UK universities in trouble - why not add VAT to tuition?

[80smonster]

UK universities are in trouble, apparently many could close, why not charge VAT on tuition fees (for those that are financially viable)? Bridget Phillipson says they are autonomous institutions and won’t be given a public bail out - they should rely on their own resources:
https://www.theguardian.com/education/article/2024/aug/09/english-universities-face-autumn-tipping-point-as-financial-crisis-looms

YABU - don’t add the VAT
YANBU - add the VAT

Who are you suggesting "closely evaluate degree" and decides on their worth? Ultimately universities will keep open courses that make money and close ones which don't. That depends on whether students rather than society in general want to do the course and also the costs of running the course which is very variable. Yes, businesses sometime merge to save money and maybe some universities will too but that is up to them and isn't necessarily what society thinks is best

And I certainly haven't said that those not working in the sector have "no right to comment" so stop ranting about being "shut down". You sound ridiculous.

@wombat15 The default position on many HE threads is “shut up, you know nothing”.

It's a put down as is pp calling me ridiculous . Even ” sounding ridiculous” isn’t engaging with opinion that’s not the same as an a uni employee. All this rubbish about what a Directirvis. Utter one up man ship. Who honestly cares what jobs are styled? We all know the general thrust of the argument. These are, in effect, an offensive put down by the self styled intelligencia. It’s aimed at closing people off from commenting. - too stupid or ridiculous to do it.

I'm also very supportive of unis that support business but they need to have high standards. A few niche courses could be taught at any uni. Just move the staff! Merge into a bigger faculty.

Those who need to make money and pay tax to pay for unis and loans to students should have a voice. It’s important these people are heard. So I’d ask them. I have a feeling an English degree from the uni of Blog would not be their first choice of degree for employees. Students agree as enrolments are going down. So a better match between workplace needs and low tariff degrees would be a start. Plus recognising vast numbers of our grads don’t need a degree at all for their work. They don’t get this level of work. So that’s the starting point. Value for money.

Also if a uni isn’t attracting enough students from abroad, and their business model depends on them, it needs to change! Thats how any business works regarding suppliers. International students supply money. If that dries up, look to get the money from elsewhere. Start doing what someone will pay for. Or close. I might not work in a uni, but I understand business.

If that dries up, look to get the money from elsewhere. Start doing what someone will pay for. Or close. I might not work in a uni, but I understand business.

This would work if universities were allowed to operate as businesses in the truest sense - but we're not. We face restrictions that are out of our control.

For example, I run a course that is never going to attract hundreds of students a year. But that's okay because there aren't jobs for hundreds of graduates every year.
There are jobs for around 30-40 graduates though, and these jobs are graduate level and pretty well paid. It's also a sector where there is a skills shortage so my graduate employment figure is 100% and has
been for years.

5 years ago I needed 20 students a year to be financially viable. This year I have 35 students and the course is at risk of closure.

As a course leader I've not been complacent, I've developed the programme, I've increased student numbers, made savings every single place I can. But it's not enough.
We need to charge more, but we can't.

It's not fair to tell us to operate as a business without acknowledging the number of restrictions put in place that prevent us from doing exactly that.

Also if a uni isn’t attracting enough students from abroad, and their business model depends on them, it needs to change! Thats how any business works regarding suppliers. International students supply money. If that dries up, look to get the money from elsewhere. Start doing what someone will pay for. Or close. I might not work in a uni, but I understand business.

Unis aren't business though. Which you manage to conveniently continue to ignore. We are regulated, with the majority of our product only able to be sold at a price that is worth less than two thirds what it was 10 years ago.

A confectionary company selling bars of chocolate for £1 each in 2010, which was a nice sustainable business model then, wouldn't possibly be expected to be able to survive if it still only charged £1 a bar AND it was also restricted from expanding its range of product! That's the environment HE is in.

Other public services that are run along quasi business lines (utilities, rail companies), are massively subsidised by the government.

I accept your augment that non-experts shouldn't be no-platformed though. But when informed about a particular regulation a non-expert doesn't do themselves any favours by ignoring it. Use the knowledge you've been given and factor it into your arguments!

(And try and back up stuff like 'the majority of graduates don't get graduate-level employment' - because it's wrong - the vast majority do.)

What are the restrictions?

