An Alternative To Free Education

Free Education

There has been a debate in the west around making education free. In many instances, it has gone beyond debates and into legislation. In the US, New York became the first state to offer free college tuition. In the UK, the Labour Party pledged to abolish fees entirely in their 2017 manifesto.

Education is considered key in reducing inequality. Empirical research has shown increasing returns to education in terms of income. Education also has an element of being a public good. Many governments across the world have made education a basic right. However, with rising costs of private education and limited capacity of public institutions, it is becoming more and more exclusive. Student-debts keep piling on and remain a burden long after students have graduated. Those who champion the cause of free university education cite reasons such as rising inequality in higher education access and falling enrollments. High fees are a financial barrier which exclude those with disadvantaged backgrounds. On the other hand, fees are also a tool that allow the education sector to flourish and grow.

It is important to then ask if free education is the ONLY way to not only protect current levels of enrollment but also encourage and even see an increase in enrollment. While constructing projections and estimates based on extensive surveys is one way to do, another way is to look at outcomes in education systems that have transformed. One such system is the English higher-education system. Many researchers have spent time studying the English education system’s transition from a no-fee, low-aid university system, to one with one of the highest tuition fees in the world.
The education system underwent a series of reforms over many years. The main objective was to create an inclusive system with high quality.

In May 1996, the then Secretary of State for Education and Employment, Gillian Shephard, commissioned an inquiry into the funding of British higher education over the next 20 years. In 1997, the committee submitted a report stating additional billions of funding would be needed over the period. Almost £350 million would be required in 1998-9 and another £565 million in 1999-2000 to expand student enrollment and ensure adequate infrastructure while supporting students. Given the huge sums of money required, the committee explored the idea of charging fees. Their observations were as follows:
“20.40 We do not underestimate the strength of feeling on the issue of seeking a contribution towards tuition costs: nor do we dispute the logic of the arguments put forward. A detailed assessment of the issues has, however, convinced us that the arguments in favour of a contribution to tuition costs from graduates in work are strong, if not widely appreciated. They relate to equity between social groups, broadening participation, equity with part-time students in higher education and in further education, strengthening the student role in higher education, and identifying a new source of income that can be ring-fenced for higher education.
20.41 We have, therefore, analysed the implications of a range of options against the criteria set out in paragraph 20.2. There is a wide array of options from which to choose, ranging from asking graduates to contribute only to their living costs through to asking all graduates to contribute to their tuition costs. We have chosen to examine four options in depth”

The first reform was in 1998 where tuition fees were introduced at £1000 pounds a year was charged. The immediate effect was that the system became exclusive as only the rich could afford it. As the government observed this, in 2006, the government brought about the second reform where fees were hiked to £3,000 per year, but this was not to be paid upfront. Students could take an ‘interest free income contingent loan’ to be repaid upon graduation only by those who earn over £10,000 per year. The last reform was in 2012, where the fees were again hiked to £9,000 per year linked to an income-contingent loan.

England’s transition from a free higher education system to a high-fee, high-aid system has had many positive effects. Not only has there been a substantial increase in university enrollment rates but the system has also become more inclusive as participation of students from the poorest backgrounds have increased. The gap between rich and poor students have reduced since the reforms.

So, what exactly did the reforms do to achieve this impact?

As students didn’t have to pay anything upfront, the burden of fees reduced dramatically. The income contingent loans provide a safety net for students and make the system more inclusive. As the system also started rolling out aids and other student friendly instruments, student found themselves with access to money to help support them during the education period. amounts of liquidity to support themselves through university. The key to the success of this entire system is the income-contingent loan system, which enables students to safely borrow against their future incomes.

-Contributed by Bhargav Dhakappa

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