Call For Universities To Charge Well-Off Students £30,000 A Year

[Injin]

http://www.guardian.co.uk/education/2009/dec/27/wealthy-university-students-pay-more

A leading economist has called for students from well-off families to be charged the "market rate" of up to £30,000 a year to go to university.

David "Danny" Blanchflower, a former member of the Bank of England's monetary policy committee, said the "poor have been subsidising the rich" for too many years.

Writing in today's Observer, he called for the cap on student fees to be raised, allowing universities to charge the richest students large fees while providing financial aid to the less well off. It comes days after Lord Mandelson, the business secretary, told universities they faced a £135m funding cut next year.

"What is crazy is that people are prepared to pay all that money to send their kids to private school – almost £30,000 a year to go to Eton – but they are not prepared to pay the money to go to university," Blanchflower said. "Universities are strapped for cash and need more money. So you make the rich pay the market price and use that money to fund the poor."

The economist is a professor at Dartmouth College in New Hampshire, an American university that is a member of the Ivy League. "People there pay $50,000 [£31,300] a year, the real price of education, and we are flooded with applicants," he said. "But there is financial aid for half the students. We have a 'needs-blind' system [with financial support for families who cannot afford the fees]. That is much more egalitarian than any UK university."

To those who object to charging the middle classes more for university, Blanchflower said: "The poor have been subsidising the rich. And now the rich are shouting because they are losing their subsidy – because they are paying £3,000 to go to Oxford and they should be paying £30,000." Under the system he was proposing, top universities might charge tens of thousands of pounds but others would ask for much less. Students would have to consider the cost against the potential rate of return.

At Dartmouth, Blanchflower claimed fees helped to "focus the mind", with students turning up to lectures, not dropping out and more likely to choose subjects that made them most employable. But while he called on the rich to pay more for university, he also lambasted the government for withdrawing so much funding. "I think for them to be cutting from education right now is nuts."

Ministers said they were unable to comment on Blanchflower's calls because a major inquiry into university tuition fees, chaired by the former BP chief Lord Browne, was under way. Sally Hunt, general secretary of the University and College Union, said it was "insulting" to suggest people should shoulder more of the cost during such tough times.

The National Union of Students warned that such a system could create a "financial gulf" between the richest and poorest universities. Aaron Porter, vice-president of the NUS, agreed in principle with the idea that those who reaped the benefits of university should pay. He said graduates could make contributions during their working lives depending on how much they benefited financially. "So the millionaire graduates that benefit subsidise the public servant graduates that don't."

Others gave a cautious welcome to Blanchflower's intervention. Bahram Bekhradnia, director of the Higher Education Policy Institute, said that a progressive system which supported those who were less fortunate was needed to stave off a funding crisis. But the American fees system could not be imported unchanged, he added. "In the US, higher education is seen as an investment. Here it is seen as a right. "

[AteMoose]

Mad, Mad Mad..... This would cause all rich students to study in the USA instead of the Uk...

[Prime Realist 8]

'Public servant?!

It sounds like common sense on paper for very well off families to pay their own way, but we have seen this play before with income tax in the US. First it was introduced only on the wages of very high earners like the Rockefellers, and of course no one would argue with that. However, this quickly changed in subsequent years so almost everyone was paying it. It is in fact a voluntary tax in law, but try not coughing up and you invariably end up in jail.

[Tiger Woods?]

'Public servant?!

It sounds like common sense on paper for very well off families to pay their own way, but we have seen this play before with income tax in the US. First it was introduced only on the wages of very high earners like the Rockefellers, and of course no one would argue with that. However, this quickly changed in subsequent years so almost everyone was paying it. It is in fact a voluntary tax in law, but try not coughing up and you invariably end up in jail.

These large charges for study also lead to huge wage variance and an increase in the cost of professional services, making them even less obtainable for the "average Joe."

Nuts.

Moreover, there is no way a university education should cost £30,000 per year. FFS, 1 lecturer per 10 students = £300,000 per year per lecturer. If a university cannot run on half or a third of that and provide an excellent education with lots of staff student interaction, then maybe management consultants do have a role to play in this world.