@titchy My argument is where courses have grads that don’t get a certain level of grad employment should be closed! I know the majority do but that’s not what I’m saying. I believe this data needs to be linked to low tariffs and consideration given to those courses closing or merging elsewhere.

@ElaineMBenes Unless your course is the only one in the country, it could merge with a course at another uni. This isn’t rocket science. It’s just not what you want and I get that. However economies of scale etc.

Plus a government can change regulations. Clinging on to what we have now might not be the best idea. As we have seen in the past by the creation of unis and degree awarding bodies, we absolutely could change direction if we want to. Looking at what might work, instead of wailing with your head in the sand, is a better proposition.

Liftimg the cap on student numbers to get more international students is great if they arrive. Not so great if they don’t. Hopefully those well paid VCs and their finance staff, whatever they are called, can work out an answer but more borrowing at the expense of the state might not be the best course of action.

@titchy My argument is where courses have grads that don’t get a certain level of grad employment should be closed! I know the majority do but that’s not what I’m saying. I believe this data needs to be linked to low tariffs and consideration given to those courses closing or merging elsewhere.

OfS already require that though, and have done for several years. It's a condition of registration. Any provider who doesn't manage to get enough students into graduate level employment (and it's considered at subject level so one failing subject can't be propped up by another) could find they can no longer recruit those courses.

I haven't seen any evidence that such courses tend to be those with low tariff points though - perhaps you've seen some?

Plus a government can change regulations. Clinging on to what we have now might not be the best idea

Oh trust no one wants to cling onto what we have now - we are DESPARATE for a change in regulations! No burying of heads in sand at all. Just disappointment that this Gov doesn't seem able to rethink things and it looks like we will be stuck with the status quo for the next few years.

We need more STEM courses and fewer in mickey-mouse subjects like art history and classical civilizations.

What are the restriction

Tell me you haven't bothered to read a thread without....

Your evidence?

Unless your course is the only one in the country, it could merge with a course at another uni. This isn’t rocket science. It’s just not what you want and I get that. However economies of scale etc.

There are 5 universities that offer my course. The nearest is 150 miles away. We offer a particular specialism that no other university does so we're already the leading university in this field. We recruit more students than any other university offering this course.
We also offer blended and distance learning options.

I'm starting to get quite resentful at your assumption that we're not trying because that couldn't be further from the truth. We're not stupid.

You keep talking about 'merging courses' and 'merging institutions' like it's the obvious thing to do. It isn't necessarily the case. It certainly wouldn't work for my course. I'm not saying that because it's not something I want - it wouldn't bother me personally. It just wouldn't work practically and wouldn't be in the best interests of the students.

Plus a government can change regulations. Clinging on to what we have now might not be the best idea. As we have seen in the past by the creation of unis and degree awarding bodies, we absolutely could change direction if we want to. Looking at what might work, instead of wailing with your head in the sand, is a better proposition.

Do you expect us to be mind readers?
Yes, the sector could change direction but that's out of our control.
We have lots of ideas about what could work but again, that's not within our control.
Is it really that hard to understand? It's like talking to a brick wall!

What are the restrictions?

Are you actually kidding?! 🤦🏼‍♀️

Could you provide any evidence or data that supports this?

I haven't seen anyone telling you to "shut up, you know nothing". If you have never worked in the sector and clearly have no idea of how it operates why do you think you have more idea about what will and won't work than those that do though?. Academics are generally very bright and inevitably if they have worked in the field for years they will also know much more about what is and isn't possible. It seems very arrogant to think you know better.

I haven't seen anyone telling you to "shut up, you know nothing". If you have never worked in the sector and clearly have no idea of how it operates why do you think you have more idea about what will and won't work than those that do though?. Academics are generally very bright and inevitably if they have worked in the field for years they will also know much more about what is and isn't possible. It seems very arrogant to think you know better.

Exactly.
I've worked in the HE sector for 20 years both in professional services and as an academic.
As a sector we are desperate for change. It's genuinely shit at the moment and it NEEDS to change.

The assumption we don't want change or can't be bothered to look at ways to improve or become more efficient is just insulting. We can only do so much within the confines of the current regulations and restrictions. That doesn't mean we aren't lobbying for change, because we are, but we're at the stage where universities have very limited options.

Unfortunately this will have a negative impact for students which breaks my heart.

