Top-up fees: Just and efficient

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David Papineau argues in The Times against lifting the cap on top-up fees, as Lord Mandelson has been suggesting recently. Apparently, he fears that if the government were to do so, “our proudest universities will quickly turn into rich kids’ colleges."

The present, state-subsidised system of university funding is regressive: hard-working taxpayers from all sections of society, two-thirds of whom do not hold a university degree, subsidise the exploits of relatively affluent students. Obtaining a university degree is not a necessity or a trial, it is a fantastic experience that boosts lifetime income by almost 60%. Those who derive the benefit from the education should pay for it – the students themselves.

Papineau protests that if students are made to pay the full cost of their education, “universities will become the preserve of the rich," and that “a system of means-tested bursaries … won’t solve the problem." Well, if government continues to provide low-interest loans covering tuition fees and living costs for all those who can’t afford the education outright, as they intend, then why should the poor be excluded? If a university education is worth what it costs, then given sufficient credit, people will be prepared to pay for it.

Giving universities the flexibility to charge the price they want for an education will also raise standards. Universities will have to compete for their students: striving to excel, saving money where necessary, targeting students with a variety of demands and reacting to a changing marketplace.

The current system is unjust and inefficient. Raising the limit on top-up fees is a good step towards the free-market university education system that would move the burden of cost from taxpayer to consumer, and improve quality across the board.