring since the 1960s

By Jon Marcus

A rare blue sky hangs over Bloomsbury, but the neighborhood around the University of London is virtually deserted. From the student union comes the sound of cheers and jeers, which lead to a dark, smoke-filled bar where what seems like the entire student body is watching India play New Zealand in the cricket World Cup.

The match distracts them not only from the sunny day, but also from an invitation to discuss the most dramatic shake-up of England's universities since the 1960s. That's because it won't affect them. Student fees will nearly triple, faculty pay will switch to a system of performance-based rewards, and enrollments will increase. The very structure of university financing, teaching and research will be transformed.

But most of these changes won't take effect until the 2005-06 academic year. So for these particular undergraduates-not to mention much of the rest of the world-it is an issue that has gotten scant attention.

The ideas of Nicholas Barr, a professor at the London School of Economics, have influenced reorganization of British higher education.
(Photo By David Levenson, Black Star)

"My sister is going to be affected by it," said undergraduate Carolyn Finn, looking up from a magazine and considering the question for a minute. "I think it's ridiculous that for the same education she will have to pay many thousands of pounds more."

Many politicians, faculty and parents feel the same way. There is no shortage of dissent over the massive overhaul of England's universities. In fact, few people actually seem in favor of it. But the broader political fallout of this vast reorganization has been muted by the war in Iraq and other news. And the wholesale restructuring of English higher education has hurtled forward not only essentially unnoticed, but also largely unchecked.

That changes are needed is not in dispute. Without action, universities face a $14.9 billion shortfall over the next three years. (Dollar figures in this article are based on an exchange rate of 1.67 dollars to the pound.) Years of budget cuts have left them with antiquated and overtaxed facilities.

Enrollment has soared. In 20 years, the proportion of English students going on to higher education has increased from one in eight to more than one in three. Faculty workloads are up while salaries have barely kept pace with inflation. Government funding per student has fallen from more than $12,380 to about $7,430 since 1989-a decline of nearly 40 percent.

The poor have been hurt most by this inadequate funding, said Nicholas Barr, a professor of public economics at the London School of Economics, whose proposals are widely considered to have influenced the government's planned overhaul of higher education. The proportion of university enrollment comprised of students from the lowest socioeconomic classes has not increased in 40 years.

But with the government already strapped for cash, Barr urged that students themselves be compelled to fill the funding gap-a radical idea in a country that until only five years ago provided not only free university education, but also student living stipends. Barr recommended that this be accomplished through loans that would be repaid after graduation, based on income. Students would borrow the money to pay for their tuition; as soon as their post-graduate incomes reached $24,975, they would begin to pay it back in increments depending on how much they made. Those who earned the most would have the largest monthly payments; those in lower-paying but "socially useful" work, the smallest.

"Those who can afford to pay more, do so, and only based on their income as a graduate, not their family circumstances as a student," Barr said. After all, he added, "students receive a significant private benefit from their degrees. Thus it is efficient and equitable that they should bear some of the costs."

Universities, in the meantime, would be free to increase their fees from the current $1,830 a year to a maximum of just under $5,000, depending on the quality of the school. Today, the costs are the same at every university. According to the plan, universities that want to charge the most will have to work harder to attract and maintain students, who will act more like consumers, demanding better teaching, and deciding for themselves whether a particular school is worth the money.

Charlotte Dawkins, president of the University of London student union, thinks the government should use tax revenues, not higher tuitions, to expand higher education opportunity.

"Once the changes are in place, students should enormously prefer the new system, which transforms their power," Barr said. Their preferences "will have more weight than under (the current system of) central planning. Universities will face strong incentives to give them such things as accelerated courses, part-time courses and evening teaching."

The so-called top-up student fees are expected to raise $1.5 billion a year after being introduced in 2005-06. To sweeten the pot, the government has promised to bring back grants, which were abandoned in 1998, of about $1,600 per year per student for living expenses, for students from families with annual income less than $16,650. It will also increase its contribution to higher education by six percent a year over the next three years, to a total of nearly $17 billion by 2006. "Nobody is talking about making students pay the entire cost of their degree," Barr said.

