State control is holding back our Third Level Education

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Below is an edited version of the speech read by Cillian Fleming representing the Hibernia Forum (pictured above) in a discussion on third level education at the Young Fine Gael Garret Fitzgerald Summer School on 15 July 2017.

Today I have a quite a difficult challenge, that is to convince – if I may so assume – mostly middle class college students that middle class welfare, in the form of free or subsidized third level education, is not a desirable policy, and indeed is one that leads to less than desirable results.

In modern political discourse the biggest mistake people make is to measure the policies by their intentions rather than their results. We often get taken away by the rhetoric about nice sounding ideas instead of actually looking at them in detail and in effect. The debate around third level education in Ireland is no different. Nice sounding high-minded ideas fill public discourse on the subject, ranging from “free education for all” to “knowledge economy”, going unchallenged despite completely ignoring the underlying issues of our third level education.

The relative low quality of our tertiary education sector is attributed to lack of funding, as opposed to recognizing that our colleges, like every other underwhelming sector of the Irish economy are victim to the same issue – state planning.

The problem with our third level education system is therefore twofold, the first is our subsidization of college fees – the second is the fact that the universities are part of a state run system. These in tandem lead to a number of problems in our education system, and therefore problems across our economy and society as a whole.

Subsidization

The most obvious issue with the current system is the intrinsic problem that comes naturally from every subsidy. That is, that it advantages one group at the expense of another. Now, despite the rhetoric that comes from Students Unions and the left, the people whom free fees advantage the most are wealthier families and it is at the expense of low-income working families. Why? Because the simple reason that it is a subsidy from the non-college educated working elements of society to the college educated elements of society.

Now, the obvious question that comes from here is “Well, doesn’t college become more accessible to the poor by being free, thereby making it more likely that they can attend?” – the answer to this is: Not necessarily. The evidence suggests that free tuition isn’t actually all that – for the lack of a better word –  progressive. The UK provides the perfect example for our discussion today. To those who aren’t familiar with it; Scotland abolished tuition fees 10 years ago, whereas England have been increasing theirs substantially over the last number of years thereby moving towards a more student-loan orientated system.

The logic of the anti-fees movement would be that college attendance by the poorest in England would be lower than in free-fees Scotland. After all, it’s what most would expect. According to the Universities and Colleges Admissions Services, in 2006, prior to the increase of English college fees and the abolition of Scottish fees, 12.2% of students applied for colleges from the most disadvantaged areas in England while an abysmal 9.6% of Scottish students from the most disadvantaged areas applied to attend University.

Last year, despite huge fee increases in England, and fee abolition in Scotland, these figures were 22% in England and 15.9% in Scotland. While it’s good news that attendance is up for the most disadvantaged in both countries, the gap in attendance from the poorest areas in both countries has actually more than doubled since the introduction of free-fees in Scotland.

Additionally, in Scotland, advantaged students form a larger proportion of the student base than in England, there are more than 2.6 rich students for every poor student in Scotland, while there are only 2.3 rich students for every poor student in England.

Therefore, the fact of the matter is that free tuition is the perfect middle-class feel-good policy. It’s superficially universal, it benefits wealthier families at the expense of poorer working families both from the point of view of transferring wealth and also from the point of view of college attendance.

The solution is this: Let the individuals who benefit from the degrees, pay for them. Don’t redirect money from productive low-income families to the antithesis of productivity, humanities departments.

Subsidization & Distortion

What’s more, the effect of subsidies is to incentivize certain human action. This is because the cost of engaging in certain behavior has now become artificially cheaper, making it more likely people will engage in it. University education is no different. Subsidizing people to go to university makes more people go to university.

Many might think this a good thing – but is this really desirable for a society and an economy? After all, what are the benefits for the economy for more English or Gender Studies graduates? What are the tangible benefits for society overall? Despite the Trojan efforts of academics to justify their existence, I would argue that they’re tenuous at best – if not downright damaging.

