Thursday, 27 October 2011

Universities - time to be leaner and fitter?

The news that University applications fall 9% after tuition fee hike (Daily Telegraph 24/10/11) should neither surprise or concern us.
With tuition fees increasing from just under £3,000 p.a. to an average of £8,678 p.a. (Guardian 18/04/11), one would expect to see the reduction in applications. Furthermore, this is unlikely to be a temporary blip: there is little doubt that we are going to see a reduction in the number of young people who are willing to put themselves into significant debt in order to have a university education.
I have believed for a long time that too many young people are going to university. It has taken the recession, graduate unemployment, student debt and now increased tuition fees to focus minds, but the early indications are that we are about to see an important shift in how we view Higher Education. HE is going to contract and, in many cases, it will be driven by the customers, the students, rather than by the suppliers, the universities. Most importantly, young people now are being forced to see university as a time when they are making an investment in themselves
The Value of a Degree
The value of a degree can be determined by the following three factors:
  1. The quality and reputation of the Institution
  2. The quality and reputation of the Subject
  3. The class of a degree
I welcome the news that University applicants facing tuition fee hike avoid softer subjects (Daily Telegraph 24/10/11). For too long too many young people have not done the research into what advantage their degree will give them. "Softer university subjects such as communication studies and creative arts have seen a drop in applications of up to 40 per cent." - Hurray!  Why should tax-payers subsidise these sort of courses? It is no surprise that we are seeing a shift to the more academic courses at the better institutions. 
Universities are going to have to raise their game too. If students are paying £9k p.a., then they are going to expect to be getting something for their money - cancelled lectures and large tutorial groups, poor lecturer feedback become all the more unacceptable when you are paying personally for it. Students will vote with their feet - well taught courses leading to good jobs will be popular, poorly taught courses with poor employment prospects will not be viable.
Higher Education will consolidate around quality and value.
One of the consequences of the reduction in numbers is that students will gravitate towards quality and value. The top universities will continue to expand, to grow and thrive.  Universities at the lower end of the food chain are going to find it increasingly difficult to fill their places. (This is a phenomenon that we have experienced in the Independent Schools sector during the past twenty years as fees and costs have risen and customers have become better informed.) 
In the long term less successful universities are going to be faced with increased specialism based around niche courses, departments closing, universities merging with other institutions and, in some cases, closure. But before that happens, as with all markets where there is over-supply we are going to see the price fall. This will happen in two ways. First, some institutions will compete on the price of their fees - i.e. by lowering their tuition fee; and secondly, others will reduce their entrance tariff - lowering the entrance requirements for certain courses.

So what does this mean for those young people who will be applying in the next few years? 
Getting a place at a top university is going to be as competitive as ever. Applications to Oxbridge are up this year, and we can anticipate that this will be the case with all of the top 20 universities.
However for weaker pupils who are willing to invest in themselves, it is probably good news. At present it is really difficult to get onto any sort of meaningful degree course with grades less than CCC (= 240 points).  This will change - an A-level candidate with CDD will be able to get onto a significantly better course from Sept 2012, than has been the case during the past couple of years.

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