OCTOBER 19, 2013
AMERICANS WHO WONDER what the heck is happening to their public colleges can find answers in the British case. While American educational and political leaders deny the negative outcomes of the actions they barely admit to be taking, the United Kingdom’s Tory government has offered explicit rationales for the most fundamental restructuring of a university system in modern history. The stakes are very high. Both countries have been downgrading their mass higher education systems by shrinking enrollments, reducing funding for educational quality, increasing inequality between premier and lower-tier universities, or all three at once.
Oddly, policymakers are doing this in the full knowledge that mass access to high-quality public universities remains the cornerstone of high-income economies and complex societies. The public has a right to know what politicians and business leaders are really doing to their higher education systems, why they are doing it, and how to respond.
Those who tried to follow the British drama through scattered newspaper articles and government reports will be glad to know that we now have a one-stop comprehensive guide to the whole affair. It is Andrew McGettigan’s The Great University Gamble: Money, Markets, and the Future of Higher Education. No one has assembled the political and financial pieces of the story as he has, and the book has started to reanimate discussion of higher education policy in Britain.
First we need to bear in mind that British higher education had succeeded beyond all hope at its chosen task, which was to expand college access for Britain’s lower-middle and working classes as quickly as possible. The United Kingdom came late to mass higher education — it went from a 15 percent to a 35 percent participation rate only in the 1990s. In contrast to the US setup, all but a half-dozen British universities are public (Harvard, Yale, and Stanford are private, while their British counterparts, like Oxford, Cambridge, the University of London, are public), and, after 1963, were tuition-free. Universities relied on “teaching grants” — public funds keyed to enrollments and discipline of study — and on government research funds. The system has always been stratified by wealth and prestige: Oxford and Cambridge have nearly 80 percent of the entire UK system’s private endowments, which total only £10 billion for the country, which means UK higher education endowments total about one-third of the endowment of Harvard by itself. The system was stratified, perhaps, but not awash in private wealth, and dedicated to offering high-quality studies at its red-brick universities, “plate-glass” universities created in the 1960s, “colleges of advanced technology,” former polytechnics, and metropolitan universities.
In the 1990s, rapid growth in enrollments strained finances and caused complaints about declining funds measured on a per-student basis. The Labour Party’s solution was to accept the recommendation of a funding report to start charging fees — £1,000 in 1997, raised to £3,000 per year by 2006. McGettigan points out that fees were introduced by Labour, so Labour lacked a principled argument against later Tory fee increases, but that in contrast to those, Labour fee hikes did not simply backfill government cuts but supplied new money on top of existing teaching grant budgets. A government-controlled loan program was introduced to allow students to avoid paying the new fees out of pocket. Students could also borrow to cover living expenses while in school. For comparison’s sake, University of California fees stood at a bit over $3,000 per year in 2000 (about a fifth of what they are today).
As the 2000s wore on, higher education didn’t appear on Britain’s list of pressing national problems. Overall it had achieved equilibrium and was working pretty well. Having led the West into deindustrialization, the United Kingdom was now finally cranking out larger numbers of knowledge workers in possession of tertiary degrees. The cost was fairly cheap for students, and the facilities and resources were good. The historian Howard Hotson pointed out that the United Kingdom had the most efficient university system in the world as measured by the kinds of metrics policymakers favor, like the number of highly ranked universities as a function of sector expenditures. There had been one glaring problem with UK university growth — too much “expansion of numbers on the cheap,” the cultural critic Stefan Collini wrote in 2010. That year’s “Browne Review,” commissioned by Labour and exploited by Tories, admitted the size of the problem: “Between 1989 and 1997 universities experienced a drop in funding per student of 36%.” This large erosion, in Collini’s phrase, “dramatically diluted the level of attention to individual students that most universities [could] provide.”
The Cameron government could have corrected this problem by increasing the teaching grant. This would actually have meant little more than a reversal of the previous reduction in real national investment — from just under £9,000 per student per year to about £7,000 20 years later. The government could have expressed its concerns about student learning by putting Britain’s overdeveloped audit culture to work on the problem. Clawing back teaching funds, in conjunction with detailed diagnostics, would have allowed bread-and-butter fixes like reductions in student-faculty ratios, focused improvements in learning technology, and special assistance for the less prestigious universities that, in most cases, served the poorest and least prepared students.