Still, not even the government seemed to expect much public support when it finally presented its long-awaited proposal, or white paper, on higher education in January-two years after Prime Minister Tony Blair had promised to fix the system. "The government believes that there is no painless way to put university and student finance on a sustainable basis," the report said.

The immediate pain was the Labour government's. It had managed to alienate virtually everyone, including its own back-bench ministers in parliament. One hundred seventy MPs-about 130 of them from Blair's own Labour party-signed on to a motion against top-up fees; by comparison, 102 opposed the controversial British involvement in the Iraq war.

"Do we want an American system? The answer is no," said Paul Farrelly, the Labour MP who led the revolt.

Labour Party MP Paul Farrelly opposes the government's proposals because they will force many students to borrow heavily to pay for college.
(Photo By David Levenson, Black Star)

Farrelly and other critics complain that the plan condemns students to debts of up to $34,965 in an already heavily indebted society (the government says the maximum student debt for higher education will be under $25,000, with an average of about $22,000). According to the opposition Liberal Democrat party, the average female graduate will never repay her debt, because the average woman's earnings are insufficient to keep pace with the interest on her loans; it will take 23 years, the party says, for the average man to repay his. This, the critics say, will discourage poorer students from going on to universities even as the government claims it is trying to attract them.

Only 15 percent of students from blue-collar families go on to universities in England (just ten percent at Oxford and nine percent at Cambridge, among the lowest proportions in the U.K.), compared to 81 percent of students whose parents are professionals.

"If we want more people to go to university, there needs to be an equivalent amount of funding," said Charlotte Dawkins, president of the University of London student union, in her office upstairs from the noisy televised cricket match. "Access by brains or bank account?" reads a bumper sticker on the door.

"You can't want to widen participation and in the same breath triple the burden of debt on the student," said Dawkins, who has been a leader in the movement against the government's plan. "The same families who have never sent children to university also have a debt aversion. And it doesn't even take into consideration that some cultures and faiths don't allow people to go into debt."

Basing repayments on income, she said, will discourage people from taking higher-paying jobs out of fear that their monthly installments will become too high (the government says the typical tab will be about $100 a month for people with moderate incomes in public-service jobs), returning England to a time when the private sector was made up entirely of the elite.

Dawkins thinks the higher education shortfall should be made up from taxation, not on the backs of students. "You're talking about a country that can find billions of dollars to go to war but can't afford to educate people," she said. "It's about priorities. Education is fundamental to the future of this country in lots of forms. That doesn't come cheaply."

The government has responded to complaints about access with the promise of an "access regulator," since formally renamed the Office for Fair Access, or OFFA, the first national regulatory agency to oversee any part of the British higher education system. Its job, the government says, will be to drive up applications to universities from disadvantaged people. The universities will have to commit to enrolling students from low-income families before they are allowed to raise their fees.

Earlier plans to more aggressively require that the universities be held accountable for enrolling students from underrepresented groups were dropped in the face of protests similar to the American backlash against affirmative action; along with concerns that students from the lower classes would be discouraged from going to a university by the prospect of debt, the fear suddenly arose among the middle class (fueled largely by the Daily Mail newspaper) that it would be harder for their children to get in.

When Labour higher education minister Margaret Hodge proposed a quota for low-income students, the resulting outcry forced her to reverse herself, and even Blair has said publicly that universities will be expected to choose their students based on merit.

That's all well and good, Farrelly said over tea in the House of Commons dining room. But higher fees, even in the form of loans, "are going to deter qualified students from going to university. If you look at the (United) States, if you look at Canada, if you look at Australia, statistics going back to the 1970s show that all those fears that we have in terms of access have been realized. So if [the government] wants to improve access, why is it going down that road?"

The controversy also raised questions about how effective OFFA could possibly be. These have since been answered by vague promises that universities that recruit too many wealthy students might be fined or stripped of their right to impose the higher fees, something that would cost Cambridge, for example, $30 million a year. Already, government funding for next year has been quietly shifted away from institutions with too many privileged students (including Oxford and Cambridge) to those that enroll larger numbers of non-traditional students.

