Thursday, October 21, 2010

Student fees and transatlantic misunderstandings

Lord Browne's review of university funding dominates the thoughts of many people at the moment, not least this household. This entry won't be about citizenship or immigration but about student fees in order to address the incredible misunderstandings upon which politicians are making transatlantic comparisons at the moment.

The review proposes raising university fees substantially, throwing in the possibility of unlimited fees. Many politicians draw parallels to the American system, where well-known, top-class universities like Harvard charge upwards of $50,000 a year. Yet such comparisons are generally hollow without a deeper understanding of the American private university system.

While Harvard's pricetag may be $50,000 a year, it is a heavily endowed university committed to removing financial barriers for students good enough to be accepted. It offers means-tested grants that can make the education nearly free for students coming from families with incomes under $60,000 a year. In fact, at Yale, students coming from such income backgrounds were expected on average to contribute about $2,600 a year - including room and board. At Harvard, nearly 70 per cent of students receive aid, and the other 30 per cent would be from families with incomes over $120,000 per year.

Private American universities are able to provide such levels of grants through substantial endowments. During the 2010-11 year alone, Harvard anticipates giving out $158 million in need-based assistance. British universities cannot even begin to match such levels of private holdings to subsidize education.

At the other end of the spectrum, America also has a system of junior colleges that can cost as little as $150 a term and give a qualification equivalent to half of a bachelor's degree, after which the recipient can transfer to a full-fledged university to complete his/her education. This offers a good option for students whose families do not have enough money to pay for a four-year degree and whose grades are not competitive enough to draw a merit-based scholarship from a well-ranked university.

Without such alternatives in place, Britain's discussions of such fast, possibly uncapped, fee rises are ridiculous. Why would a top-calibre student choose to study at a good UK university in the face of high fees if s/he could gain a place at an American university and pay less?

There is one other problem that needs to be addressed. The review says that the funding structure of the universities is unsustainable and that the students must contribute more to their education. On the surface, this is somewhat understandable, though there are logical fallacies that were pointed out in the previous blog post. Now, however, it emerges that Osborne is proposing 80% cuts to government funding for universities, essentially shifting the burden of education from the government to the students. Yet students will - reasonably, it would seem - expect higher standards if they're going to pay twice as much, standards that it will be impossible to meet because the departments will have the same budget as they do now, simply a different source of income. Raising student fees cannot be seen as an alternative to government investment, and there can be no doubt that it will hit the poorest the hardest.

Are we really all in it together?

Thursday, October 14, 2010

Logical fallacies of visa fee rises

The government appear to be applying the same logical fallacies to justifications of visa fee rises as justifications for limitless university fees. The argument goes something like this:

Thesis 1: Immigration costs the UK money. It is unfair for the taxpayer to have to bear this burden. Therefore, the immigrants should bear the costs.

Thesis 2: Immigrants receive benefits from immigration in the form of higher wages/better standard of life/etc. They would not have access to these positives if they didn't come to the UK. Therefore, it is reasonable to expect them to pay for their access to higher wages.

Thesis 3: It is justifiable to recoup more than just the administrative costs from immigrants because they benefit so much from their status in the UK. Those who remain long-term will have access to more than contributory benefits. Therefore, it is justifiable to charge a large amount up-front for settlement status because the immigrant will receive that much benefit from his/her immigration status over the duration of his/her residency.

The logical fallacies are these:
1. Immigration pays for the UK economy.

2. Immigrants on limited visas are not allowed to access any benefits they haven't payed into.

3. Immigrants have a higher average per-capita income than Brits, and they pay more taxes per-capita than Brits while not being allowed to claim tax credits, housing benefit, etc. They are only allowed to stay in the UK as long as they are net contributors.

4. The biggest fallacy is that the equation fails to take into account the immigrants' contributions to the UK. Really, the UK should be paying highly skilled migrants to come, as the UK will reap far more benefits than the individual immigrant.

This is the same fallacy that is applied to the arguments to raise tuition fees: the average graduate earns £100k more over his/her lifetime than a non-graduate; therefore, he/she should be willing to pay more for a degree. This leaves out the fact that if the average graduate earns more, he/she also pays more taxes as well as repaying the loans. An average earner will pay £45k in loans (with interest) as well as paying taxes, which pretty much negates the benefit from getting a degree in the first place. Furthermore, the calculation leaves out the fact that graduates are - generally - easier to retrain into other jobs in response to economic shifts, which means fewer people claiming benefits. Now why is it that students and immigrants should bear this burden?