[winkie]

Mad, Mad Mad..... This would cause all rich students to study in the USA instead of the Uk...

Distance learning?

[the_austrian]

You're not paying for the education, you're paying for the prestige. We have the internet now, anything more than £1 would be too expensive.

[frozen_out]

I don't understand the issue. A university believes their product is worth £30k a year. Let them charge it, where's the problem?

This will never happen though. How on Earth will NuLab fulfill their social engineering wet dreams with fully financially independent universities who don't have to pander to bizarre 'inclusive' admissions policies?

[Blackholeshine]

"What is crazy is that people are prepared to pay all that money to send their kids to private school – almost £30,000 a year to go to Eton – but they are not prepared to pay the money to go to university," Blanchflower said. "Universities are strapped for cash and need more money. So you make the rich pay the market price and use that money to fund the poor."

When a person is 18 they are supposed to be an adult. It is all right for parents to pay school fees up to the age of 18 for dependent children, but to jump to the assumption that parents should pay very large fees for adults is taking liberties. A university should charge its students the fees and not the parents of their adult students.

Edited December 27, 2009 by Blackholeshine

[DONKEY2409]

http://www.guardian.co.uk/education/2009/dec/27/wealthy-university-students-pay-more

If further proof we're needed that Blanchflower is a scumbag and a total kn*b here it is, must be music to the labour party's ears though, yet another great way to bash the middle classes.

Edited December 27, 2009 by DONKEY2409

[dothemaths]

These large charges for study also lead to huge wage variance and an increase in the cost of professional services, making them even less obtainable for the "average Joe."

Nuts.

Moreover, there is no way a university education should cost £30,000 per year. FFS, 1 lecturer per 10 students = £300,000 per year per lecturer. If a university cannot run on half or a third of that and provide an excellent education with lots of staff student interaction, then maybe management consultants do have a role to play in this world.

This I am afraid is rather sloppy thinking. The fees at a top 20 private US university are £20-50K depending on the subject. Where do you think the money is going? These are huge businesses with huge turnovers which provide the best research and education in the world.

Infrastructure costs, particularly for the useful science and engineering subjects are a major contributor.

This is the reality, I am afraid - in the future western societies are going to have to choose - either very high up front taxes and free university education for all ( a la the Nordics) or paying up front. The bottom line is the rich will have to pay more. With these huge deficits there is no way the current situation where the bottom half of society subsidises the top can go on.

[DONKEY2409]

This I am afraid is rather sloppy thinking. The fees at a top 20 private US university are £20-50K depending on the subject. Where do you think the money is going? These are huge businesses with huge turnovers which provide the best research and education in the world.

Infrastructure costs, particularly for the useful science and engineering subjects are a major contributor.

This is the reality, I am afraid - in the future western societies are going to have to choose - either very high up front taxes and free university education for all ( a la the Nordics) or paying up front. The bottom line is the rich will have to pay more. With these huge deficits there is no way the current situation where the bottom half of society subsidises the top can go on.

But wouldn t it it be truer to say that a large section of the middle of society is subsidising those below (benefits) the and those above them (tax evasion, banking bail outs), thats why Bogflower's proposal is so unfair, its yet another tax on the poor bl**dy middle class: if you keep taxing them as they are being taxed you will eventually kill the goose that lays the golden eggs, but I suspect that Bogflower and his lefty friends are aware of that and would see it as desirable outcome.

[spivT]

'needs-blind' system [with financial support for families who cannot afford the fees]

i don't know what he means by needs blind, needs blind sounds like the opposite of means tested. That's why the rest of that

sentence confuses me.

[spivT]

I have often thought what is the point of having money if everything you buy is multiplied up so you end up only being able to afford what a poor person can.

Moral hazard cubed.

welcome to nulabour and their 'third way progressive taxation handbook'.