MP Tim Boswell, education spokesman for the Conservative party, thinks the Labour government's proposals smack of "affirmative action," which he opposes.
(Photo by David Levenson, Black Star)

This, in turn, has drawn loud objections from the Conservative party and the universities themselves, which call the process social engineering. "We say, scrap the access regulator," said Tim Boswell, an MP, former education minister, and Conservative party spokesman on higher education. "The trouble with affirmative action is it is kind of a patch that stands in for something that should come up naturally." He says the Tories prefer objective tests to determine who is admitted to a university, and better preparation at the primary levels. "We are not against admitting based on potential," he said. "We are more inclined to leave this up to a decentralized measure at the individual university level. There's a difference between access and fairness."

That's what students at the nation's best universities think, too. In London, where the higher cost of living is already blamed for a dropoff of 14 percent in applications to the city's universities, the mayor held a forum entitled "London Falling" to protest the higher education reorganization. Angry that successive classes there would inevitably have to pay the maximum tuition, students at Cambridge heckled Hodge when she arrived to discuss the white paper; one stepped forward to hand her his Labour party card. "You haven't got a level playing field at present. Don't let's pretend we are creating a two-tier system if there is inequality at present," Hodge responded angrily. "People have pretended that every institution is the same, and they are not."

Boswell also objects to the government's plans to increase participation in higher education to 50 percent of people between 18 and 30, rather than the current 40 percent. Not everyone needs a university degree, he said, pointing out how hard it is to find a plumber in London; some people should be steered into vocational education. ("It's not brain drain," Boswell said in an interview in his office in Westminster. "It's drain brain.") He said the government's education plan originates from the "Islington mindset, the belief of educated people who think they know what's good for everybody else."

Professor Roderick Floud, vice chancellor of London Metropolitan University, looks forward to implementing the new plan.

The Conservatives want to make higher education in England free again by endowing universities with about $1.6 billion each, paid for by the sale of state-owned communications frequencies. They would also reduce costs by abandoning the government's 50 percent participation target, and by slimming down the university sector. And they would scrap the access regulator. (The Liberal Democrats also want to abolish tuition; they would raise more money for higher education by raising the tax rate on the wealthiest Britons to 50 percent.)

It is a considerably less hostile crowd that gathers across town at the wood-paneled British Overseas League, where there is a fire in the fireplace below a portrait of the queen. Here, after coffee overlooking Green Park, and before lunch in the Hall of India and Pakistan, the higher education establishment has gathered to consider how it will carry out the government's plan. "We've become rather bored with describing what's in the white paper," Professor Roderick Floud, chair of Universities UK and vice chancellor of London Metropolitan University, tells the friendly audience. "We're rather pleased to move on from that and consider how it is to be implemented."

The reorganization goes well beyond the question of who will pay. It ultimately envisions dividing higher education in England into a handful of elite research institutions, a group of leading research universities, a group of leading regional universities doing research and teaching, and a number of schools concentrating only on teaching-whose faculty would no longer do research.

Science funding is being increased by an impressive 30 percent over three years, to nearly $5 billion a year by 2006, but will be diverted only to those schools with the strongest research programs. This shift is already under way; even as they were stripped of some funding for teaching because of their poor records of enrolling disadvantaged students, Oxford and Cambridge this year got higher levels of research funding, while 50 other institutions saw their research grants decline, when adjusted for inflation.

The government also plans to spend $165 million a year to recruit and maintain top researchers, and to increase the minimum annual Ph.D. stipend to an average of about $50,000. That is intended to stop other countries from raiding British faculties, Lord Sainsbury, minister for science and innovation, told the Overseas League crowd.

"It's not expected that each institution will focus on all of the major policy goals, but on their strengths," said Sir Howard Newby, chief executive of the Higher Education Funding Council for England. "No institution is resourced sufficiently to do all of these things. That really is the structural problem we're faced with"-and have been since 1992, when all English universities were designated research universities.

