David Wiletts and student fees


Tory David Willetts could raise student fees to £7000. It's not enough.

The Conservative Shadow Minister for universities, David Wiletts, said that he would consider demands to raise the annual fees charged by universities fo £7,000, roughly twice the current levels. That's a step in the right direction. People complain about students leaving university with debts of £20,000 and suchlike – but the fact is that a university education can raise their future earning potential by much more than that, so it's still a really great deal.

If the universities had to balance their own books and pay for themselves instead of taxpayers handing them cash, their fees would have to be a lot higher than that, though. ASI Fellow Terence Kealey, himself the head of Buckingham University, reckons that £15,000-£20,000 would be nearer the mark – comparable to the fees in top US universities.

The public interest argument is that we don't want bright but poor students to be discouraged from going into higher education. Quite right. But the US universities solve that by accepting students only on the basis of merit, then having endowment funds to pay the fees for those who can't afford them. It's a very sensible sort of arrangement, and we should strive to have it in the UK. But I'm skeptical of the argument that the taxpayer should subsidize the universities because the country needs lots of graduates. The main benefit of a university education goes to the students themselves, and not to the general public. So the students should pay most of the cost – the real cost. A loan system is a good way to make that manageable for them. But it is right that people should look at the costs and benefits of higher education and decide on the basis of the realities – not on the basis of subsidized prices. That would be a more rational allocation of taxpayer funds, and better for the students themselves.

Dr Butler's book The Rotten State of Britain is now in paperback.