Saturday, October 16, 2010

Privileges revoked

Humbuggery to it all. The generation above me were handed a one-way bet on the housing market and a free education. My generation is struggling to get on the housing market but at least we made it through university without paying through-the-nose fees. Shortly after I graduated, tuition fees rose to about £5k a year, burdening the next batch of students with a hefty debt on graduation. Now universities are facing eye watering cuts in state funding, with fees potentially rising to over £10k a year. When these poor kids graduate, they will be faced with a large tax burden to support the privilege, grey haired, degree-laden masses, who will be sucking the young ones dry with escalating health care and pension bills. No, I cannot blame today's youth for feeling a teeby bit hard done by.

I think this situation is completely unfair, but it is also unavoidable (the system is broken in a big way). To help matters, perhaps everyone who has graduated in recent decades should pay a fee to keep their degrees. Maybe an average of £1000 on an inflation adjusted basis, adjusted also for the nature of the degree and the individuals income to date (the government has tax records at its disposal). This would help quite a bit, reducing the feel of discontent between generations. How politically acceptable is such a retrospective tax - has such a thing ever been done? Well, yes, kind of, as we do see windfall taxes in industry.

On the grand scale, however, I don't see how we can maintain the status quo. Higher education needs to get its finances in shape. Perhaps with technology in a position to sweep over the old pack-em-in-halls-and-make-em-take-notes approach, with the capacity to knock the cost of teaching the marginal student to negligible levels, this deathly cutting of state spending could well be the spur the system requires. The incentive will certainly be there to provide greater value for money as price becomes a meaningful incentive for decision making.

Personally, I think many students went to university because it was free, or very cheap, and because it was simply the done thing. If you could go, you would go, no question. I don't really know if I am better or worse for my degree as I have no idea of where I would be had I not gone to university.

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