This, too, has raised protests. Opponents complain that lopsided science funding will make a small number of universities as elitist as the higher fees will make their student bodies bastions of the upper classes. On this, even political rivals Boswell and Farrelly (who both attended Oxford) agree. "They've obviously been reading those academic papers that say there is a high correlation between world-class research and economic growth," Boswell said disapprovingly. He said Blair is obsessed with a competitiveness agenda. "It's an obsession with international comparisons and with Harvard," Farrelly echoed, "an obsession with the U.K. having universities compete with the likes of Harvard and Princeton. That's the wrong way of looking at your university system. If we have a fantastic university system, and as a byproduct of that some people win Nobel prizes, that's all well and good." Farrelly also derides the idea of divorcing teaching and research. "Good researchers make good teachers," he said.

A poll by the Association of University Teachers (AUT) found, not surprisingly, that 86 percent of faculty agree. They believe a link between teaching and research should be retained. In fact, unions representing more than 110,000 academics and five million students have now pronounced themselves "utterly opposed" to the reorganization plan. The AUT says the plan will offer "differential access for students and an impoverished professional life for staff." Professors and university staff in London held a series of one-day strikes over pay, donning academic robes and handing out peanuts.

Rubbish, says the government. It says students should be able to evaluate teacher quality, and that teachers should be paid based on performance. To help make sure this happens, it promises additional funding for a teaching quality academy and professional development fellowships. "I was told by a senior official of the Association of University Teachers that lecturers at Luton and Oxford do the same job and hence should broadly be paid the same," said Nicholas Barr. "This is like saying that David Beckham and the right-side midfield player at Torquay United should be paid broadly the same since both train four times a week and both play games that last for 90 minutes."

The government also wants universities to solicit individual and corporate contributions toward endowments, which are comparatively tiny in the U.K. A study in March found that the value of all U.K. endowments collectively is less than what the top 500 U.S. institutions lost in the stock market last year. Even the two best-endowed British universities, Cambridge and Oxford, would come in 15th if ranked with universities in the United States. Oxford and Cambridge have endowments per student less than one fourth that of Harvard, and the U.K. university with the third-highest endowment, the University of Edinborough, one-sixty-first as much.

Here, too, there is dissent, however. Cambridge, which has an endowment of about $3 billion, says it fears the Labour party thinks endowments can excuse the government from paying for higher education. "Building significant endowments is important, but it cannot relieve the government of making sensible and effective arrangements for investment in higher education by taxpayers in general and students and their parents in particular," the university said. Meanwhile, business officials say substantial tax changes, which the government has not proposed, are needed to encourage private giving.

The debate is now heading in many directions at once. Education secretary Charles Clarke has stoked another firestorm by suggesting that the public should not fund what he calls "ornamental" subjects such as medieval history. "I don't mind there being some medievalists around for ornamental purposes, but there is no reason for the state to pay for them," he told a university assembly. He also said that studying the classics is a waste of time. A Cambridge medievalist shot back that Clarke was a "philistine thug."

Universities say the reorganization will not provide them with enough money. Employers say widening participation will water down the value of a university degree. An American academic at Oxford has urged that the university go private. Other opponents say it is morally wrong to charge for higher education, and warn that the national health service will be next. And there are new fears that all universities will charge the maximum $5,000-a-year fee, wrecking plans to establish a differentiated system based on quality and future earnings potential. At least three out of four universities already say they want to charge the full amount. "They have to, because it's a statement," said Charlotte Dawkins. "If you don't do it, you're saying you're not worth it."

A politics graduate, Dawkins is done with her university education. The increased costs will not apply to her or her older sister, who is now a dentist, though they will affect a younger brother. If the higher tuition were in place when she was deciding on a university, she said, "I don't think the choices would have been as easy as they were. I guess I still would have been able to go, but my parents would have had to make lifestyle choices that I don't think this government has the right to require us to make."

Jon Marcus, editor of Boston Magazine, also covers U.S. higher education for The Times of London.

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