Commenting on reports that the government may limit the number of
foreign students coming to the UK, author of the IEA paper
Setting Universities Free, said:
“The government’s behaviour towards higher education is
contradictory. On the one hand it says that universities are one
of the country’s great strengths and, on the other, it caps
tuition fees while inflation is high, thus starving them of
income. Then, when the institutions try to survive by recruiting
more international students, the government indicates it will
make that harder.
“Understandably, there is no money in the kitty to splash out
on the sector but there is a Conservative alternative – set them
free to decide tuition fees but make them earn the money directly
from home students by issuing loans that do not carry a taxpayer
subsidy.
“Minister for Higher Education , in his first speech in the
post, said that getting graduates good jobs is a key objective,
but he put forward no proposals to achieve this.
“Incentivising universities to provide courses which result
in graduating students obtaining lucrative employment is the way
forward, benefitting the student, the university and the taxpayer
while making it possible to reduce immigration.”
Key points:
- Tuition fees for domestic undergraduates have been frozen at
£9,250 – the 2017 level - until 2024/25.
- Given that inflation erodes the value of the fee each year,
universities could be losing £4,000 per student by 2024/25.
- Universities have responded by recruiting more international
students where fee levels are not capped.
- As international students, and any family members that
come to the UK with them, are treated as immigrants, this has
contributed to high levels of net migration.
- The government, keen to reduce immigration, is now floating
the idea of preventing some universities from recruiting
international students, or at least making it more difficult.
- This could force some universities into bankruptcy.
- The government should allow universities to charge enough
from home students to make their teaching viable while limiting
the cost to the taxpayer.
- Immigration can then be reduced without putting the sector at
risk.
- This can easily be done by copying the approach for
postgraduate education – where universities are free to set any
fee level, but the government loan is fixed.
- To ensure that applicants from all backgrounds have access,
the universities would be obliged to offer their own loans to
students, so that they have a real incentive to ensure that
graduates enter worthwhile employment and so repay the loan.
- If this approach is adopted and the government loan freeze
extended beyond 2024/25 the government could save £60 bn and more
– making tax cuts or other spending possible.
ENDS
‘Setting Universities Free: How to deliver a sustainable student
funding system’ is available to read here: https://iea.org.uk/wp-content/uploads/2022/10/Setting-universities-free.pdf
