Higher Education Strategy Associates

Category Archives: Europe

August 24

Welcome Back

Morning, all.  August 24th.  Back, as promised.

School starts shortly.  The new crop of frosh were born in 1997, if you can believe that – to them, Princess Diana has never been alive, and Kyoto has always been a synonym for climate change politics (check out the Beloit Mindset List for more of these ).  Stormclouds line the economic horizon.  It’s going to be an interesting year.

In the US, progress on any of the big issues in higher education are likely to be in suspension as the two parties spend months figuring out who their candidates are going to be.  On the Democratic side, the presumptive candidate, Hilary Clinton, has put forward an ambitious plan for higher education, which, barring an absolute sweep at the polls, has almost no chance of passing Congress.  On the Republican side, no one apart from Marco Rubio seems to care much about higher education, except for Scott Walker who seems to want to use higher education as a punching bag, much as his idol Ronald Reagan did fifty years ago.

Overseas, the most consequential potential development is in the UK where – if the government is to be taken at face value – for the first time anywhere, measured quality of teaching might meaningfully affect institutional resources. In the rest of Europe, the ongoing economic slump looks set to create new problems in many countries: in Finland, where GDP contracted for the third year in a row, government funding will be down roughly 8% from where it was last year.  And that’s in one of the countries that thinks of itself as being particularly pro-education.  Germany, Sweden, and (maybe) Poland look like the only countries that might resist the tide.

Here in Canada, the outlook remains that post-secondary education will continue to see below-inflation increases in government funding for the foreseeable future, except in Alberta where the new provincial government intends on giving institutions a big one-time boost, which may or may not be sustainable, depending on how oil and gas prices fare.  This means resources will be scarce, and in-fighting for the spoils will be fierce.  And this, in turn, means a lot of governance, a lot of wailing about “corporatization” (always a good epithet when funding decisions aren’t going your way), and – inevitably, given the recent events at UBC – a lot of arguments about resource allocations, dressed up as arguments about governance.

(In case you’re wondering: I have no idea what happened there, exactly.  I do, however, believe three things: i) in a corporate context, the statements by the Board of Governors and interim President on Gupta’s departure are actually quite easily interpretable, and don’t leave a whole lot to the imagination; ii) if/when the truth comes out, it’ll be a hot mess of grey zones, and some of the wilder conspiracy rhetoric about the departure will seem ludicrous; and, iii) any theory positing that Gupta was fired for a lack of “masculinity” by a Board Chair who not only spent millions of his own dollars to create a dedicated Chair on Diversity in Leadership, but also that replaced said “unmacho” President with Martha Piper of all people, has more than one prima facie credibility problem.)

But behind all this, there’s a broader truth that I think the higher education community is being very slow to acknowledge.  The era of growth is over.  Higher education is not a declining industry, but it is a mature one, and this changes the nature of the game.  In the aughts, Canadian university income increased faster as a proportion of GDP than pretty much any country in the world (Netherlands and Russia aside).  It was a rising tide that raised all boats.   And I mean that literally: as a share of the economy, universities grew by half a percentage point (from 1.4% to 1.9% according to the OECD, which I think is a bit of an underestimate), which is like adding more than the value of the entire fishing industry.

But those boats stopped rising a couple of years ago.  Institutions with smug strategic plans about increasing excellence need to face reality that there’s no new money with which to achieve those goals: funds for new projects are, for the most part, going to have to come out of increased efficiencies, not new money.  It’s tougher sailing from here on out – permanently.  Institutions are going to need to be leaner, better managed, and more focused.  However, the meaning of those terms are hardly uncontested in academia.

This should make for a fun year.  Looking forward to it.

April 28

Trust, Transparency, and Need-Based Aid

If you look around the world at the kinds of subsidies made available to students, you’ll be struck by the fact that there are two very large chunks of the world where need-based aid isn’t the dominant form: post-Socialist Europe and Africa.  The reasons for this boil down to a simple issue: trust.

In the post-socialist countries, the preference for merit-based aid over need-based aid is a relatively recent affair.  Prior to 1990, access to university was restricted both in absolute numbers and on ideological grounds: in order to attend university one had to have correct “origins”.  This was another way of saying that if your family was considered too bourgeois, you weren’t allowed to attend (Vaclav Havel, for instance, was denied entrance to university on these grounds).  Though regimes eased up on this somewhat as the 70s and 80s progressed, class origins continued to play a role in admissions up to the end of the regime.

