OECD: opening the market door will prove costly

Source: Alamy

This is a job for…actually, that won’t cut it: US costs have ‘nothing to do with value’, Andreas Schleicher argues

“Totally unreasonable” US tuition fees offer a stark warning about what happens when higher education is left entirely to the market, so England should maintain state regulation of its system, according to the Organisation for Economic Cooperation and Development’s most senior education expert.

Andreas Schleicher, deputy director for education and skills, made the comments at a press briefing in London on 24 June ahead of the publication of the OECD’s annual Education at a Glance report the following day.

He also clarified that comments he made last year – apparently interpreted by David Willetts, the UK’s universities and science minister, as OECD endorsement of coalition policy – did not refer to the country’s post-2012 system.

The OECD report compares education statistics from its 34 member states, with the most recent information largely dating from 2010.

This year’s report shows that the US is once again the biggest spender on higher education as a proportion of gross domestic product, having been level with South Korea last year.

The US spent 2.8 per cent of GDP on its academy in 2010, up from 2.6 per cent in 2009. The rise came from increased private spending (tuition fees continue to soar in the US), which is now equivalent to 1.8 per cent of GDP.

The UK spent 1.4 per cent of GDP on higher education in 2010 (0.74 per cent public, 0.63 per cent private), up from 1.3 per cent in 2009 but below the OECD average of 1.6 per cent.

Mr Schleicher said data showed the US system “becoming more and more expensive” while making little progress in terms of the number of graduates produced.

He warned that “once you open the door and let the market regulate that entirely, you’re going to see what you saw in the US. It’s a totally unreasonable cost structure that has very little to do with the value actually provided.”

He said: “Nobody can tell me that the tuition…charged by some US universities has anything to do with the value that is actually added.”

Oh no, we didn’t mean the reforms

At the press briefing for last year’s Education at a Glance, Mr Schleicher praised England for having “probably the most advanced system” of student support in the OECD.

Mr Willetts cited the comment in the House of Commons in September 2012 and told MPs: “The OECD actually believes that our proposals are a way of continuing to ensure that a good number of people go to university even when we are having to save…funding.”

But Times Higher Education asked Mr Schleicher whether his comments referred to the pre- or post-2012 system.

Under the latter, fees have been raised to £9,000 and direct public funding for teaching has been abolished in most subjects.

He replied: “Our data do not cover the post-2012 fees system. We are talking still about the £3,500 fee regime. That’s very important to keep in mind.”

Mr Schleicher added: “When we have data about the 2012 structures, we will talk about them. The only thing to bear in mind is that you have to be really careful. There is a strong reason for governments to actually regulate that system and not leave it entirely up to universities.”

The OECD’s report shows that, even in 2010, 74.8 per cent of funding for UK higher education came from private sources (see table above).

“Only Chile [77.9 per cent] raises a larger share of total spending from households,” said Mr Schleicher.

However, he added, unlike in the South American country, the UK’s private funding is “backed up by government funding” in the form of student loans.

Education at a Glance also notes that between 2005 and 2010, the UK’s spending per student fell by 3 per cent against an 8 per cent average rise across the OECD.

The UK was one of only five nations, out of 31 for which data were available, in which funding per student fell.

john.morgan@tsleducation.com