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Set our universities free

By Ralf Dahrendorf

Saturday, Dec 28, 2002, Page 9

After pensions and healthcare, higher education is the third great public service in serious trouble in many countries, notably in Europe. Proud Germany, the inventor of the modern university system as most of the world currently knows it, now sees its students ranked at the bottom in tests of knowledge and competence. The nature of the trouble in higher education is similar to that affecting all the public services -- a massive growth in demand that can no longer be met from the public purse.

This means, above all, that the much-vaunted middle classes are being asked -- or soon will be asked -- to contribute more toward the costs of these services, either by higher taxes or through privatization of the financial burdens. Additional private pensions in Germany, rising charges for healthcare everywhere, and "top-up fees" for university students in the UK have become hot political issues bedeviling governments almost everywhere. For the most part, the quick fixes they have imposed so far have not been very successful.

In the case of higher education, there is of course an alternative. In the absence of sufficient funds, one can simply let the universities deteriorate. On the European continent this has been happening since the 1970s. Overcrowded classes in often inadequate physical surroundings without necessary equipment have led to ever longer periods of study, a deterioration in the quality of degrees and much unhappiness among both students and professors. In the UK, where this did not happen in the 1970s and 1980s, every university place could have been filled with a continental European trying to escape declining institutions at home.

Now, however, the miseries of expanding the number of university students without adequate public finance have invaded Britain as well. Even Britain's Secretary of State for Education admits that higher education would need 18 billion additional euros in the budget merely to return standards of education to where they were 10 years ago in terms of staff-student ratios and the condition of buildings and equipment. Within a decade the funds available per student have declined by 40 percent. Where can the needed funds come from?

Not much, it is clear, can be gained from increased taxation. While some still believe that the taxpaying public might be persuaded to spend an additional "penny in the pound" (i.e., 1 percent of tax) of income tax to keep higher education going, most know that this path can be ruled out for general economic as well as political reasons. Thus, alternatives will have to be found despite the fact that they all hit groups whose votes governments need for electoral survival.

One alternative is to let universities shrink again to a manageable size. To some extent this has happened in Europe. In Britain, however, the opposite is taking place. The government has set a target according to which 50 percent of each generation should enter higher education by 2010. However absurd this target may be, mass higher education is here to stay. This is why the subject is no longer one for a small privileged elite, but rather one for general political debate.

A second alternative is to charge the beneficiaries of higher education for what they get. This can be done in several ways -- by means tests that impose duties on many parents, by loans to be repaid under favorable conditions, by a special tax on graduates or by mixtures of such approaches involving a generous system of bursaries as well as charges on well-to-do parents.

All these methods have their problems. They require massive transitional expenditure as they are introduced. They may deter some of those who are qualified from seeking higher education. They impose burdens on politically sensitive groups. They may not be sufficient to save universities from bankruptcy. But what is the alternative? Continental European students who used to come to Britain now join their British colleagues in casting their eyes across the Atlantic. More than ever, the US system is regarded as a model. In a mysterious way it seems to combine equal access with excellence.

The mystery is of course easily resolved -- its name is differentiation. The US university system is not a "two-tier" or "two-class" system but one of almost infinite variety. This is true for its financial parameters too. Public and private contributions are combined in many ways. To be sure, there is the additional feature that many higher education institutions have an endowment, which they can use to balance inequities. It will take some time to build up such endowments in Europe and elsewhere. Even so, the principle is surely right -- universities must be set free. They must be free to admit students of their choice and to charge them what is needed. The role of the state, here as elsewhere, is one of correcting inequities rather than running the whole show.

Such thoughts may seem heretical now, but without heresy there will be no reform. For the problem of the next generation remains to combine public and private contributions to services that simply cannot remain wholly financed by taxpayers and wholly run by public bureaucracies.

Ralf Dahrendorf, the author of numerous acclaimed books, is a member of the British House of Lords, a former rector of the London School of Economics and also a former warden of St. Anthony's College, Oxford.

Copyright: Project Syndicate/Institute for Human Sciences.
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