So when it came time for new, post-socialist regimes to come up with student aid policies, there was considerable suspicion about anything that looked like it discriminated based on something like class.  Preferences based on parental characteristics, quite simply, were too tainted by communism to be a viable political project: nobody trusted government to discriminate between students based on something like income.  Merit-based aid, on the other hand, was not so burdened by history, and gave the appearance of being “objective” in the sense that exam results were measured in a consistent way across the country, and could easily be used to differentiate between students.  The results, in a word, were trustworthy.

In Africa, the trust problem is slightly more complex, and less tractable.  There, the state lacks the ability to monitor individuals’ income and consumption through the tax system.  Trying to run a need-based system of aid without means of income verification is difficult, to say the least (in bits of Eastern Europe – especially Russia – income verification poses the opposite problem in that people are reticent about providing documentation that would help the government verify income).  Without income verification, need-based systems tend to rely on proxies like ownership of land or livestock, which is either very complicated or impossible to verify.  These systems quickly fall into disrepute: because it is possible to cheat them, everyone comes to assume that those who receive need-based aid have cheated.  And so again, something simple and transparent – like merit as measured through examination results – becomes the de facto standard.  Everybody knows it’s ludicrously regressive, because the awards inevitably go to students from families rich enough to pay many multiples of university tuition to attend the best secondary schools, but at least it’s transparent and not corrupt.

Japan has a similar issue: it has no need-based grants, because no one trusts that the tax system accurately captures parental income.  It does, however, have a need-based loan system.  When I asked someone senior there about why they trusted need-testing for one and not the other, he simply said “because people pay back the loans”.

All of which is to say that need-based aid requires that students and families trust that state institutions will deal with them fairly, and state institutions need to trust that families won’t try to lie to them (or, at least, have reasonably robust measures of discovering lies).  In Canada, we take this for granted, but we shouldn’t.   Without trust, and the transparency that tax-based verification tools provide, need-based aid simply wouldn’t exist.

March 26

Three Stories to Watch in Europe

Europe’s been reasonably quiet for the last few months as far as higher education is concerned, but there are now a number of interesting stories to watch.

Here’s the lowdown on three of them:

In Hungary, the ruling right wing Fidesz party has announced a wholesale change to the way it would fund higher education.  It’s looking to abolish (within the state system at least) a number of courses deemed to be “non-productive” (e.g. communications), and requiring others to become fully tuition-fee funded.  Tuition fees have a complicated history in Hungary.  Hungary adopted tuition fees in 1996, and applied them in a dual-track fashion (kids with good secondary marks could go for free, others could attend the same courses if they paid a fee).  In 2008, a voter-initiated referendum was held on the abolition of tuition fees, which passed by a 4-to-1 margin.  But this was never implemented: the party that promoted the referendum – Fidesz – promptly attained power and reneged on the deal (much to the relief of the universities who relied on the fees).

It’s fair to say that since attaining power, Fidesz’s policies towards higher education have been pretty nightmarish.  The number of funded places has declined by more than half; an attempt in 2013 to make free places contingent on students signing an agreement to work in Hungary for twice the length of their university course was foiled only by the European Commission (which took a dim view of the attempt to restrict mobility rights).  The attempted 2013 reforms drew sustained opposition from students and faculty – a rare event in a country where the governing party has a massive majority.  We’ll see how this new policy plays out.

In the Netherlands, there is a simply fascinating student uprising going on against “managerialist” universities.  It started when the University of Amsterdam announced that a number of different courses in the humanities would merge into a single liberal arts program.  This led to a two-week student sit-in at the Bungehuis (home of the humanities faculty) that ended in a police action, but students resumed the sit-in at a nearby building shortly thereafter.

The students’ critique is not, interestingly enough, about underfunding (the humanities faculty has done rather well in terms of funding recently, despite a small drop in enrolments), but rather about the secretive and “anti-democratic” nature of the modern university and – echoes for Canada here – universities losing money on property deals.  It’s struck enough of a chord that the university has put forward a ten-point plan to meet the students’ demands.   On the face of it, there are some big steps forward here, though likely not enough to satisfy protesters, who may feel they’re on a roll: copycat protests broke-out last week at the London School of Economics.  My guess is that this peters out in a week or two, but it may be the beginning of some valuable discussions about how universities are managed in Europe.