I wasn't commenting on your specific department/ Uni but making a general comment about fees and applications. Of course I understand what is happening in some Unis now and that is very sad for those affected. The point I was trying to make is that, given that we already have falling student applications because the costs are so high and Unis are not thought to offer value for money or (pretty much) guarantee better paid jobs in the way that they did several decades ago, raising fees is likely to lead to less applications rather than more. This is regardless of whether you think burdening our young people with more debt is fair (I think not).
To me, it's pretty clear what the trajectory is, sadly. I've said for some time that I can see reductions in courses and the closure of some (probably lots of) Universities over time. I think the foreign market is saturated and that the improvements in Chinese higher education and the fall in the UK's international standing are two factors in reduced applications. Another is the way in which some Unis dealt with teaching during the pandemic, which many feel did not provide value for money.

The point I was trying to make is that, given that we already have falling student applications because the costs are so high and Unis are not thought to offer value for money or (pretty much) guarantee better paid jobs in the way that they did several decades ago, raising fees is likely to lead to less applications rather than more.

Where's the evidence for this though? The application rate of 18 year olds for the last couple of years is down (probably lingering Covid effect), but has increased year on year for the last 20 plus years. Even when fees tripled in 2012, by 2014 the applicant rate was back on the same trajectory. 18 year old demand is remarkably non-elastic!

Different behaviour from the mature 'market' of course, but this is an area where employers can definitely do more to stimulate demand - if Gov let them use their apprenticeship levy more flexibly this could be great for unis, employers, students and local economies alike.

The point I was trying to make is that, given that we already have falling student applications because the costs are so high and Unis are not thought to offer value for money or (pretty much) guarantee better paid jobs in the way that they did several decades ago, raising fees is likely to lead to less applications rather than more. This is regardless of whether you think burdening our young people with more debt is fair (I think not).

Student numbers are dropping due to demographics not cost or perceived value for money. Increasing tuition fees did not see a significant drop in applications (there was a slight drop the first year but that can largely be attributed to more people going in 2011 to avoid the higher fees). What has changed is where people study with cost having a direct impact. More students are choosing to live at home and study at a local university.

I recently carried out some research on university choice and it was very clear that young people still view university as the best route to improve their employability. And before you accuse me of being biased towards higher education, my recommendations included increased information, advice and guidance on alternatives to HE specifically apprenticeships.

You (and others) keep talking about the value of HE and huge numbers of graduates not benefitting from getting a degree. Where is the evidence for this?

Because the (independent) data tells us that the vast majority of graduates DO go into graduate level of employment.
Those that aren't in graduate level employment at the census point are often still in roles which will lead to higher pay and a graduation profession and they are clear that their degree was beneficial.

Different behaviour from the mature 'market' of course, but this is an area where employers can definitely do more to stimulate demand - if Gov let them use their apprenticeship levy more flexibly this could be great for unis, employers, students and local economies alike.

Completely agree!
And they could make setting up higher apprenticeships easier. I'd love to run an apprenticeship version of my course and there's a huge demand for it but it's so difficult! And not cost effective at all.

'Where's the evidence for this though? The application rate of 18 year olds for the last couple of years is down (probably lingering Covid effect), but has increased year on year for the last 20 plus years.'
At present, I would suggest that the evidence is the falling application rates of the last two years. Let's see what happens in the next 5-10 years. I can't see them starting a consistently rising trend again personally but perhaps I will be wrong.

'Student numbers are dropping due to demographics not cost or perceived value for money.'
Again, you are simplifying. There are many reasons. Demographics is one. Cost is another. A perception of reduced value is a third.
The degree has been devalued because so many young people have one nowadays. In order to get extremely well paid, competitive jobs, you need top degrees from top institutions and various other skills. There are many graduates who struggle to get graduate entry jobs and wages in general have stagnated in many fields since the GFC, as I'm sure you know. How much evidence is there in the last 5 years that graduates, across the board, earn significantly more than those in, say, reputable trades? Many people in trades have done very well in the last 20 years, can start work in some form at 16, have no debt whatsoever and can live in their parents's home and save money. The situation now with regards the value of a degree is nothing like it was for my generation or my parents's generation.

Again, you are simplifying. There are many reasons. Demographics is one. Cost is another. A perception of reduced value is a third.

Evidence?

I don't work in HE nor do I do research for Universities.
You can stick your head in the sand if you prefer but I think things are definitely changing in the sector, I'm afraid.