More countries consider turning to tuition fees to achieve sustainability

By Martin Whittaker. As nation states contribute less and less to higher education amid the fallout from the Eurozone crisis, Europe’s universities are anxiously seeking new, sustainable forms of funding.
And increasingly they are looking with interest at England as a model, where the burden of paying for higher education has passed from state to student. From September 2012 England’s universities will begin charging students up to £9,000 (US$14,000) a year in tuition fees. So are fees the future? The sustainability of Europe’s universities was on the agenda at the European University Association’s annual conference at the University of Warwick, UK, on 22-23 March.
According to EUA research, the impact of the economic crisis on public funding of higher education in Europe has so far hit hardest in the UK, Ireland, Latvia, Italy, Greece and Hungary with cuts of over 10%, while countries such as Spain, The Netherlands, Slovakia, Lithuania, Estonia and Romania are not far behind, with cuts of 5-10%. A conference working group on sustainable funding examined several higher education systems in Europe, their experience of introducing tuition fees and some lessons learned.
Professor Sir Steve Smith, vice-chancellor of the University of Exeter, spoke about the politically contentious introduction of fees in England (Northern Ireland, Scotland and Wales have separate tuition fee systems).
Tuition fees of £1,000 a year were introduced by the UK’s ‘New Labour’ government for the first time in 1998 against a backdrop of falling state funding and rising student numbers, and student grants were replaced by student loans. In 2006 fees tripled and in 2010, under a new Conservative/Liberal Democrat coalition they increased again, with universities allowed to charge between £6,000 and £9,000 a year. And while the UK government expected only the top universities to charge up to the full £9,000, most are now charging this from September 2012. What impact has this had on student numbers, particularly those from poorer backgrounds? Applications generally for 2012-13 are down by 9%, although for the lowest socio-economic group the decrease is just 0.2%, Smith said. He attributes this to the fact that students only begin repaying when their income goes above £21,000 a year.
“The really big change is that funding has moved from the state to the student,” he said. “Government funding for teaching is cut by 80%, the block grant is gone, and it’s the students who now pay up to £9,000. And they increasingly see themselves as customers.”
Austria saw a similar shift from public to student financing of higher education as fees of €350 (US$470) a semester were introduced for the first time in 2001, only to be abolished again in 2009. Christoph Badelt, rector of Vienna University of Economics and Business, said that, after fees were introduced in 2000, student numbers initially dropped but then increased again. “There was no significant impact on student participation as a consequence of the introduction of tuition fees,” he said. Finland lies at the other end of the spectrum on tuition fees to England, with taxpayers footing the bill for all higher education, whether bachelor level, masters or Phd. Students also get around €500 a month in study grants and housing supplements. A 2009 reform created the country’s first two private universities, and they are now running a government pilot, in which they can charge €8,000 for masters students from non-EU countries. Finnish students oppose the trial, believing this to be the thin end of the wedge. Hannu Seristö, vice president of Knowledge Networks, Aalto University, which is running one of the pilots, said rather than application numbers falling with the introduction of fees, generally they have increased.
“The quality of applicants has also gone up,” he said. “Maybe non-European students can’t trust the product that’s free of charge, but when it has a €16,000 price tag it seems like it might be a high-quality product.”
Smith said the new fees regime in England means the power very much lies with the student as consumer. Universities should make sure the library is well stocked and accommodation is good, but more difficult is protecting the academic judgment at the heart of assessment.
“I’m actually quite pleased to see the rise of the student as informed co-creator of knowledge,” he said. “Recently somebody actually said, ‘Do you think it’s right, vice-chancellor, that students should be allowed to comment on the quality of our teaching?’ And I think, ‘They’re paying for this – so yes’.”
The new fee regime is also seeing a change in the way universities view their staff. “There has been a whole generation of scholars who defend themselves as being so good they don’t have to teach,” said Smith. “But now students are paying, suddenly people like myself value enormously pedagogy, especially those who come along and say ‘I really want to teach the first year’.”
Another conference working group, on European funding, heard that universities are being way too optimistic in their expectations of more funding from the EU. Research by the EUA found that three out of four universities expect to get more EU funds in the coming years. Currently contributions from the EU account for just around 3% of European universities’ income.
Jens Oddershede, rector of the University of Southern Denmark and chairman of Universities Denmark, said: “Most governments, certainly in our country, are looking to EU as a way of sorting their own budgetary problems, and 75% of us believe we can attract more funding from the EU. This is probably not possible. I think we are way too optimistic thinking how much funding we can have from the EU.”
Bureaucracy is also a major issue for universities seeking EU funding, the group was told. Thomas Estermann of the EUA told of one university finance department that had to put all other work on hold during several weeks of auditing visits. He expects universities from many more countries to be seeking EU funding in the coming years. “But we think it will be only those who have already invested and already know how to deal with the complexity that will be successful,” he said.