Education Directions on free tertiary fees

An interesting analysis of Labour’s “free” tertiary fees policy by Education Directions Dave Guerin – a leading education policy strategist:

• The policy is quite thin beyond the headline figures. Costings and assumptions have not been provided, so it is hard to test the figures.
• Making something free normally leads to rationing, and “homeopathy for pets” has been suggested as an area to be curtailed. However, Andrew Little has said that Labour expects a 15% increase in participation (that’s not in the papers released by Labour), so there will be overall growth.
• If a TEO has fewer sources of income, it becomes more dependent upon the remaining ones. By reducing student fee income, this policy would increase the importance of government funding for TEOs. Such government funding is often constrained due to wider budgetary reasons. Any participation growth would probably be offset by lower income/students, and slower income growth.
• Apprentices may get less benefit out of this than others, because their fees are generally lower and employers often pay a share of them. Officials will also be cautious about replacing employers’ funds with government funds.
• The entitlement is defined as years of education rather than EFTS – that would disadvantage part-time learners, and we suspect it might change to an EFTS allowance in time (but Labour is talking to the general public, so would have avoided jargon at this stage).
• The policy is not targeted, so it will pay the fees of people who are willing to pay fees right now (ie every current fee-paying student). While Labour says that it cares about increasing participation, their policy has the main effect of transferring funds to people who would be students anyway. If you wanted to boost participation amongst people deterred by current fees, you would use more targeted scholarships along with bridging programmes.
• The policy is affordable, if it is prioritised over other things. Since most students pay their fees with student loans, and around 40% of the value of student loans are written off due to interest-free loans and other factors, Labour only really needs to find about 60% of the costs of fees for its policy (plus their 15% projected growth in student numbers). Labour will have to make a convincing case about its overall budgetary plans closer to the next election.
• Labour’s stated reasons for the policy (access, retraining, and high debt) aren’t very robust, but the core reason seems to be that senior Labour politicians believe that this is the right thing to do, and that it will earn votes.

So my summary of the above is:

• Policy does not provide details to back the costing
• It is likely to lead to course restrictions in some areas
• Tertiary institutes likely to end up with less funding per student
• The policy is not targeted and will mainly pay the fees of people already willing and able to pay them
• The rationale for the policy overall is not very robust – more to do with votes than solving a problem