Thursday, 31 January 2019

The Market Mess in Higher Education

It was inevitable. The Times splashed with the "naming and shaming" of universities who've doled out unconditional offers like confetti. We learn that some institutions are making "up to 84%" of their offers without any strings, and topping out at 117,000 over the sector this last year. The Office for Students aren't happy, because they claim it takes pressure off students to do well in their A-Levels and liken such offers to pressure selling. The Universities of Suffolk, St John York, and Bolton are the worst offenders, but are going to carry on with the practice until the OfS says otherwise.

Why should anyone be surprised or scandalised that this is happening? Higher education has long been a market place in which university grapples with university for students. And when the pool is shrinking, as it is presently thanks to the diminishing number of 18 year olds (this is set to grow again in a few years' time) and international students steering clear because of Brexit and May's hostile environment, competition is fierce. Also, higher education is integral to the reproduction of class. Like life, competition between universities isn't a battle of equals. The top universities trade on their reputation and networks, and can afford to be choosy thanks to the huge grants they get through research projects, archives and, in some cases, government endowments. When times take a lean turn, all they need do is drop their tariff points and the punters flood in. This means institutions lower down the pecking order have to resort to other methods to get bums on seats, and issuing unconditional offers is one that comes easy to hand.

It's curious. Neoliberals of of the left and right presuppose that the market is the most efficient allocative mechanism that exists, and it drives up standards, produces value for money, and helps churn out the the most rounded human beings. As markets are the most efficient means for organising complexity, the state and outside institutions should keep their hands to themselves. And yet, time and again, we see perverse consequences and outright failure. One of the more obvious unforeseen consequences in the higher education context is what has happened to tuition fees. When the Tory/LibDem Coalition tripled tuition fees to a maximum of £9,000/year they believed different institutions would offer a range of fees, completely oblivious to the fact that in the class-bound realities of HE, a cheap degree would equate to a second class degree in the eyes of employers. Lo and behold there was little variation and now almost all, if not all, charge the maximum fee. Indeed, the very existence of the Office of Students as a hands-on regulator is an admission that markets cannot be relied on for service provision and requires an overseer to, um, ensure institutions don't respond to market signals.

Unfortunately, unconditional offers is but a minor ailment bedevilling the system. Large numbers of universities face going to the wall as they've played the capital markets or taken out huge loans to build fancy campuses to get the students in. And when they don't turn up? Bail outs for now, but closures can't be ruled out in the future. There is then the morality of lumping young people with massive debts before their adult lives have barely begun, and the massive pressure this places on them - as anyone working in HE will tell you, incidences of reported mental ill-health by students are galloping. And this is without talking about strains on staff, the culture of overwork, the burgeoning of bureaucracy and there in the background, the ever present threat of privatisation. The whole system is unstable and unsustainable, and it won't be long before it faces a serious crisis.

3 comments:

Pleb James said...

I assume everyone reading this is in agreement that a fair and sustainable solution would be for higher education as a right for all, paid for out of progressive taxation. Am I right to assume that?

George Carty said...

"When the Tory/LibDem Coalition tripled tuition fees to a maximum of £9,000/year they believed different institutions would offer a range of fees, completely oblivious to the fact that in the class-bound realities of HE, a cheap degree would equate to a second class degree in the eyes of employers."

Is the fundamental problem that educational qualifications (particularly at degree level) are positional goods: tokens that graduates use in a zero-sum competition for the best jobs?

Johny Conspiranoid. said...

The way this market is set up there are two tariffs to be paid to enter higher education, a money one and a qualifications one. Institutions can keep charging the maximum fees by lowering the qualifications tariff and so the market has, efficiently, driven the qualifications tariff down to the point where supply equals demand. If the qualifications tariff was kept constant by the government then the institutions would only have price to compete on, perhaps producing the effect the government said it wanted.
There doesn't seem to be much interest in comparing what actualy happened to what theory predicted, but then perhaps the real object of the exercise is to channel tax money to friends. Also, large numbers of people are indebted to the government, which is nice,even though the majority will not recieve any employability enhancement for it.