Finally, one consequence of the economic crisis in Russia is that students are not receiving their government bursaries.  Basically, what appears to have happened is that cash-strapped universities have raided funds received from government to pay for short-term costs (such as making payroll).  This probably isn’t more than a one-week story – eventually bursaries will be sorted out.  But it’s indicative of the kinds of problems Russian higher education – indeed, all Russian institutions – are currently experiencing.

February 23

Demand Sponges

If you’ve ever spent any time looking at the literature on private higher education around the world – from the World Bank, say, or the good folks at SUNY Albany who run the Program for Research on Private Higher Education (PROPHE) shop – you’ll know that private higher education is often referred to as “demand-absorbing”; that is, when the public sector is tapped-out and, for structural reasons (read: government underfunding, unwillingness to charge tuition), can’t expand, private higher education comes to the rescue.

To readers who haven’t read such literature: in most of the world, there is such a thing as “private higher education”.  For the most part, these institutions don’t look like US private colleges in that (with the exception of a few schools in Japan, and maybe Thailand) they tend not to be very prestigious.  But they aren’t all bottom-feeding for-profits, either.  In fact, for-profits are fairly rare.  Yes, there are outfits like Laureate with chains of universities around the world, but most privates have either been setup by academics who didn’t want to work in the state system (usually the case in East-central Europe) or are religious institutions trying to do something for their community (the case in most of Africa).

Anyways, privates as “demand-absorbers” – that’s still the case in Africa and parts of Asia.  But what’s interesting is what’s happening as to private education in countries heading into demographic decline, such as those in East-central Europe.  There, it’s quite a different story.

Let’s start with Poland, which is probably the country in the region that got private education regulation the least wrong.  There was a massive explosion of participation in Poland after the end of socialism, and not all of it could be handled by the private sector, even if they could charge tuition fees (which they sort of did, and sort of didn’t).  The private sector went from almost nothing in the mid-90s to over 650,000 students by 2007.  But since then, private enrolments have been in free-fall.  Overall, enrolments are down by 20%, or close to 400,000 students.  But that drop has been very unequally distributed: in public universities the drop was 10%; in privates, it was 40%.

Tertiary Enrolments by Sector, Poland, 1994-2013














In Romania, the big picture story is the same as in Poland, but as always, once you get into the details it’s a bit more on the crazy side – this is Romania, that’s the way it is.  Most of the rise in private enrolments from 2003 to 2008 was due to a single institution named Spiru Haret (after a great 19th century educational reformer), which eventually came to have 311,000 students, or over a third of the entire country’s enrolment.

Eventually – this is Romania, these things take time – it occurred to people in the quality assurance agency that perhaps Spiru Haret was closer to a degree mill than an actual university; they started cracking down on the institution, and enrolments plummeted.  And all this was happening at the same time as: i) the country was undergoing a huge demographic shift (abortion was illegal under Ceausescu, so in 1990 the birthrate fell by a third, which began to affect university enrolments in 2008); and, ii) the national pass-rate on the baccalaureate (which governs entrance to university) was halved through a combination of a tougher exam and stricter anti-cheating provisions (which I described back here).  Anyways, the upshot of all this is that while public universities have lost a third of their peak enrolments, private universities have lost over 80% of theirs.

Tertiary Enrolments by Sector, Romania, 2003-2013














There’s a lesson here: just as private universities expanded quickly when demand was growing, they can contract quickly as demand shrinks.  The fact of the matter is that with only a few exceptions, they are low-prestige institutions and, given the chance, students will pick high-prestige institutions over low-prestige ones most of the time.  So as overall demand falls, demand at low-prestige institutions falls more quickly.  And when that happens, private institutions get run over.

So maybe it’s time to rethink our view of private institutions as demand-absorbing institutions.  They are actually more like sponges: they do absorb, but they can be wrung out to dry when their absorptive capacities are no longer required.

