Next week I make my annual migration from Oxford to Stanford. These are two of the world's greatest universities, but Oxford faces a challenge that Stanford does not. How it meets that challenge – how it is allowed by government to meet it – will be a token not just of Britain's but of Europe's seriousness of purpose in the 21st century. If even Oxford cannot stay up in the superleague with Stanford over the next decade, then all this talk of Europe's "knowledge-based economy" will be exposed as nothing more than another bubble of Euro-waffle.
Oxford's challenge is a specifically British but also a characteristically European one. In a nutshell, it is that public funding is about to be savagely cut, but at the same time the government effectively prevents the university from raising the fee income that would help to fill the gap. Oxford's standard fee for British and EU undergraduates is set at less than £3,300 per year. For comparison, Stanford's standard undergraduate tuition fee for the 2010/11 academic year is $38,700 (£25,600).
Oxford estimates that the average cost of educating one of its undergraduates is about £16,000 a year. Just over £3,000 of that comes from the tuition fees, for which the government currently provides British students with a subsidised loan; and about £5,000 comes from direct public funding, channelled through the Higher Education Funding Council. That leaves roughly half the £16,000 to be found by the university itself, from endowments, donations and other sources of income. This is already a great strain on the university's resources. As the direct government funding is cut, the strain will become acute.
In its latest submission to a review of higher education funding headed by Lord Browne, which is due to report to the government this autumn, Oxford is quite frank about the danger it faces. "Reputations," it says, "are hard won but very easily lost."
The heart of Oxford's problem can be described in several ways. You could say simply "money". You could also say "freedom". For there's no doubt that, if it were freed from all government constraints and believed only in the Darwinian glories of the free market, Oxford could push its fees up through the roof – and still attract outstanding students from around the world. But the community of scholars that is the University of Oxford, like the wider society in which it is embedded, does not believe in a pure, libertarian "whatever the market will bear". So Oxford's challenge is how to combine freedom with other European values, such as equality of opportunity, fairness, social justice and solidarity (not least with other parts of the higher education system), in a mix that produces enough money to sustain this as a world-class research and teaching university.
The wider issue is not just fees but the whole way Britain funds higher education. The United States spends 2.9% of its GDP on higher education. Britain spends just 1.3%, a little below the OECD average of 1.4%. In the US, some 66% of relevant income is from private sources; in the UK, just 35%. I understand that the Browne committee's review is looking at this broad set of strategic issues, and so it must.
The level of public funding for higher and further education must be part of the larger public spending debate. Is it better to spend £20bn on Trident or on universities? Why should the NHS be ringfenced, so that other areas must be cut even harder? These are choices we have to make as a nation. But the public policy framework for private funding and fee income is equally important.
Despite the financial crisis, Oxford's fundraising campaign is already approaching the £1bn mark, and will not stop there. It is helped by the university's decentralised, organic, Burkean nature – Oxford has been teetering on the verge of anarchy for 900 years – with 38 independent self-governing colleges, and numerous other academic principates, baronies and cantons, each with its own little platoon of emotional loyalists. Stand at the bus stop and you notice a Centre for Hindu Studies. Park your bike and you find yourself outside a Henry Wellcome Ancient Biomolecules Centre.
Yet the question of fee income cannot be dodged. In a globalised academic market the disparity with Stanford is just too acute. In Britain, certain principles are generally agreed. Student admission should be based solely on merit: needs-blind, as at the best American universities; but also, unlike in the US, daddy-blind. The shameful business of affirmative action for the children of alumni and donors – the business that got George W Bush into Yale – would be quite unacceptable here. The process should also encourage, not deter, applicants from less privileged backgrounds.
Now the prospect of debt surely can deter. Oxford seems currently to favour a "deferred fees" option. Students would pay nothing up front but subsequently repay the fees, taken as a small percentage of their income if and when they started earning more than, say, £15,000 a year. A graduate tax, in other words, but with the proceeds going directly to the university that carried the initial cost. Some fees might be forgiven, perhaps for those who go into socially valuable but poorly paid professions.
I think Oxford should be more ambitious than this, and take a leaf out of Stanford's book. A gifted American teenager from a poor family knows that, if she works hard at high school, secures admission to Stanford on merit, and takes some part-time employment during her studies, she can emerge at the end of her degree course with no burden of debt.
Stanford's dean of admissions and financial aid, Richard Shaw, told me what this involves. Nearly one in 10 of their students, whose assessed family income is less than $60,000 a year, get full tuition fees, board and lodging covered by the university. Many more, whose family income is between $60,000 and $100,000, get full fees paid. To sustain this, the university puts in some $70m of income from its endowment. So what we like to think of as a very European value is achieved by very American means.
I think this is what Oxford should aim for, if not at quite those princely levels of largesse. Over a decade, with our generous donors, we could achieve it. We should be free to charge more than others, but also ready to help more. Obviously there are only a few universities in Britain – as there are in the US – who could aspire to this. The guiding principles of any national reform must therefore include autonomy, but also diversity and fairness. I care passionately that my own university should remain among the best in the world. I also recognise that this must be done in a way that does not harm other universities.
