The Rise of For-Profit Higher Education

August 8th, 2013 by Dexter Findley

As Britain's second for-profit institution is granted the title of University we discuss the implications for-profit higher-ed will have on the landscape of UK education and society.

In Britain we have an ingrained, congenital suspicion of the Profit Motive. Thus, predictably, when the private BPP College of Professional Studies ascended to BPP University with the government's blessing, the UCU (University and College Union) decried the move. It will Open The Floodgates, they said. It will Endanger Our Reputation, they added. We will Become Like America.

But how valid are their concerns? Do they have basis, beyond our cultural phobia for the Free Market? First off, let's look at the state of play as it stands. The UK has over 200 Universities and other HE establishments, the overwhelmingly vast majority of which are nonprofit foundations, usually part-funded by the government, all of which have the autonomy to set and award their own degrees. In the 'good old days', they required no tuition fees: receiving a top-quality education was simply a matter of making the grade. Then Labour introduced the £1000 'top-up' fees. This quickly trebled to something in the region of £3000. Then, as you know, they recently trebled again to £9000 (so much for just being a 'top up') - an act which will leave all graduates with a considerable millstone of student debt to carry. Admittedly, this 'debt' isn't the scary type of debt - the debt of creditors, banks and bailiffs - but more of a 'graduate tax' that is chipped off your monthly pay, along with Income Tax and the like. Well, at least at the moment it is. Policy could change, and however lenient the current government may be, the fact doesn't stand for future regimes.

Where do private institutions fit in to this equation? Historically, there have been a few companies that have set up low-key colleges or institutes (categorically not universities; well, until recently), which have offered courses in various limited subjects (usually business related) and have often been affiliated with international entities (the city of Oxford sports an outpost for a Saudi university, for example). They have tended to cater to niche markets, and are no way near destabilizing or replacing the conventional HE pathway.

But now, private universities (a serious step-up from colleges) are clearly here to stay. Being private, they will rely heavily on tuition fees to keep afloat. Their student intake will be their life-blood, even more so than conventional universities. So the question must be asked: what would make someone choose a private institution, as opposed to taking the well-trodden path of going to uni? Surely the Benign Debt of uni is preferable to the Scary Debt of private companies? Unless, of course, the fees for such institutions were within a manageable price bracket... as currently, they are. The BPP University will charge £5000 per year for a three-year degree, a far more manageable sum than £9000, even if it's meted via Benign Debt. You see, £5000 is a sum that in conceivably in the price range for many people to pay outright (start saving now, parents), negating the debt aspect entirely.

Now, if private universities decide to go the way of the States with, quite frankly, ludicrous tuition fees, then what gives? Pupils can still go to conventional unis (which, at present, are far more prestigious anyway), leaving the rich and foolish to pursue their pipe-dreams. The idea that just by having universities that charge incredible fees, the UK HE scene will somehow 'Americanize' is silly: our Ivy League lies firmly in the Conventional area of things, and it's very unlikely that Oxbridge or the Russell Group will go private any time soon (forays into the Gulf excepted). least for the moment. However, if a significant number of private universities spring up, gain popularity and then raise their fees (and demonstrate that people are willing to pay those fees), there is the danger that Conventional unis could follow suit (via government reform, of course), just because they can get away with it. Then we'd see the fees arms-race of the States, and we would be in a pickle. At the moment, however, this outcome is thankfully in the realm of speculative fiction.

So what benefits may private universities (alongside conventional ones) have for UK students? Straight off the bat, they seem to be providing a cheaper alternative. An indirect benefit of this lower-priced private competition may include forcing the Gov to re-think its tuition fee policies in a downwards direction (the very essence of capitalist competition), encouraging them to spend more tax dollar on subsidizing education (is there ever a better use of public money?). The lower cost of private university, driven down by competition, could also make university education even more accessible, giving more people the chance to pursue professional careers and a better quality of life.

Niche universities could arise, giving students' more choice of where and what to study. There will be, in real terms, more universities, meaning even greater choice (and geographical accessibility). Universities focused on later life learning may develop, unseating the still-extant stigma of being a 'mature' student.

There are also a caveat which is, in a way, a flipside of previous points. While it is entirely possible the introduction of private universities will create greater choice for students, there is a danger that, responding to market forces, they will homogenize their courses into a morass of Business Studies variants, leaving liberal arts (and indeed hard sciences) floundering by the wayside. While the argument for the usefulness of liberal arts is for another blog piece (hint: it is very necessary), we should reject anything that would limit educational prospects on principle.

This feeds directly into a fundamental question surrounding HE in general, not only private unis. To what extent should HE reflect and respond to current socioeconomic pressures? In short, should HE exist for education's sake, or to act as a personnel farm for Britain's commercial sectors? One could well argue that the very act of creating private universities is a manifestation of the latter. Is that necessarily a bad thing? Equally, since taxpayer money subsidizes conventional universities, surely there is an argument for making their courses industry-led and -centered as well? In a way, this question may be becoming redundant, as many universities are already electing to drop (or cut funding to) subjects with little economic impact.

These are incredibly difficult issues to which there are no clear-cut answers. In the end it comes down to ideals: the ideal of a utopian anything-goes HE system, existing for its own sake, or a pragmatic, numbers-led HE system that feeds directly into the country's larger economy, and is informed by it. We certainly seem to be transitioning from the former to the latter, which many people would argue is a regression. They would say the utopian version of HE breeds innovation and new ideas (amusingly, anyone who's experienced the tangled world of academia would probably disagree), while the proponents of pragmatism would cite its increased economic efficiency and benefit as de facto justification. A minefield indeed.

The point to take home from this is that private universities aren't a boogeyman, and current universities aren't the bastion of academic purity they claim to be. They are exist within the same system and are swayed by similar forces. However, private unis will rise and fall on their own merits, unlike conventional ones, so it's unlikely that the status quo will be destabilized just yet. Instead of scaremongering, the UCU and the press in general should take a nuanced view of the issue, especially as - if nothing else - it could be the wake-up call conventional HE needs to get its fee-structuring act together.

Categories: University, Oxbridge