Looking ahead to a loan revolution

A major government review on the size, shape and funding of higher education will be published next month. Frank Gould suggests likely outcomes
The most fundamental and likely change in higher education is a new funding methodology within the next two to three years. The current mandatory awards/tuition fees system is unsustainable - cash per student will have fallen by about 35 to 40 per cent in the eight years to 1996/97 and student maintenance grants are being reduced each year. It was designed for an lite system.

The mass system of today, where around 30 per cent enter, has created an insupportable pressure on the taxpayer. This is not surprising - public funding per student is far higher in Britain than in any of our competitors. The recently introduced loans scheme is flawed.

The strongest contender, which has the support of the Committee of Vice- Chancellors and many other organisations, is an income-contingent, post- graduation pay-back scheme along the lines of the Australian Higher Education Contributions Scheme. In such a scheme students receive a loan for part of the cost of their higher education, which they pay back after graduation by means of an additional percentage point or two on their income tax or national insurance rate, when their incomes have reached an appropriate level. The funds recouped are held in a trust fund by the Government, which administers the scheme. This would permit, in principle, a net increase in funds to flow into the universities.

This shift in the funding burden from the state (taxpayer) to the student is likely to have two important consequences. The first is that there will be a shift away from the current boarding-school model towards living at home and going to a university within daily travelling distance. The second is that increasing numbers of students may take longer than three years to accumulate sufficient credits to graduate, as more "work their way through college". This is the case in many other countries.

Such a funding change will enable universities to expand to levels comparable with other western countries. At present the figure of 30 per cent of young people entering university is well below that of the US, Japan, Australia and most other European countries - where figures of 40 or 50 per cent are more common. Just about every responsible organisation with an interest in higher education is calling for growth to at least 40 per cent in Britain.

Where will the growth be? While the Government, quite rightly, will try to encourage more students to study science and technology subjects, the biggest growth is likely to continue to be in the vocationally-relevant courses and in continuing vocational education/ professional updating courses (as the fast-disappearing job-for-life path is replaced by more frequent career changes and the need for life-long learning). The areas concerned with personal, cultural development - the social sciences and humanities - are also likely to continue to grow.

The system that will develop will be one characterised by flexibility, the distinction between full-time and part-time courses disappearing so that students can attend when it suits their domestic/employment arrangements.

With increasing numbers entering universities, more students are likely to opt for more broadly based courses than the current single-discipline Honours, leaving specialisation to post-graduate level. The number of taught Masters and postgraduate diplomas is likely to increase substantially, both as a response to this pressure and to satisfy the growing demand identified earlier for continuing professional education/updating.

All but a few of the new universities will converge towards the majority of old universities, combining teaching and research. Only a few, which have a small research base, are liable to become teaching-only institutions. Of the old universities, the top 10 or so are likely to strengthen their research dominance. The reason for this research pull is quite simple - by definition a university is a place where staff are active in both teaching and research.

The move towards convergence has, of course, to a limited extent been two-way: many old universities have now adopted a higher profile for regional and community links and the widening of access.

As well as changes to the size, shape and structure of universities, information technology is likely to play an increasing role in the teaching/learning process. But the idea that these methods will come to replace the traditional teaching/learning process seems to me to miss the point. A university is an institution to which students come to meet and learn with and from other "kindred spirits" and academics.

A university is quintessentially a place where people have personal contact with each other. Lone students studying at off-site, networked terminals for a large part of their time with virtually no personal or social contact with other students and staff, seems to me unlikely to become the general pattern.

The key to the future is a new funding methodology. Once this nettle has been grasped, much of the rest follows.

The author is Vice Chancellor of the University of East London.