February 19

Performance-Based Funding (Part 3)

As I noted yesterday, the American debate on PBF has more or less ignored evidence from beyond its shores; and yet, in Europe, there are several places that have very high levels of performance-based funding.  Denmark has had what it calls a “taximeter” system, which pays institutions on the basis of student progression and completion, for over 20 years now, and it currently makes up about 30% of all university income.  Most German Länder have some element of incentive-based funding on either student completion or time-to-completion; in some cases, they are also paid on the basis of the number of international students they attract (international students pay no tuition in Germany).  In the Netherlands, graduation-based funding makes up over 60% of institution operating grants (or, near as I can tell, about 30% of total institutional income).  The Czech Republic now gives out 20% of funding to institutions on a quite bewildering array of indicators, including internationalization, research, and student employment outcomes.

Given this, you’d think there might be a huge and copious literature about whether the introduction of these measures actually “worked” in terms of changing outcomes of the indicators in question.  But you’d be wrong.  There’s actually almost nothing.  That’s not to say these programs haven’t been evaluated.  The Danish taximeter system appears to have been evaluated four times (haven’t actually read these – Danish is fairly difficult), but the issue of dropouts doesn’t actually seem to have been at the core of any of them (for the record, Danish universities have relatively low levels of dropouts compared to other European countries, but it’s not clear if this was always the case or if it was the result of the taximeter policy).  Rather, what gets evaluated is the quite different question of: “are universities operating more efficiently?”

This is key to understanding performance indicators in Europe. In many European countries, public funding makes up as close to 100% of institutional income as makes no odds.  PBF has therefore often been a way of trying to introduce a quasi-market among institutions so as to induce competition and efficiency (and on this score, it usually gets fairly high marks).  In North America, where pressures for efficiency are exerted through a competitive market for students, the need for this is – in theory at least – somewhat less.  This largely explains the difference in the size of performance-based funding allocations; in Europe, these funds are often the only quasi-competitive mechanism in the system, and so (it is felt) they need to be on the scale of what tuition is in North America in order to achieve similar competitive effects.

Intriguingly, performance-based funding in Europe is at least as common with respect to research as it is to student-based indicators (a good country-by-country summary from the OECD is here).  Quite often, a portion of institutional operating funding will be based on the value of competitive research won, a situation made possible by the fact that many countries in Europe separate their institutional grants into funding for teaching and funding for research in a way that would give North American universities the screaming heebie-jeebies.  Basically: imagine if the provinces awarded a portion of their university grants on the same basis that Ottawa hands out the indirect research grants, only with less of the questionable favouritism towards smaller universities.  Again, this is less about “improving overall results” than it is about keeping institutions in a competitive mindset.

So, how to interpret the evidence of the past three days?  Tune in tomorrow.

December 10

The History of the Smorgasbord

One of the things that clouds mutual understanding of higher education systems across the Atlantic is the nature of the Arts curriculum.  And in particular, the degree to which they actually have them in Europe, and don’t over here.

When students enroll in a higher education program in Europe, they have a pretty good idea of the classes they’ll be taking for the next three years.  Electives are rare; when you enter a program, the required classes are in large part already laid out.  Departments simply don’t think very much in terms of individual courses – they think in terms of whole programs, and share the teaching duties required to get students through the necessary sequence of courses.

If you really want to confuse a European-trained prof just starting her/his career in Canada, ask: “what courses do you want to teach?”  This is bewildering to them, as they assume there is a set curriculum, and they’re there to teach part of it.  As often as not, they will answer: “shouldn’t you be telling me what courses to teach”?  But over here, the right to design your own courses, and have absolute sovereignty over what happens within those courses, is the very definition of academic freedom.

And it’s not just professors who have freedom.  Students do too, in that they can choose their courses to an extent absolutely unknown in Europe. Basically, we have a smorgasbord approach to Arts and Sciences (more the former than the latter) – take a bunch of courses that add up to X credits in this area, and we’ll hand you a degree.  This has huge advantages in that it makes programs flexible and infinitely customizable.  It has a disadvantage in that it’s costly and sacrifices an awful lot of – what most people would call – curricular consistency.

So why do we do this?  Because of Harvard.  Go back to the 1870s, when German universities were the envy of the world.  The top American schools were trying to figure out what was so great about them – and one of the things they found really useful was this idea called “academic freedom”.  But at Harvard, they thought they would go one better: they wouldn’t just give it to profs, they’d give it to students, too. This was the birth of the elective system.  And because Harvard did it, it had to be right, so eventually everyone else did it too.

