Before 1998, students in England did not have to pay out of pocket to attend a university. Universities were completely funded by taxpayers. As the demand for degree-holding employees built during the 1980s and 1990s, universities were stretched to the limit with their resources.
More students meant a greater demand on taxpayer resources. Because of that, university funding per student fell drastically over two decades, and in 1998, "free college" ended.
What were the results? Not what was predicted.
Preston Cooper writes in Forbes that the center-left Labour government introduced a small tuition fee of £1,000 per year starting in 1998. Later governments raised that tuition fee all the way up to its current max price point of £9,250. This introduction of tuition fees actually helped everyone involved.
This is not a barrier to students of limited means, however. English students do not pay tuition upfront, but rather use government-issued loans to pay back the cost of their education. Loan payments are set according to graduates’ incomes and remaining balances are forgiven after thirty years.
Twenty years later, the reforms look like a success. Higher education funding per student climbed back up after the end of free college, since universities could now lean on tuition fees for revenue instead of just taxpayers.
Our findings suggest that England’s shift has resulted in increased funding per head, rising enrolments, and a narrowing of the participation gap between advantaged and disadvantaged students. In contrast to other systems with high tuition fees, the English system is distinct in that its income-contingent loan system keeps university free at the point of entry, and provides students with comparatively generous assistance for living expenses. We conclude that tuition fees, at least in the English case supported their goals of increasing quality, quantity, and equity in higher education.
Cooper notes that England’s experience highlighted a fundamental problem with government involvement in higher education: “If universities rely more on government than students for funding, the level of investment in higher education hinges on the whims of politicians rather than the needs of students."
In a free-market education system, more demand leads to more resources being made available. Government funding, on the other hand, could not provide the flexibility that the market did.
Since tax revenues and competing spending priorities rarely align with the surges and slumps of student interest in college, governments usually cannot allocate the “right” amount of funding to universities.
Cooper concludes by saying that England still has many issues with its higher education system, like few expectations placed on universities to ensure quality, but ending “free college,” he says, was the right choice for students.
Do you think college should be free? Tell us your thoughts.