The goal of a "knowledge-based economy" will not be achieved, anywhere in Europe without more spending on higher education. In the case of somewhere like Oxford, the framework for fees and fundraising is at least as important as the direct government funding. This is not so much a case of "give us the tools, and we'll finish the job". It is "give us the right rules, and we'll finish the job".
Timothy Garton Ash is professor of European studies at Oxford University
Oxford's challenge is a specifically British but also a characteristically European one. In a nutshell, it is that public funding is about to be savagely cut, but at the same time the government effectively prevents the university from raising the fee income that would help to fill the gap. Oxford's standard fee for British and EU undergraduates is set at less than £3,300 per year. For comparison, Stanford's standard undergraduate tuition fee for the 2010/11 academic year is $38,700 (£25,600).
Oxford estimates that the average cost of educating one of its undergraduates is about £16,000 a year. Just over £3,000 of that comes from the tuition fees, for which the government currently provides British students with a subsidised loan; and about £5,000 comes from direct public funding, channelled through the Higher Education Funding Council. That leaves roughly half the £16,000 to be found by the university itself, from endowments, donations and other sources of income. This is already a great strain on the university's resources. As the direct government funding is cut, the strain will become acute.
In its latest submission to a review of higher education funding headed by Lord Browne, which is due to report to the government this autumn, Oxford is quite frank about the danger it faces. "Reputations," it says, "are hard won but very easily lost."
The heart of Oxford's problem can be described in several ways. You could say simply "money". You could also say "freedom". For there's no doubt that, if it were freed from all government constraints and believed only in the Darwinian glories of the free market, Oxford could push its fees up through the roof – and still attract outstanding students from around the world. But the community of scholars that is the University of Oxford, like the wider society in which it is embedded, does not believe in a pure, libertarian "whatever the market will bear". So Oxford's challenge is how to combine freedom with other European values, such as equality of opportunity, fairness, social justice and solidarity (not least with other parts of the higher education system), in a mix that produces enough money to sustain this as a world-class research and teaching university.
The wider issue is not just fees but the whole way Britain funds higher education. The United States spends 2.9% of its GDP on higher education. Britain spends just 1.3%, a little below the OECD average of 1.4%. In the US, some 66% of relevant income is from private sources; in the UK, just 35%. I understand that the Browne committee's review is looking at this broad set of strategic issues, and so it must.
The level of public funding for higher and further education must be part of the larger public spending debate. Is it better to spend £20bn on Trident or on universities? Why should the NHS be ringfenced, so that other areas must be cut even harder? These are choices we have to make as a nation. But the public policy framework for private funding and fee income is equally important.
Despite the financial crisis, Oxford's fundraising campaign is already approaching the £1bn mark, and will not stop there. It is helped by the university's decentralised, organic, Burkean nature – Oxford has been teetering on the verge of anarchy for 900 years – with 38 independent self-governing colleges, and numerous other academic principates, baronies and cantons, each with its own little platoon of emotional loyalists. Stand at the bus stop and you notice a Centre for Hindu Studies. Park your bike and you find yourself outside a Henry Wellcome Ancient Biomolecules Centre.
Yet the question of fee income cannot be dodged. In a globalised academic market the disparity with Stanford is just too acute. In Britain, certain principles are generally agreed. Student admission should be based solely on merit: needs-blind, as at the best American universities; but also, unlike in the US, daddy-blind. The shameful business of affirmative action for the children of alumni and donors – the business that got George W Bush into Yale – would be quite unacceptable here. The process should also encourage, not deter, applicants from less privileged backgrounds.
Now the prospect of debt surely can deter. Oxford seems currently to favour a "deferred fees" option. Students would pay nothing up front but subsequently repay the fees, taken as a small percentage of their income if and when they started earning more than, say, £15,000 a year. A graduate tax, in other words, but with the proceeds going directly to the university that carried the initial cost. Some fees might be forgiven, perhaps for those who go into socially valuable but poorly paid professions.
I think Oxford should be more ambitious than this, and take a leaf out of Stanford's book. A gifted American teenager from a poor family knows that, if she works hard at high school, secures admission to Stanford on merit, and takes some part-time employment during her studies, she can emerge at the end of her degree course with no burden of debt.
Stanford's dean of admissions and financial aid, Richard Shaw, told me what this involves. Nearly one in 10 of their students, whose assessed family income is less than $60,000 a year, get full tuition fees, board and lodging covered by the university. Many more, whose family income is between $60,000 and $100,000, get full fees paid. To sustain this, the university puts in some $70m of income from its endowment. So what we like to think of as a very European value is achieved by very American means.
I think this is what Oxford should aim for, if not at quite those princely levels of largesse. Over a decade, with our generous donors, we could achieve it. We should be free to charge more than others, but also ready to help more. Obviously there are only a few universities in Britain – as there are in the US – who could aspire to this. The guiding principles of any national reform must therefore include autonomy, but also diversity and fairness. I care passionately that my own university should remain among the best in the world. I also recognise that this must be done in a way that does not harm other universities.
The goal of a "knowledge-based economy" will not be achieved, anywhere in Europe without more spending on higher education. In the case of somewhere like Oxford, the framework for fees and fundraising is at least as important as the direct government funding. This is not so much a case of "give us the tools, and we'll finish the job". It is "give us the right rules, and we'll finish the job".
Timothy Garton Ash is professor of European studies at Oxford University
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