The Department for the Economy has modelled raising university tuition fees to £7,000 a year, from their current £4,630.
This has been proposed in response to the artificial budget crisis, which will be magically resolved once the DUP returns to work. However, it is also being considered to raise money in the longer term, with the assumption devolution is restored – raising fees would be a decision for a Stormont minister.
There is a danger of this framing the argument on fees as an auction, with £7,000 as the opening bid. A new executive could talk it down to £6,000 and then present that as success, or it could just argue endlessly about putting fees up. Either way, it would be missing the point.
Fees need to be equalised to the standard UK level, currently £9,250 a year.
Equalisation, rather than any particular level, is what matters.
Any divergence below the standard rate has to be subsidised by Stormont (devolved governments in Scotland and Wales have made similar choices).
To keep this subsidy under control, Stormont has to cap the number of undergraduate places. That prevents Northern Ireland’s universities from growing, hampers our economy and forces many young people to leave.
Equalisation would sweep away all these constraints. Stormont would save twice as much money as in the modelling exercise, which it could put towards more means-tested maintenance grants for low-income students. Among the many absurdities of subsidising fees is that maintenance grants have been frozen for a decade to help fund a universal giveaway that mainly benefits the middle class.
Alternatively, Stormont could use the extra savings to help low-income students with tuition fees or other loans. Countless options are available for targeted assistance.
The UK fee system has a quirk unlikely to have featured in the Department for the Economy’s modelling. Any student loans that are not repaid are effectively free money for Northern Ireland, advanced to us by the Treasury, yet we are handing far more back to the Treasury to subsidise lower fees. Stormont has managed to find a policy even dumber than RHI.
All the executive parties know this, of course. That does not mean they will ever address it. After the New Decade, New Approach deal, DUP leader Arlene Foster suggested raising tuition fees. She was immediately silenced by the negative reaction from her own party, let alone from others.
Even when the executive unanimously agrees a difficult policy, such as health reform, it can freeze in horror at the prospect of implementing it. Taking unpopular decisions should be an advantage of mandatory coalition – parties cannot be punished if voters have nowhere else to turn. But the urge to break ranks is almost impossible to resist.
Instead, the fee system could evolve in a more subtle, organic or chaotic fashion.
Universities in Northern Ireland already charge three different sets of fees: £4,630 to students from the island of Ireland; £9,250 to students from Britain; and a range of fees around £20,000 to international students.
Because students from Britain and abroad require no subsidy, places for them are uncapped. Universities prize them as a source of income and a means to expand.
What is to stop a university here offering additional ‘full cost’ places to Northern Ireland students, at the standard UK fee?
The student finance company, run by Stormont, may be unwilling or unable to cooperate. But fees can be paid upfront, with money borrowed from anywhere.
Full-cost places might be offered to applicants who had missed the grades for their course, just as it was possible until quite recently to buy grammar school admission.
Grammars have spent two decades thumbing their nose at devolved ministers. Universities are even more of a law unto themselves.
The funding of universities is complicated, involving direct government grants in addition to student fees. Stormont could cut or withhold grants, or not raise them with undergraduate numbers. But full-cost students might still be profitable on most courses – an arts degree costs about £8,000 a year to deliver.
The economic imperative to expand universities comes mainly from the needs of employers. Capping places has caused a slow puncture in Northern Ireland’s economy that is difficult to see day to day. However, it is only necessary to look at the new Ulster University campus, or the student accommodation blocks mushrooming across Belfast, to appreciate the private interests involved and the scale of public demand.
If Stormont cannot keep up, it will eventually be pushed out of the way.