Think about it this way. When more people have college degrees, the value of the college degree becomes devalued. Jobs which 20 years ago required no degree – think jobs as a bank teller – now require one. Anecdotally, amongst those who graduated from my course the same year as me, people with master’s degrees outnumber those without. Does this additional education make people better off? I would argue no – except for the third level sector who stand to benefit from this arrangement.

Secondly, there’s the giant opportunity cost problem. We are taking thousands of non-academic people out of the workforce for 3-4 years and filling their heads with things that they’ll forget the second they walk out of their summer exams. While the benefits of college education prior to entering the workforce are obvious in certain disciplines, law, medicine, accounting, dentistry, this is not the case for others.

Moreover, people typically learn their most valuable skills on the job – practical skills that are learned in a working context far definitely outweigh those you learn in third level education. At present in this country, we send people into an education system at the age of 4/5 only to leave it around 22/23. Once they’ve left the education system, they might have great ideas as to how to solve the Chechen conflict, but they’re not functioning adults ready for the world of work until after a couple of years on the job.

The solution to this is that we need to actually create a system that only incentivizes people to do third level education where it’s worthwhile. As a society we need to end this educational arms race and return to the days of practical training and vocations – leave academic pursuits to the academically inclined!

The second major problem comes in the form of our third level education system being state run.

As with every other institution run by the State, we have a quality problem at third level. Our universities rank poorly in international rankings. We pat ourselves on the back whenever Trinity enters the Top-200 universities. Again, as with every other institution run by the State, we blame low quality on low levels of state funding.

More funding is the same cure that people call for whenever there’s a problem with the health service, the Gardaí, roads, and so forth. Yet, despite government budgets trebling in size over the last 20 year, we can’t really say that the services are much better – and they’re definitely not three times better. Therefore, it’s correct to be skeptical of increasing funding being the cure.

The problem with anything that’s state run is that they are missing an incentive. Management has less incentive to watch the college thrive than the owner of a business. Employees don’t have as much of an incentive to work as those privately employed. Course organizers don’t have an incentive to provide courses which are required by employers.

The fetishization of third level education by policy makers across the developed world has led to an entire industry of redundant academics. State intervention in this area has spawned the birth of crazy and pointless disciplines, particularly in the humanities. Over 82% of humanities papers are not cited even once.  

This leads to disastrous results when coupled with the issue of subsidies for students. When somebody else is paying for it, students don’t opt to choose courses that are in their best interest. Colleges don’t have any incentive to provide courses that are in students’ best interest either.

Instead, we see students selecting economically redundant courses and colleges providing more and more places to them. This damages society more broadly, creating educational inflation, take 1000s of people of prime working age out of the workforce, losing valuable years of experience and earnings. This is even before the cost to the taxpayer.

How do we solve this?

I would propose a mechanism whereby the of university funding we currently have is replaced with an equity-based scheme – where the universities themselves have a direct stake in the future of their graduates. Taking taxpayers out of the equation entirely, a contract would be drawn up between the student  and the university – with the student  agreeing to pay back a certain proportion of their income for a number of years after graduation in return for the universities internalising the cost of the courses upfront.

In other words, it would act like a temporary tax but with the funds going back to the institution – and the practical consequence would be those on the highest earnings paying more.

This approach would have the following benefits:

  • It gives universities a stake in their students, one which continues after graduation
  • This would incentivize improvement of our educational system
  • Universities will have a legitimate interest in the employability of their graduates
  • It would allow for greater experimentation within the education sector, not having everything decided by state diktat
  • It would facilitate price competition between universities.
  • Unlike “the graduate tax”, students who avail of it will be contractually liable for it everywhere in the world

I’m aware my views on this topic are outside the Overton window of political discourse in this country, but my hope here today is that I have convinced at least a few of you to reconsider the State’s role in third level education – or that I have at least somewhat challenged your preconceptions. Youth wings of political parties are often the places where new ideas get fleshed out and become acceptable over time. Thank you all for your attention.

These remarks were written by Cillian in a personal capacity and do not reflect the views of his employer.

More on Cillian Fleming:

https://ie.linkedin.com/in/cillianfleming

Tweets at @clpf1