When its time came, the Tory government did the opposite of these things. Fresh from his victory in the general elections of 2010, Prime Minister David Cameron, along with his minister for universities and science, David Willetts, followed the recommendations of a previously commissioned “independent review” to convert the university system into a competitive consumer market, though one intricately managed by state policy. The government cut 80 percent of the public funding to universities over several years; reserved the remainder for strategic fields largely in medicine, science, and engineering; tripled the student fee cap to £9,000; increased lending to allow students to use borrowing to cover higher fees; and explored selling the student loan portfolio to private banks. While American policymakers fiddled with public funding, the British burned it. The concrete result will be that, in the government’s own figures, the typical future university student will “study for three years and leave with £35,100 of debt.”
Why would the Tories do this? British higher education was already a no-frills system, and three of its virtues were low cost to the public, relatively low fees for students (then capped at £3,000 plus inflation), and low overall educational debt. The Tory coalition partner, the Liberal Democrats, ran in 2010 on a platform of eliminating student fees entirely, but accepted a tripling of fees instead. The US student debt crisis was decades in the making, and has led to an average debt among students with debt (66 percent of all students) of $26,600 after four years. Amazingly, the Cameron government has locked in an even larger student debt overhang in Britain, and done it overnight.
The Tories offered two main justifications. McGettigan confirms the official political explanation in his book’s first sentence:
In May 2010, the UK Coalition government formed under an overarching narrative: austerity measures had to be introduced to restore economic health, given the large and increasing public sector deficit. […] Public funding therefore had to be cut across the board and the budgets used to fund higher education could not be immune.
Were the goal simply to allot to higher education its fair share of temporary sacrifice, a large but limited cut, say one of California’s 20 percent slices, could have been imposed, with limited fee hikes to compensate, say a California-style, 33 percent one-year increase to £4,000. The Cameron government did neither of these things.
What it did do was cut £3 billion from the teaching grant that goes directly to universities, while adding £5 billion in additional loan and maintenance costs. The savings from the Tory funding swap (public to private) were negative £2 billion to the public, except that, by virtue of accounting conventions, most of the loans would not show up as expenditures on the government’s books. As a result, the government could say the plan saved £1 billion per year — accomplished by pushing university funding costs onto the student loan program. The government could also claim that the loans weren’t really costs because most of the loan money (then thought to be 68 percent, now closer to 62 percent) would be paid back. These tales of big budgetary savings demobilized most potential critics.
The privatization of university funding not only yielded no real short-term savings to the government, the medium- to long-term impacts were even worse. Student loan repayments will not keep up with additional government borrowing to provide the loans, particularly if student fees continue to rise. McGettigan dug into the government’s own reports, where he found that the loan program will have increased government debt by £25 billion by 2017-’18, and that it will finally run in the black, with repayments matching loan outflows, only sometime in the mid-2030s. By that time, the current Tory government’s plan will have tripled government student loan liabilities as a share of GDP to a remarkable 6.7 percent, or £103 billion in current pounds. In a recent update, McGettigan notes that loan repayments are currently coming in at two-thirds of previous estimates, and are covering only 12 percent of loan outlays.
Budget balancing, it seems, was not the Cameron government’s primary motive in replacing public funding with student loans.
University Minister Willetts offered another rationale — the Tories wanted merely to improve educational quality. British universities delivered inadequate teaching to their students, he claimed, and this could be fixed only if students were empowered to vote with their fees. McGettigan cites Willetts explaining this theory:
The case for our higher education reforms is quite simply that they will lead universities to focus far more intensively than ever before on the quality of the teaching experience because they will be competing for students who bring their funding with them.
This claim rested on a familiar political storyline: the new Conservative government was siding with the taxpayer by forcing efficiencies on a coddled public sector that the sector would never impose on itself.