There was a brief attempt at some of the big eastern colleges to try and put a more standard curriculum in place after World War II, so as to train their budding elites for the global leadership roles they were expected to assume.  It was meant to be a kind of Great Books/Western Civ curriculum, but profs basically circumvented these attempts by arguing for what amounted to a system of credit “baskets”.  Where the university wanted a single course on “drama and film in modern communication” (say), profs argued for giving students a choice between four or five courses on roughly that theme.  Thus, the institution could require students to take a drama/film credit, but the profs could continue to teach specialist courses on Norwegian Noir rather than suffer the indignity of having to teach a survey course (not that they made their case this way – “student choice” was the rallying call, natch).

Canadian universities absorbed almost none of this before WWII – until then, our universities were much closer to the European model.  But afterwards, with the need to get our students into American graduate schools, and so many American professors being hired thereafter (where else could we find so many qualified people to teach our burgeoning undergrad population?), Canadian universities gradually fell into line.  By the 1970s, our two systems had coalesced into their present form.

And that, friends, is how Arts faculties got their smorgasbords and, to a large extent, jettisoned a coherent curriculum.

October 17

North American Fachhochschule

When trying to make big-picture comparisons between Europe and North America, one big difference always shows up: the existence in Europe of large, Bachelors’-degree-delivering institutions, which are nevertheless not universities.

These go under various names in various places – ammattikorkeakoulu in Finland (which the government translates as “polytechnics”, but which institutions themselves choose to translate as “universities of applied sciences”), Hogescholen voor Hoger Beroepsonderwijs (or HBOs) in the Netherlands, or Fachhocschule in Germany and Austria.   Because they are all “not-universities”, and because they all describe themselves as being in the business of providing a more “applied” type of education than traditional universities, the easy temptation is to compare them to our own “not-universities” – i.e. community colleges.  But this is simply wrong.

The first way it’s wrong is that these European Non-University Higher Education Providers (or NUHEPs, to steal a phrase from my Australian colleague, Andrew Norton) deliver all of their programming at the Bachelor’s level, or higher.  They do not, for the most part, get involved in trades training via apprenticeships.  And – in some countries at least – they also dominate the “continuing education” market for short-course professional post-baccalaureate training.

But while we don’t have Fachhochschule sectors, per se, it is nonetheless true that North America is gradually developing institutions that look a great deal like Fachhochschule.  The most obvious examples are in the United States, where community colleges are starting to deliver 4-year Bachelor’s degrees. (e.g. Florida).  In Canada, some of our newer universities (e.g. Mount Royal and MacEwan) look somewhat like Fachhochschule, though it’s not a comparison either would likely accept.  More eager to claim that mantle would be the colleges that actively refer to themselves as “polytechnics”, which, like their European counterparts, engage in a fair bit of applied research (this is not unknown at American community colleges, but it’s rarer).

What’s interesting about the way this phenomenon is emerging in North America is that it’s piecemeal in nature.  It’s not happening because governments are saying “hey, we need some more professionally-oriented Bachelor’s level programming – let’s create some new institutional forms to deliver it”.  That was always unlikely to happen over here because our universities are considerably less sniffy than European ones about delivering professionally-oriented programming – after all, most of the new programs universities have added in the last fifty years, such as nursing, business, journalism, etc., have been in professional areas.  Instead, what’s happened is that community colleges have taken advantage of universities’ inherent disciplinary conservatism by trying to pick-off new fields of work that are being professionalized (e.g. construction management) and offer degree programs in these, before the universities can get to them.  And by and large, they’ve been pretty successful at that, though in no case are these institutions’ Bachelor programs anything like the dominant credential they deliver – for the most part, they remain providers of sub-baccalaureate education.

Will we ever reach the point where any of our non-university institutions, like European Fachhochschule, are fully engaged in Bachelor’s level education?  My guess is no.  Once institutions reach a certain level of intensity in terms of Bachelor’s degree provision our governments’ instinct will be to “promote” them to universities, as happened in Alberta and British Columbia over the last ten years.  And indeed, that may still happen in Europe – even the Finnish Polytechnics are agitating for legal recognition as universities.

The prestige pull of the word “university” is mighty hard to resist.

