Servitude for Students by John Holmwood

Australia’s federal budget of May 2014 shows a familiarity on the part of the Liberal–National Coalition with the higher-education policies of its Conservative–Liberal Democrat counterpart in the United Kingdom. More specifically, it shows a familiarity with the Browne Report of 2010, which recommended the full marketisation of higher education in the United Kingdom and embraced the idea that it was a private benefit for which the beneficiaries should be charged and not a public good with wider benefits that should be directly funded.

Alongside the recommendation that the funding of undergraduate education should be raised from student fees, the Browne Report argued for lifting the cap on student numbers and allowing universities to charge whatever the market would bear, with the proviso that some of that revenue should be devoted to bursaries for students from poorer backgrounds. The Australian federal budget now introduces precisely those two measures that were too toxic in the UK context for the Liberal Democrat junior coalition party to stomach, given that they had campaigned at the election for the abolition of fees. And, of course, the Scottish and Welsh Assemblies have either refused to introduce the changes, as in Scotland, or have introduced them in modified form.

However, the cap on student numbers in England is due to be lifted in 2015 (after the general election scheduled for that year), while vice-chancellors at Russell Group universities (equivalent to Australia’s Group of Eight) continue to lobby for lifting the upper cap on fees, currently set at £9000 and significantly lower than overseas students pay for the same courses. In both England and Australia, the entry of for-profit providers has been encouraged. It is argued that this will help to reduce fees at the lower end and create a spread of fees that would mirror future returns in the labour market. This, in turn, is designed to create higher education as a positional good, where higher fees will be able to support the wider functions of some universities—for example, research—while ‘unbundling’ and stripping out those functions from other universities that will find themselves competing directly with ‘for-profit’ providers.

Australia and England, then, are participating in an unprecedented field experiment in the creation of a neoliberal knowledge regime, elements of which are shared with the United States—although, outside the state of California, the latter did not have an extensive public higher-education system but a mixed model of public and private higher education (including, in the last decade, the expansion of ‘for-profit’ providers). Admittedly, elements of a neoliberal knowledge regime can be dated back in Australia and the United Kingdom to the early 1980s, but the pace of change since 2010 has been dramatic. In part, in the United Kingdom at least, this is a consequence of the politics of austerity dating from the financial crisis and great recession of 2008. The irony will not be lost that a crisis that arose largely from financial deregulation and high levels of household debt should give rise to an unprecedented financialisation and marketisation of higher education and the loading of household debt onto future graduates.

Indeed, English students will, on average, now graduate with the highest levels of debt among all OECD countries. Already within the United States there are arguments that education debt represents a ‘bubble’ similar to that of the housing bubble that preceded the financial crisis, with for-profit providers feeding that bubble. Moreover, it is evident from the United States that the shift from public to private funding has the consequence of both fuelling a dramatic increase in prices (fees) and making students from disadvantaged backgrounds targets of sub-prime and unscrupulous for-profit providers, who see them as bearers of loans. Indeed, the emphasis on the need to compete in a global knowledge economy is accompanied, in the case of Australia and the United Kingdom, by low (and declining) levels of public investment in higher education and research and development, and private-sector emphasis on short-term returns.

It is worth reflecting on the nature of the trajectory involved here. In England, mass higher education was inaugurated by the Robbins Report of 1963 (and a similar program of public higher education was established in California by Clark Kerr’s Master Plan). The Robbins Report articulated clear benefits of higher education. To be sure, these included the benefit to the individual of enhanced employment opportunities and the wider benefit of improving capacity in an increasingly competitive global economy, but other public benefits were endorsed. These were the public value of higher education in producing ‘cultivated’ men and women, securing the advancement of learning through the combination of teaching and research, and providing a common culture and standards of citizenship.

Robbins also considered whether the private benefits were such as to warrant direct payment of fees by students. This was rejected on the grounds of the uncertainty of these benefits in the light of the future shape of the labour market. Moreover, according to Robbins, the wider public benefits were more salient and, in themselves, justified direct public funding. These benefits were also associated with the contribution of the knowledge economy to economic growth, but Robbins was writing in a context of a narrowing of income inequalities. This trend had preceded his report and continued through to the early 1980s, until these inequalities widened again under neoliberal policies of labour-market deregulation and welfare retrenchment, to return to levels more typical of the late nineteenth century. Indeed, rather than a general adaptive upgrading of jobs, the neoliberal global market now produces a polarisation of jobs between good and bad (and no) jobs, with graduate qualifications no longer serving as a secure route to a good job.