This rationale doesn’t hold up either. State funding was already tied to student enrollments, so students were already able to vote with their feet against bad teaching. More importantly, British university students thought their teaching was quite good. The Browne Review, which helped the Tories get the ball rolling, offered as evidence of teaching problems a figure from a national survey showing that course satisfaction rates increased only two percent between 2005 and 2010. But in 2005, student satisfaction with their universities already stood at 80 percent. These are very high numbers for UK university teaching — 50 points higher than the Cameron government’s approval rating in September 2013. To put it another way, UK students liked their professors at least as well as they liked their iPhones, a universal icon of commercial excellence of the kind to which universities must now aspire.
Perhaps realizing their data did not support their incursion, the government’s own white paper, Students at the Heart of the System (June 2012), which appeared six months after the cuts and hikes had been voted in, replaced student satisfaction with a different metric — the wide variation in reported hours of study across fields and institutions. But these data just as readily prove that too many institutions remain poorly funded, that mass multitasking has eroded concentrated study, or that commercialization was already having a negative impact on learning: weaker institutions fearing a loss of customers might increase customer satisfaction by reducing demands. Were a serious study to have found real problems with teaching, these could have been solved with operational reforms, rather than less teaching funding and a curtailing of the nationwide university assessment exercise (now called the Research Excellence Framework) that allocates supplemental funding exclusively through the rating of research.
Neither deficit reduction nor teaching quality explains the Tories’ higher education counterreformation. So what is really going on? McGettigan’s book takes us so deeply into the government’s behavior that we can begin to grasp the larger project that animates its apparently counterproductive cuts.
This larger project is rarely admitted but easy to state: it is to turn the United Kingdom’s public university system into a commercial business sector with a right to public subsidies.
Willets was explicit that commercialization was a means, though he denied it was the goal. He touted his certainty “that the most powerful driver of reform is to let new providers into the system. They do things differently in ways none can predict.” These new providers are mostly large education and publishing corporations like the University of Phoenix or Pearson PLC, which have for-profit teaching and testing arms. The Tory theory is that they will disrupt service-oriented universities through a tight focus on low-cost, job-oriented programs. Competition from these new, innovative education providers will allegedly force incumbent universities to adopt similar standards of pricing, cost-cutting, marketing, and tailoring of study programs to the workplace. McGettigan’s key chapter, “Why a Market?” lays out the “five points in favor of market reforms,” which boil down to the paired neoliberal axioms that price is the best measure of quality and competition the best way to insure it.
McGettigan details the commercialization scheme in order to show that it does not in practice reflect neoliberal theory. Student enrollments do not embody natural customer demand but are carefully controlled by the government ministry. The ministry also creates winners and losers among universities by changing enrollment rules year after year. It is altering the legal status of private providers in order to make them eligible for public subsidies. It is forcing universities to seek new private revenues by marketing their high-tuition services to the “new middle class” overseas and by enabling a new university financial dependence on credit products.
Revenue strategies are no longer simply a normal responsibility of the university administration: they become the institution’s central focus and the raison d’être of its management, which under the new rules acquires expanded governing authority. Legal changes will allow corporations to control not-for-profit universities as subsidiaries, and these monetized, marketized, and privatized universities will become answerable to financial rather than academic governance. The loan schemes involved will continue to increase educational costs for individual students and for the government at the same time.
The UK higher education picture has both light and shadow, of course, but McGettigan allows us to see the shadows clearly, and as an integrated piece. By the end of the book, the reader’s overwhelming impression is: first, the Cameron government has not freed up the higher education market but repeatedly intervened in it; second, the main financial effect will be higher costs to both British society and British students; third, the government’s real purpose was not to improve educational results but to make education resemble business; fourth, their desired outcome was to enable businesses to insert themselves between teacher and student, universities and their programs, to collect a toll.