September 19

Better Know a Higher Ed System: France

France is one of the original homelands of the university: the University of Paris was the first real university outside the Mediterranean basin, and was home to six universities by 1500 – only Italy and Spain had more at the time.  But while it has quite ancient roots, it is also, in many respects, one of the youngest systems of higher education in Europe, because the entire university system was wiped out during the Revolution, and then developed again from scratch during Napoleonic period that followed.

Unlike virtually every other system on earth, the French do not put universities at the top of the higher education hierarchy.  Instead, there are what are called “les Grandes Écoles”: peak, specialized institutions that only operate in a certain limited number of fields – École des Mines and Polytechnique for Engineering, l‘École Normale Superieur for Education, and l‘École Nationale d’Administration Publique” to train the masters of the universe.  Most of these go back two centuries – Polytechnique was an excellent spot for Napoleon to train his gunners – but ENAP actually only dates from the 1940s.

One step down in the hierarchy are the big “Instituts”, which serve as the training ground for professions, mainly in technology (IUT), but also in fields like nursing.  Universities, for the most part (medical studies excepted), are widely viewed as the dregs of the system, the catch-all for people not smart enough to make the grandes écoles, or driven enough to do professional studies.  That’s partly because they are bereft of many prestige disciplines, but it’s also because, historically, they are not centres of research.  As with many other European countries (notably Germany and Spain), the public research mission was largely the responsibility of the Centre National de Recherche Scientifique (CNRS), which was not attached to the universities.

Another historical feature of French universities is the degree to which they have been under state control.  Legally, all faculties were part of a single “Universite de France” for most of the 19th century.  Universities as we know them – autonomous institutions that pursue their own plans and goals – are fairly recent.  If you’re being generous, they date back to 1968; in fact they didn’t reach North American levels of autonomy until the loi Pecresse in 2007 – in practice, though, the shift happened in late 1980s.  Prior to that, hiring and promotion was essentially all done through the Ministry; curricula were also laid down on national lines by expert committees run from Paris.

Recently, international rankings have been a major spur to change.  When the Academic Ranking of World Universities first appeared in 2003, it created the “choc de Shanghai” – the country was genuinely shocked at how weak its institutions were seen to be.  Much of it was down to system design, of course.  The Grandes Ecoles couldn’t compete with American multiversities because they were small, single-discipline institutions, and the universities couldn’t compete because the research was all tied up at CNRS.  But the French government, instead of standing up and saying “this ranking is irrelevant because our structures are different, and frankly our system of research and innovation works pretty well anyway”, decided to engage in a wild bout of policy-making: excellence initiatives, institutional mergers, etc.  It’s all designed implicitly to make their system look more American; though to keep up pretences, if anyone asks it’s actually about being “world-class”.

Maybe the most interesting development to watch is what’s going on at Paris Saclay – a campus that brings together roughly two dozen universities and scientific institutions in a single spot.  It’s both a federation of universities and a new independent institution.  The governance arrangements look like a nightmare, but the potential is certainly there for it to become a genuinely European super-university.  It’s not the only new university in the world whose founders dream of hitting the Shanghai Top Ten, but it’s probably the one with the best chance of doing so.

June 30

The Effects of Tuition Fees (Part 2)

As I mentioned last week, a major paper I’ve been working on for over a year with colleagues from DZHW on the subject of the effects of fees was published last Monday by the EC (available here).  In my last post, I talked about how fees affected institutions – today, I want to talk about how they affect students.

In our report, we looked at case studies over 15 years (1995-2010) from nine countries – Austria, Canada, England, Finland, Germany, Hungary, Poland, Portugal, and South Korea.  These countries represent very different experiences.  Some have private higher education, others don’t.  Some have public sectors that change fees, while others don’t (Hungary and Poland are in the middle, where public universities provide education free for some while charging for others).  And looking across all the different cases, we found = the following:

1)      Most tuition increases have no perceptible effect on enrolment.  The only cases where clear-cut effects could be discerned was in England in 2012, where the increase was about $10,000 in a single year, and in the de-regulation of professional fees in Ontario in the mid-90s (where, bizarrely, low-income students were not affected, but middle-income students were).

2)      That said, there are also some clear-cut cases where tuition has been a driver of increased access.  In both Poland and South Korea, major increases in enrolments were driven by the existence of fee-supported places (mainly but not exclusively in private institutions).

