Higher Education Funding

There has been a lot of comment over the last couple of weeks from different groups about who should be paying for Higher Education. These comments have generally indicated that there are three beneficiaries of education: the state, the individual, and the employer; however employers are not taking a direct responsibility to pay for it. With the Higher Education funding review underway and due to report back in the Autumn, I have been thinking how this might be addressed and how it might possibly affect the work that I do.

I think the idea of a £10,000 a year tuition fee scares people, yet that is a very round-about annual fee for a private school and it costs universities significantly more than that to educate students. At present, the rest of the funding comes from government or research council grants, but I think the HE sector needs some more transparency for people to see the true cost of higher education, rather than believe that universities get by on £3,225 a year per student. This transparency can extend further too, beyond degrees to include any vocational or professional development traning provided to make people better qualified or more able to do their jobs. If the true cost is clear from the start then it makes it easier for us to talk about who is paying for it.

The student loan system has the advantage that students have to take some responsibility for the funding of their education; the rate is more than competitive and they only have to repay it when they are benefitting financially. However, it does not show how much the state has paid for them and absolutely does not put any pressure on employers to even acknowledge the expense. I think there is scope for the student loan scheme to be extended so that anyone undertaking training can apply for it to be paid for through that system. Ultimately, they have the responsibility to pay it back anyway and as long as there are safeguards on the system it could work very well.

A lot is spoken about the value of a degree, however this is often done in terms of employability and seen as a requirement to get a better job. However this isn’t really the case, a good degree, or indeed good vocational training, gives someone the skills necessary to pursue a long and productive career. This training shouldn’t stop after three years – it should continue throughout someone’s career, as they look to add new skills and take on new opportunities. Some employers shirk all responsibility for professional development, however some have very well developed CPD or graduate entry schemes and this is to be commended.

The bottom line for me is that employers should contribute. They benefit directly from having an employee who has more qualifications and better skills. However, this benefit is clearly restricted to the time the employer will employ this person. A lot of risk exists in training staff who could then move to a different employer as soon as the training has been completed. I don’t believe the right solution is to contract people to ensure that any investment can be redeemed before the employee moves on. Something needs to be done across the board, or specifically with respect to the individual’s debt. Either an employer tax, which could be written off for companies already investing heavily in graduate schemes or CPD, or an employer contribution to the student loan. This does not have to be significantly high (I, for example, currently only pay £72 a month back), but could easily be matched by an employer and would half my student loan.

This transparency should help us as a nation understand what the true value of higher education is. At present, it is estimated that the financial benefit over the course of your career is around £100,000. If your education costs you £30,000 then you stand to benefit anyway. However, so does your employer, and surely they should be as responsible as you are for paying for it?

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