Though the government asserted that businessed universities would be higher-quality universities, there is no evidence for this claim and much evidence against it. In the United States, we have a very large for-profit college sector that is focused on bare-bones practical degrees, and they have arguably the worst learning-per-dollar (or “gainful employment”–per-dollar) efficiency rate in modern educational history. Their very high student debt rates, very high default rates, very low completion rates, and very low placement rates are made possible entirely by government student loan programs, which in most cases comprise 90 percent of their revenues. Their students are disproportionately disadvantaged and underqualified. They are the students most in need of the intensive instruction that these schools do not provide. Given this ample precedent, how will the Tory government keep its “new providers” from becoming American-style government-subsidized trolls? How will they keep them from making the most money from the most vulnerable students? To bring us to our next issue, how do we know that the government will want to keep education corporations from increasing revenues by cheapening the product?
If we evaluate the Tory changes as an educational project, we are left with an impression of blind perversity. How do we rationally explain, for example, that in the same year that US student loan debt passed $1 trillion, the Cameron government set about tripling student loan debt in the UK? And yet looked at from another angle, the Tory plan isn’t perverse at all. It is a coherent reflection of a socioeconomic goal to change the social status and effects of higher education, and to do this in accord with a specific postulate about England’s place in the global economy.
Here we at last approach the center of the mystery of the hasty and confusing changes to public higher education in Britain. McGettigan refutes the claimed financial and educational benefits, but does not say as much as he might have about the deeper question — why privatize? The Tories seek to transform public higher education into a market-driven and financialized business, but why? Is it mostly for the immediate financial benefit of Tory-favored industries? Is it the sheer force of neoliberal belief — privatization for its own sake? Both of these? Something else?
A full answer is beyond the scope of both McGettigan’s book and this review, but I can at least point in what I am sure is the right direction, one confirmed by McGettigan’s analysis. The deeper purpose of the Tory changes is to end the post-World War II reformation of universities in the West, which created mass access to university studies roughly equal in quality to those elites enjoyed. We could call this the Great Democratization, and its genius, particularly in the United States, was to build an infrastructure for delivering mass quality — cutting-edge teaching and research, the latest in scientific, social, and cultural developments — to the children of doctors, construction workers, corporate executives, cash register salesmen, film stars, department store clerks, truck drivers, computer scientists, and migrant farm workers, that is, to the entirety of society in accordance with their motivation and preparation. Certainly there were whole populations that had to fight their way into this system, and that still must fight. But the regulative ideal was that even if you couldn’t get into the most selective universities — Harvard, Oxford, et al. — you could receive an education of quality similar to what you’d have received there. The United States had an abundance of immersive liberal arts colleges and public research universities as good as any university in the world, signaled by then-UC President Clark Kerr’s pleasure in the fact that a 1964 review found more top-ranked departments at UC Berkeley than at Harvard. Importantly, the quality of the public universities did not depend on their selectivity, which was then low at Berkeley and everywhere else. In the United Kingdom, students at Sussex could study with the world’s pioneers in science policy studies, or at Birmingham with their equivalents in cultural studies, without feeling like rejection from Cambridge had put a cap on the development of their creative capabilities. Massive public funding enabled this rough equalization, this evolving democratization, of academic quality.
McGettigan is fully aware of this framework. Invoking a precursor to the postwar changes, he cites Raymond Williams’s description of the “third revolution” that accompanied the democratic and industrial revolutions — a “cultural revolution” expressed as “the aspiration to extend the active process of learning, with the skills of literacy and other advanced communication, to all people rather than to limited groups.” Active learning is precisely what the postwar public university was to deliver on a mass scale, although there have been many stumbles in the attempt, particularly as per-student funding began to erode. Another feature of this intellectual counterpart to the democratic and industrial revolutions is that it costs a lot of money. For-profit colleges do not try to offer true active learning because the return on investment takes years or decades, and appears mostly as “spillovers” that create broad progress in the wider society. The further implication is that therefore only society as a whole is able to pay for the high-yield version of education (and for the same reason only society can pay for basic research).
In other words, active learning is a public good, of great benefit to society and of little or negative benefit to the organization that conducts it. The democratization of higher education necessarily rested on major public outlays, to insure both “equality of opportunity” and the spread of creativity for the knowledge society. And it was understood that, though society must pay, educators must control, for only they were focused on long-range goals. Thus McGettigan cites the Magna Charta Universitatum, adopted by EU Ministers of Education in 1999, which states: “To meet the needs of the world around it, [a university’s] research and teaching must be […] intellectually independent of all political authority and economic power.” Universities could not, in short, be subject to markets or to the authorities that manage them, for they would not grasp educational value, would judge only by cash value, and would steer universities away from their social purpose and toward limited private benefits.