3)      Though this is partly a matter of many countries having education data-sets that make Canada’s look enviable, there is very little evidence that changes in fees have done much to change the composition of the student body.  In every country where there is data, underrepresented groups have done better over time, regardless of the fee regime.  Even in the extreme case of England 2012, under-represented groups (the poorest income quintile, black and Asian students) tended to be less affected by the tuition increase than richer, whiter students. (The one exception here is older students, who were disproportionately affected by the changes.)  To the extent that late-entrants to higher education come from poorer backgrounds, this should be seen as a kind of hidden socio-economic effect of fees.

4)      Changes in tuition fees seem to have had no discernible effects on students’ choice of major, and few discernible effects on students’ decisions about where to study (in Canada, for instance, rates of out-of-province study are actually up over the last decade).

5)      It is not so much that fees themselves have no effect; rather, it is that in nearly all cases, fees are introduced with accompanying increases in student aid.  Sometimes it is paltry compared to the size of the fees required (e.g. South Korea in the 90s), sometimes it is implemented in a fairly clunky way (Germany, mid-2000s).  But it is always there to offset the worst effects of fees.  And in the case of England 2012, it was there to ensure that students weren’t required to pay a single extra penny of costs up-front, which seems to have had a major factor in limiting the impact of the world’s largest-ever tuition increase (in the short-term at least).

The lesson here?  Unless you’re planning on going England-style crazy, international evidence fee increases are unlikely to affect access in a measurable way.

June 23

The Effects of Tuition Fees (Part 1)

For the last eighteen months or so, I’ve been working on a project with colleagues Dominic Orr and Johannes Wespel of the Deutsche Zentrum für Hochschul- und Wissenschaftsforschung (DZHW) for the European Commission, looking at the effects of changes in tuition fees and fee policies on institutions and students.  The Commission published the results on Friday, and I want to tell you a little bit about them – this week I’ll be telling you about the effects on institutions, and next week I’ll summarize the results with respect to students.

The first question we answered had to do with whether or not a rise in tuition ultimately benefits higher education institutions.  Critics of fees sometimes suggest that extra fees do not in fact result in institutions receiving more money, because governments simply pull a fast one on the public and withdraw public money from the system, thus leaving institutions no better off.  Our examination of nine case studies revealed there were certainly some occasions where this was the case – Canada in the mid-90s, Austria in 2001, and the UK in 2012 – but that in the majority of cases fee increases were accompanied by stable or increased government funding.  Moreover, in all the cases where there was an accompanying decrease in public funding, it was signalled well in advance by governments, and indeed the increase in fees was deliberately designed to be a replacement for public funds. We did not find a case where a government “pulled a fast one”.

The second question we asked was how universities reacted to the introduction of fees: did they suddenly start chasing money and becoming much more sensitive to the demands of students and donors?  The answer, by and large, was no, for three reasons.  First, tuition isn’t the only financial incentive on offer to institutions; particularly if they are already funded on a per-student basis, the introduction or increase of fees isn’t likely to change behaviour.  Second, institutions won’t go after fees in ways that they think will negatively affect their prestige.  In Germany for instance, many universities have considerable latitude to raise income via teaching through continuing-education-like programs, but effectively they don’t do this, because they believe that engaging in that sort of activity isn’t prestige-enhancing.  And third, institutions often delay altering their behaviour too much because they don’t believe government policy will “stick”.  In Germany, specifically, the feeling was that the introduction of fees was unlikely to last and so there was no point in getting too invested in attracting new students to take advantage of it.

In fact, although fees in public institutions are often touted as a way to make universities more flexible and more responsive to business, the labour force, etc., this never actually works in reality, because universities are saddled with enormous legacy costs (you can close a program, but you still have to pay the profs), and have a particular self-image that means  they closely-tied to traditional ways.  What does seem to work – at least to some degree – is to allow the emergence of new types of higher education institutions altogether.  In Poland, it was only the emergence of private universities that allowed the system to take on the explosion of demand in the 1990s.  In Finland, an entirely new type of higher education institution (ammattikorkeakoulu or “Polytechnics”) was developed to take care of applied education, and accounted for 80% of all enrolment growth since 1995.

Next week: the effects on students.  See you then.

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