Vishal is the winner of the Adam Smith Institute’s 'Young Writer on Liberty' competition. The subject of the competition was '3 Policy Choices to make the UK a Freer Country', and below is one of Vishal's three submissions.
If the objective of providing student loans is to ensure that everyone has access to higher education, why do we stipulate that its use be restricted to British universities? Why not grant all prospective university students the freedom to use their loan money on foreign universities?
Simply expanding university places in the name of ‘widening participation’ doesn’t change the fact that people from disadvantaged socioeconomic backgrounds are disproportionately well represented in the lower-tier universities (where graduate unemployment rates are the highest). Furthermore, the prospect of graduating with up to £37,725 of debt (for a 3-year course; £9000/year for tuition + £3575 maintenance loan) is far more daunting for people from lower-income households (bursaries and grants are limited, after all).
Allowing students to spend their student loans on foreign universities would ease the pressure on British universities whilst simultaneously encouraging them to be more competitive with the services they offer - most importantly though, students would have more choice (and often cheaper alternatives).
Many middle-income and upper middle-income families (whose children hold the lion’s share of places at the best universities, currently) may find that the resultant change in the marginal cost of sending their children where fees are relatively more expensive (to the USA, Canada and Australia, for example) would actually make this option financially feasible – thereby freeing domestic places.
Furthermore, if students chose to study in Europe (as many would, seeing as it is closer), many European countries do not even have tuition fees (and, if they do, it’s a fraction of what we pay for our universities) – this means that they’d only really need a maintenance loan, if at all! There are no tuition fees charged in Austria, Denmark, Finland and Sweden. Norway charge about 40EUR/semester (no, I’ve not omitted any zeroes), German universities can charge a maximum of 1000EUR/year, the French public universities charge between 250-650EUR/year, the Dutch 1835EUR/year, the Spanish between 525-1280EUR/year and the Swiss up to 3000EUR/year. That means massive savings for the taxpayer and many happier British graduates with a lot less debt.
Also, for those students who are adventurous and/or enterprising enough to want to get their foot in the door of certain emerging markets sooner rather than later, they could study in the BRICS countries (again, for a fraction of the cost).
If the objective of student loans is to educate, let students spend it on the education they would prefer!