The Tory counterreformation takes aim at all of these postwar democratizing features. The government’s 2011 white paper affirms that universities are in some part public goods, but then zeros out the public good of social and cultural fields by cutting their teaching grants to zero. The public funds for non-cost-benefited enrollments, for remedial, experimental, or innovative programs, will in the new system be available only if they point toward future revenue growth. The independence of academic governance from financial management is greatly reduced. If Thatcher once famously remarked, “there is no such thing as society,” Cameron has operationalized this as the somewhat less resonant, “there is no such thing as a public good.” For these latter-day Tories, even educational goods are private, and so the arbitrator is the market, which grants presiding authority to the business structure and to the leading figures and firms in the relevant sectors.
What are the practical outcomes for this counterreformation in higher education? A first is a reduction of professional authority, now subordinate to financial management in decisions on what has value in the institution. Treasury, budget, and finance will decide the value of higher education, which is, in effect, to decide what level of development society shall afford. This means a loss of legitimacy for any educator who speaks for the social value of egalitarian intellectual development.
The second effect is that the steady expansion of higher education enrollments will stop. UK enrollments fell just after the Tory changes began — applications from England to UK schools declined 8.6 percent between 2011 and 2012. They have recovered this year, but the government keeps a lid on fundable enrollments and shows no interest in further expansion.
The third effect is decreased equality of conditions for the students who do attend. The large number of newish middling UK universities that McGettigan calls “the mass of mass higher education” will face new financial difficulties. While these institutions struggle to maintain some reasonably small courses or to find part-time graders for lecture courses, the government continues to offer public funding for Oxbridge’s tutorial system. If a slogan for the higher education reformation might have been “tutorials for all,” the unspoken slogan of the counterreformation is “tutorials for the few — and standardization for the rest.”
This may seem odd to most readers: isn’t this the very moment in world history in which mass standardization is of little value in the economies of the West? Aren’t we supposed to be upgrading everyone’s abilities to compete in a global economy? This is where we arrive at a final layer of Tory strategizing, conscious or not. It is strategizing about the future of British capitalism as such. If fewer middling students get their higher learning at a smaller number of middling universities, what is the loss? These non-students will receive lower wages, cost society less money, learn to make fewer demands, and be less trouble to Britain’s leading economic sectors. They are downgrading British society to new lower status in the “global auction,” a competition at all skill levels that puts downward pressure on everyone’s wages. Rather than receive high wages for their high skills, graduates will, in this late-capitalist framework, receive low wages for them. Tories appear simply to have conceded the point, accepted that the “high-skill/low wage” bargain is the best Britain can do, and decided to limit current taxpayer outlays for a losing university bargain. Of course this means accepting a Britain that is both less qualified and less affluent, that is in fact post-middle class. This defeatism is at the heart of the government’s higher education plan: there is and shall be no collective betterment, and thus no need for collective investment.
I don’t want to come to an overly simplistic conclusion that distracts attention from the richness of detail in McGettigan’s book or from the complexity of these Tory changes’ effects. I am not clairvoyant about where they will lead. But I have spent years watching the public university systems of the United States and the United Kingdom — and of France and Germany — struggle to tread water without a buoyant definition of their value as public goods. The result has been the status quo for some, floundering for most, and a general sinking of public confidence that universities are on the public’s side.
The inconvenient truth is that a public-good higher education would mean and will mean increasing enrollments, rising quality, and increasing development for a country’s economy and society. The Tory’s instituted private system will mean lower enrollments, rationed quality, and reduced overall development. Unless the university sector can define its mission as “a quality commitment to the population defined as whoever can benefit,” unless it can make clear the connection between its public good status and democratic economic hope, Tory-like counterreformations will prevail throughout the West. McGettigan’s book shows that this outcome would be contrived, imposed, artificial, and devastating.