As students take to the streets calling for free higher education, a spotlight is being shone again on the sustainability of England’s higher education system. While much of the debate centres around financial sustainability following the publication of a new report by the Higher Education Commission (HEC), if universities did more to become environmentally sustainable they could also reduce costs.
The present higher education funding system has pushed the financial burden onto the young shoulders of students who may find it easiest to think of their mounting colossal debt in terms of monopoly money. A 2014 report by the Institute for Fiscal Studies (IFS) predicted that only 45% of graduates will repay more than they borrow in real terms and that 73% graduates will not repay in full.
What financial alternatives?
The HEC study suggests a range of alternative funding measures to achieve financial sustainability. Since 2012, the majority of university courses charge tuition fees of £9,000 per undergraduate academic year, with a few exceptions such as the Open University which charges £5,264. The typical student also needs to finance living away from home expenses of approximately £10,000 per year.
Maintaining this status quo means that the first graduates with post-2012 loans from 2015 onwards will experience a debt noose that the IFS predicts will tighten in their 40s and 50s, especially once salaries hit a salary threshold of £41,000 (in today’s money) when the debt will grow at 3% plus inflation.
Expect significant levels of stress as graduates face the regular headache over the question of whether to try to repay their debt quicker. Expect the conditions of the student loan stranglehold to create conflict with their career aspirations as some try to avoid earning enough to pay off their loan. This will have unintended socio-economic impacts.
Free higher education for students is highly unlikely in the present austere economic climate with high student numbers and significant costs associated with accommodation and transport as well as tuition fees. Greater direct government subsidy for university might be students’ preferred option, but this would affect university financial controls.
One alternative measure considered by the HEC study is lowering tuition fees to £6,000 to reduce student debt – a proposal being mulled by the Labour party. As loan repayment is income contingent this would principally benefit higher earners, although it would reduce the psychological debt burden for graduates.
Another proposal to remove the £9,000 upper cap on fees and allow universities to start charging more could mean many graduates will have to repay more than they borrowed in real terms. By my calcuation, a student on a three-year course taking the maximum loan would already see their debt rise (if we assume interest is 3% plus RPI 2.5%) to over £48,000 by the time they graduate, and to nearly £66,000 if they take a four-year course. This will continue to grow over the next 30 years.
The HEC also mentions the alternative of a graduate tax. While many might prefer this, it could lead to a massive export of graduate talent to work in other countries, seeking tax avoidance. A graduate tax funding mechanism could also attract large numbers of EU students that would prove very costly to the taxpayer and put unquantifiable pressure on the sustainability of the higher education system.
Move online could cut costs
A major omission in the HEC study is any consideration of how different higher education teaching models could contribute to the sustainability of the university system. The SusTEACH research project examined the impact of technology on higher education teaching models. We conducted an environmental assessment of the impacts of 30 courses and modules using different teaching models. Although this research focused on environmental sustainability, it has implications for financial sustainability as financial costs and environmental impacts are closely related.
We collected data on travel, the purchase and use of information and communication technology and paper materials, residential energy consumption, and operations on campus. Lecturers helped classify the kind of teaching primarily used – such as face-to-face, online or hybrid models – and the results were analysed in average energy consumption and CO2 emissions, per student per 100 study hours. As expected, the findings showed that the main sources of energy consumption and CO2 emissions per university course or module were travel, residential energy consumption and campus site operations.
We also found that the use of technology-enhanced, online and classic distance teaching methods were able to reduce sources of energy consumption and achieve significant CO2 reductions in comparison with face-to-face teaching methods. New online teaching models could be used to reduce the need for student travel and residential and campus accommodation, and so reducing financial costs as well as energy consumption and CO2 emissions.
We could also think about designing university degrees to reduce financial and environmental impacts. Why are most academic years so short when quite often students are obliged to pay for accommodation pointlessly during the long “holidays”? One option would be to offer more degree options, including compressed degrees to align teaching and learning with the availability of residential accommodation. A year’s worth of student debt could be reduced with a little imagination.
It is important to think of more innovative ways to design a higher education system that is both financially and environmentally sustainable. Much more could be done to reduce student debt and address demands for inter-generational justice.