[scepticus]

Given that less than half of all families are net tax payers - how do you work that assertion out?

the bottom subsidises the top by going into debt to the top, by working hard to improve the infrastructure so the top's land goes up in value and then costs the bottom more to rent, and by being taxed more regressively than the top.

the entire system the last 300 years or more transfers wealth from bottom to top, which turned out to be stable while population growth kept the top small with respect to the bottom.

[Injin]

the bottom subsidises the top by going into debt to the top, by working hard to improve the infrastructure so the top's land goes up in value and then costs the bottom more to rent, and by being taxed more regressively than the top.

the entire system the last 300 years or more transfers wealth from bottom to top, which turned out to be stable while population growth kept the top small with respect to the bottom.

odd that, because it's only transfered in that way for the last 30 years in the US....might be something to do with central banking, collectivism and fiat money?

[frozen_out]

i don't know what he means by needs blind, needs blind sounds like the opposite of means tested. That's why the rest of that

sentence confuses me.

'needs blind' means they don't take into account how rich you are when you apply. The phrase they use is 'If you're clever enough, you're rich enough'.

[wren]

Wouldn't a logical extension of this be to force the rich to pay full cost for NHS treatment?

I suppose if they are that rich they don't use the NHS?

[Ruffneck]

cut university funding whilst paying 3rd world countries not to cut down trees

it is over people

[scepticus]

odd that, because it's only transfered in that way for the last 30 years in the US....might be something to do with central banking, collectivism and fiat money?

wrong. bottom to top transfer (as measured by share of wealth and income of top 1%) increased to two maximums, one in 1929 and one 2007.

many other peaks in this measure have accurred during human history, with minima occurring shortly after major wars/re-organisations, such as the mid 60s.

the greed cycle is universal in history and has to do with our nature and social organisation.

should we conquor the existing economic/socialogical challenge (by introducing a cashless economy) I have no doubt a similar crisis due to the greed cycle will manifest itself in due course over the next centuries. However that is a matter for our descendants and one we cannot solve for them today. we can only kick the can.

[scepticus]

Counter intuitively - the richest half actually borrow by far the most and thereby bring the most money into being in the economy. It is the multiplier effect of their borrowing more and more that causes asset prices and wealth to rise - not necessarily the bottom of society who often cannot borrow and exist on cash given to them by the wealthier sections of the populace who have borrowed it into existence.

Just an alternative way of viewing things.

can you provide any sources to back up your claims above? Bear in mind that the duration of the debt called forth is important.

[interestrateripoff]

Another totally insane plan.

Excellent.

[frozen_out]

Wouldn't a logical extension of this be to force the rich to pay full cost for NHS treatment?

The proper logical conclusion is to make everyone pay full cost for everything. However this is in no way in the state's interest.

Another totally insane plan.

Excellent.

I just don't understand how removing price restrictions is insane. University fees are caped for one reason only - financially independent institutions have no reason to carry out the government's nonsense schemes.

Edited December 27, 2009 by frozen_out

[interestrateripoff]

Wouldn't a logical extension of this be to force the rich to pay full cost for NHS treatment?

I suppose if they are that rich they don't use the NHS?

Perhaps charging them by the mile for using the roads in there shiny Rolls Royce as well?

[Injin]

wrong. bottom to top transfer (as measured by share of wealth and income of top 1%) increased to two maximums, one in 1929 and one 2007.

many other peaks in this measure have accurred during human history, with minima occurring shortly after major wars/re-organisations, such as the mid 60s.

the greed cycle is universal in history and has to do with our nature and social organisation.

should we conquor the existing economic/socialogical challenge (by introducing a cashless economy) I have no doubt a similar crisis due to the greed cycle will manifest itself in due course over the next centuries. However that is a matter for our descendants and one we cannot solve for them today. we can only kick the can.

Yes, two central bank actions with imaginary money caused massive welath disparity.

Without them, it doesn't happen.

There can never be a cashless economy.

Edited December 27, 2009 by Injin

[RufflesTheGuineaPig]

Another failed attempt to solve the widening rich/poor divide, without changing the fundamentals that keep the rich rich and the poor poor.

Just give up and tax land you crooks!