> Many solutions to the ‘higher education question’ are being suggested, but what do they all mean for students and the future of Britain’s universities?

The contentious question of how higher education should be funded has rarely been more prominent than now, as Britain awaits the results of the Lord Browne’s Spending Review 2010.

Exactly where the axe is to fall will be revealed on October 20th, as the Coalition scrambles to claw its way out of a £180 bn deficit. Higher education is a sector likely to face cuts, a reshuffle of funding practices and or regulations. Other areas expected to be slashed, by as much as 25% in some cases, are welfare, transport, defence and the police service.

The government has stated that the current system of university funding is “not fit for purpose” and within discussions of alternative solutions one phrase keeps popping up, ‘graduate tax’. But what is it and what are the other solutions are being suggested?

The graduate tax is a system whereby rather than paying set fees as you go through university and borrowing in the form of fee loans, repayment for your education is calculated as a percentage of your earnings once you graduate. The recently elected Labour leader, Ed Miliband, suggested somewhere between 0.3 and two per cent of earnings, should Labour be re-elected. University think-tank Million+ stated in a report that a levy of one percent of earnings over £15,000 “would reduce student debt by at least £10,000”.

The National Union of Students (NUS) President, Aaron Porter, states on the NUS website that “A graduate contribution that would be much more progressive and would remove the threat of higher fees and the introduction of a market into higher education.”

UWE Deputy Vice-Chancellor, John Rushforth, told Western Eye

“The down side to the graduate tax is that it is forever and is unrelated directly to the university. The University has no direct financial connection to the student and therefore may feel less accountable. It would be possible for high earners to pay much more than a loan based system and a considerable amount more over their lifetime.”

Another perceived problem with a graduate tax is that collected funds would not be funnelled directly back into the institution that the student attended, but rather back to a central government pot. This means that there would be no guarantee that the funds would be distributed evenly, in appropriate quantities and value, or even be used within the higher education sector.

The Higher Education Act 2004 increased tuition fees from £1,000 to £3,000. Increasing the cap for tuition fees again, from say £3,145 to £5,000 could theoretically ease the financial strain on universities. Unfortunately, a large number of students require some form of financial support, increasing the cap on fees may result in a sliding scale of institution based on economics. A much larger increase in the cap on fees would possibly create a wide range of disparity in institutions and courses.

“It increases debt but if student support increases to meet that then it probably would not make a great deal of difference to participation.  However, given the cost of student support, it is highly unlikely that student support would increase fully in line. If the fee cap goes up significantly, then we may see a sliding scale of universities, charging varying fees, with possibly different fees for different courses” Mr Rushforth said on increased fee caps.

The increasing cost of university alarms many that fear only the rich will be able to afford a degree; or at least, only they will be able to afford certain courses and institutions. Mr Rushforth stated that “If there was a very high cap on fees and inadequate support, this could mean only the rich being able to afford to go to the more expensive universities.”

Sir Peter Lampl, chairman of the Sutton Trust, an educational charity in the United Kingdom that provides educational opportunities to young people from non-privileged backgrounds, stated in an article for online politics magazine politics.co.uk “Any future finance system that deters poorer students from top degree courses because of spiralling costs and freezes on student numbers will be a double blow for social mobility”.

A totally free market in higher education is something that many have said would be grossly unfair, but in the United States, where elite universities such as Harvard and Yale charge what they like, the super-rich pay enormous fees with much of this money being recycled in the form of generous bursaries and scholarships for promising yet underprivileged students.

While admitting that “With appropriate safeguards, the free market can in some circumstances be fairer” Mr Rushforth warned of an “Easyjet syndrome” where courses that have failed to draw many applications become cheaper, but then rise in price considerably as they fill up. “This may result in social injustice issues” he said.

Aaron Porter said, in an article in The Guardian, that the removal of the cap would be “a nightmare for students and their families”, in light of suggestions that some universities want to increase fees by as much five times.

“Top-up fees were tripled four years ago and the public will not tolerate a further hike, fortunately a great many politicians have pledged to oppose higher fees and we will hold them to their promise to prevent the emergence of a damaging and destructive market in fees that would entrench privilege and benefit a narrow elite.”

A graduate tax is touted by many as being the fairer of the many suggested options, by not squeezing the less privileged out of higher education and drawing from those that can afford it. Sally Hunt of the Universities and College Union (UCU) suggested in The Guardian that big business should start contributing to higher education as they are a sector that benefits from graduates substantially. Exactly how this would be levied is unclear.

Whichever way the issue is framed, the cost of education is going up regardless of pledges to the contrary; one way or the other it has to be paid for. Make the most of your degree, as you could well be paying for it until you retire.