Universities, students and professors are reeling in the aftermath of Lord Browne's report on higher education, published last week. At a stroke, the former BP boss and his committee have proposed a shift in England's higher education system away from one largely funded by the taxpayer to one that is mainly financed privately – by graduates from their future earnings.
Under the plans, fees are expected to increase from the current £3,300 to £7,000 and more a year on average, with graduates not paying anything back until they earn £21,000 a year. To stay still, and receive the income they have now for teaching, universities will have to charge fees of £8,000, according to Professor Sir Bob Burgess, vice-chancellor of the University of Leicester. That's because the proposal is for the Government to stick a levy on fees set at more than £6,000.
Burgess clearly feels that the demand for Leicester's courses is robust enough to enable it to more than double its fees and still keep the students coming in. "I think Browne offers us a solution to being able to maintain a high-quality higher education sector," he says. "I am among those who welcome the Browne review. It is fundamental that we are able to devise a good bursary and scholarship scheme, because one-quarter of our students come from the lowest socio-economic groups."
A study carried out by the University of Leicester last month showed that increasing tuition fees to as much as £10,000 a year would not significantly reduce applications for university. But the survey of 730 sixth-formers found that poorer students would be more likely to be deterred, and that the new universities would be the most likely to lose applicants.
Many experts are deeply critical of the reforms. Les Ebdon, vice-chancellor of the University of Bedfordshire and chair of the think tank Million+, says: "The Browne committee is proposing to take £3.2bn off the teaching budget, and graduates are going to have to pay to bail the bankers out."
Ruth Farwell, vice-chancellor of Buckinghamshire New University, and chairman of GuildHE, the group that represents the smallest institutions, is worried about the effect of higher fees on students demand. "I am disappointed that the Browne review has become bound up with the cuts," she says."I am not trying to say that higher education should be protected, but the review was set up years ago to think about how we are going to maintain a world-class system, and it has been a bit hijacked by the cuts."
She is likewise concerned about the effect of higher fees on demand from students from poorer homes. And she wonders how her own university, Bucks New (as it is known locally), will manage in a system where most of the funding for teaching vanishes for the vast majority of their courses.
The Browne review recommended that only "priority" subjects have their funding protected – which means that Bucks New's niche subjects of graphic design, advertising, textile design and music-industry management will probably have to charge the full whack or make cuts. "I hope that the Coalition Government doesn't accept the Browne report as it is," Farwell says.
Another critic, Bahram Bekhradnia, director of the Higher Education Policy Institute, is extremely worried. Making higher education more of a marketplace will accentuate the differences between universities far more than has been the case until now, he said in a report published immediately after the review. Some universities – such as Oxford, Cambridge, Bristol and Durham – will be able to charge higher fees than others.
Universities whose market position does not allow them to charge high fees will find that their income declines, together with the quality of what they provide. These may face serious financial difficulties, he said. "If there is rapid change, institutions with lower demand may have to close courses, or may even become unstable and have to close, reducing the breadth of choice available."
All universities have been frenziedly modelling different scenarios to see how demand for their courses could be affected by hefty fee rises. At the University of the West of England, a very large new university in Bristol with more than 30,000 students and a turnover of £220m, the vice-chancellor, Steve West, reckons it will have to charge £7,200-£7,300 a year to maintain spending on teaching. "We're in uncharted territory," he says. How will students and the market respond to such a big increase? Nobody knows. While we have the experience of 2006, when fees increased to £3,000 a year and our applications went up by 27 per cent, we don't know how students and their families will respond now.
"We have a strong balance sheet. We're not panicking. We have ambitious plans for investment. We will work our way through this. We owe it to the 18-year-olds not to screw this up." The university envisages that it will be spending £300m in the coming years. Not all universities are so cash-rich.
But West is sure that all universities will become more nimble by considering new options, whether it means offering two-year degrees instead of the current three-year courses – as my own university, the University of Buckingham, does – or laying on work-based learning so that the needs of students and employers are accommodated.
All universities are worried that the Government is reducing public investment in higher education by an unhealthily large amount. Our Government invests a relatively small sum in universities compared with other countries. In the US, public investment in higher education amounts to 1 per cent of GDP, in line with the average for the OECD developed nations. The level is just 0.7 per cent in England, where this spending is now set to decline dramatically.
Lucy Hodges is director of communications at the University of Buckingham
The students speak
Tom Rochester is a second-year History student at Leicester University.
"I think a big fee hike could put some people off going to university, particularly those considering doing what I would call 'Mickey Mouse' degrees, like wine-tasting. They would in future be less inclined to go to a university and more likely to attend a further education college. People from poorer backgrounds might also be affected by the idea of how much they will have to pay back, and decide not to go to university but to get a job or an apprenticeship instead. I think too many people go to university. I myself will think very carefully now about whether to stay on and do a Masters."
Riaz Docrat already has a degree in medical biochemistry and is now in the second year of a medical degree.
"I already have debts of £22,000, and expect to graduate with debts of £35,000. I think that if the cost of a medical degree rises to £10,000-£12,000 a year, as some people have suggested, it will put people off. People simply won't sign up. I have financial backing, but a lot of people don't and they will be deterred."