The British minister for education and science David Willetts has argued that an income-contingent system of student loans can overcome many of Robbins’ concerns. Under pressure from the Liberal Democrats, the income threshold for repayment was set at £21,000, but at this level it has been calculated that nearly half of all graduates will not repay their loans. Indeed, the system of loans and fees is now estimated to be more expensive in terms of the future costs to the taxpayer than the system of part-loan, part–direct public funding it replaced. But that seems to be the point: that the costs are to future taxpayers and not to present taxpayers. The former don’t vote, at least not yet!

This double burden on future graduates is unstable. For example, although half will not repay their loans, half will and the latter are likely to press for changes in the terms of the loans—for instance, reductions in the income threshold (as is allowed by the legislation and has already happened in Australia and New Zealand following the introduction of fees and associated loan arrangements). At the same time, it is suggested that perhaps too many people are going to university and that there will not be jobs for so many graduates, and so a reduction, rather than an expansion, in numbers would be preferable—a reduction in numbers that would, of course, benefit current graduates and those from socially advantaged backgrounds who would have better access to universities.

When justifying student fees on the grounds that the beneficiary should pay, Willetts posed the question ‘why should an unskilled worker who does not benefit pay for those who do?’ The British Social Attitudes survey had been asking about higher education for some years prior to the Browne Report and the responses were unequivocal and different to what Willetts expected. At fee levels a third of what has now been introduced, 75 per cent thought graduates were left with debts they could not afford, while 65 per cent thought tuition fees should be the same across universities. In addition, 70 per cent thought that a university education provided benefits other than simply a better-paying job. At the same time, 80 per cent thought that children from better-off backgrounds had many more advantages than those from less well-off families. The separate Wolf Report found that 98 per cent of mothers of small children wished their child to go to university. Robbins’ principles of higher education, it seems, have been universalised in the population in a manner contrary to what Willetts thought. The ‘unskilled worker’ supports public higher education precisely because she or he has aspirations for his or her children.

However, in the first British Social Attitudes survey since the introduction of £9000 fees in 2012, the situation had changed. Among those without qualifications, only 11 per cent supported the idea that students should pay for the costs of higher education, and only 19 per cent believed that there should be a reduction in student numbers. Strikingly, among those with graduate qualifications—and it should be borne in mind that these respondents are the beneficiaries of publicly funded higher education—the situation is dramatically different. Now, 42 per cent support the idea that students should pay for the costs of higher education, while 30 per cent believe that there should be a reduction in the numbers studying at university. A future ‘backlash’ against generous loan arrangements, notwithstanding any detrimental effects on participation by those from poorer backgrounds, has fertile ground among university graduates themselves.

Higher education under a neoliberal knowledge regime, then, can no longer be understood to serve the amelioration of inequality. It promotes inequality. Continued demand for higher education feeds off generalised anxiety and the pursuit of advantage in a tight labour market. However, this is not a contingent consequence of higher-education policies conceived outside the academy. University leaders have lobbied strongly for the system that is being put in place while remaining silent about its effects on the nature of the university, not least because they are the direct beneficiaries of marketisation through higher executive salaries and performance bonuses.

This was prefigured by changes to the Californian system of higher education, where it was judged by university leaders that a more secure income could be raised from student debt than from taxes and that ‘above-inflation’ rises in fee income could be secured, albeit by an intergenerational shift in its costs. This system is now in crisis, but the crisis is as much social and political as economic. It might also be considered a moral crisis that strikes at the heart of the university, where an institution with custody for the future, and primarily serving young people, has set itself against their interests.

Bob Meister of the University of California, Santa Cruz, succinctly expresses the problem: ‘our challenge in resisting privatization is to articulate a vision for higher education that makes it an answer to the problem of growing inequality and debt-servitude rather than a symptom, and increasingly a driver, of that problem’. As I have suggested, that vision of higher education is shared by the wider public. For those of us working in universities, our task is to challenge the vested interests in marketisation that have infiltrated the ivory tower and to defend the values of public higher education, the democratic functions of the university and the very academic vocation itself.

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John Holmwood

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