Time to deliver universities a fit for purpose funding formula

Harrison Griffiths writes in CapX

IEA Communications Officer Harrison Griffiths has written for CapX on proposals to reform the higher education funding system.

Referencing the IEA’s new paper Setting Universities Free, Harrison wrote:

“As the report lays out, taxpayers are forced to pay the £19bn per year upfront cost of tuition fee subsidies, of which around half will never be paid back – a liability insured by future taxpayers. Does the current system deliver a strong return on that investment? I’m afraid not. As with so many areas of government spending, we have been the victims of daylight robbery.”

Harrison emphasised the importance of incentives, writing:

“Under the report’s proposals, universities would be incentivised to enter cost and income sharing arrangements, whereby students would pay back their loans directly to universities based on their future earnings. This would marry the interests of universities with those of their students, making the success of the school contingent on the success of their pupils.”

The full article can be read here.