Archive

Archive for June, 2010

Fairness and efficiency in university admission (via Ninth Level Ireland)

Fairness and efficiency in university admission "My recent paper on the non-effect of fee abolition in Ireland emphasized the socio-economic gradient in secondary school attainment: low SES means low points and therefore a low probability of progressing to university. Fees are a side-issue, at best. This problem is not unique to Ireland, of course …" (more) [Kevin Denny, Geary Behavioural Economics Blog, 17 June] … Read More

via Ninth Level Ireland

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The 7 Habits of Highly Ineffective People (via Dan Ariely)

The thing about habits is that for good and bad they require no thinking. An established habit, whether getting ready for work in the morning or having a whiskey after, is a pattern of behavior we’ve adopted—we stick to it regardless of whether it made sense when we initially adopted it, and whether it makes sense to continue with it years later.  From a human irrationality perspective this means that something we do “just once” can wind up becom … Read More

via Dan Ariely

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Science economics: What science is really worth (via Ninth Level Ireland)

Science economics: What science is really worth "President Barack Obama says it. Francis Collins, director of the US National Institutes of Health (NIH), says it. University and research leaders elsewhere are saying it, too. The number one current rationale for extra research investment is that it will generate badly needed economic growth …" (more) [Colin Macilwain, Nature, 9 June] … Read More

via Ninth Level Ireland

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Ireland’s National Portal for Open Access to Research Goes Live (via Ninth Level Ireland)

Ireland's National Portal for Open Access to Research Goes Live “Ireland’s new national portal for Open Access to Irish published research goes live today. RIAN – http://www.rian.ie – will act as a single point of access to national research output, and contains content harvested from the institutional repositories of the seven Irish Universities and Dublin Institute of Technology …” (more) [Education Ireland, 8 June] … Read More

via Ninth Level Ireland

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Deferred fees for universities – Neil Shephard

From Vox (is this a model for funding third-level in Ireland?):

The UK needs to address its budget deficit. This column, introducing a new CEPR Policy Insight, argues against cuts in government contributions to the tuition chargeable by universities, warning that they would make the UK poorer, economically and culturally. It suggests instead additional deferred fees that graduates can pay later in their career when their income allows it.

Shephard, Neil (2009), “Income contingent tuition fees for universities”, CEPR Policy Insight 42.
This article may be reproduced with appropriate attribution. See Copyright (below).

The UK Government has a large structural budget deficit. Whichever party wins the next general election, it is clear that it will either cut the real value of government spending or at least have very modest real growth rates. Higher education will be a tempting target for slicing “efficiency gains”. Indeed, the Higher Education Funding Council of England announced a cut of roughly 1% on 13 May 2009. From July 2009, it has been consulting on a further 1.2% reduction that they may introduce in 2010-2011.

Given the state of the public finances, the government may eventually have to reduce its various contributions to the tuition chargeable by universities some 10% to 20% (in real terms). In the long run, that would threaten the quality of English undergraduate education, which could in turn inflict lasting damage on one of the UK’s most successful sectors – a sector that also generates a large volume of exports.1 It would likely make the UK poorer, economically and culturally.

Some university leaders have suggested that student tuition fees, funded through “income-contingent loans” supplied by the government, should rise to make up for any shortfalls in underfunded teaching costs.2 Rather surprisingly, under the current funding model, an increase in the level of tuition fees in fact increases public sector debt. I will explain why and what might be done about this to mitigate the rise in national debt. The most important mitigation is to remove the interest rate subsidy graduates receive on their tuition loans. Barr (2004) has demonstrated that this subsidy is very expensive and an inefficient way of providing financial support to higher education students. I entirely agree with him that it should be removed.

In CEPR Policy Insight 42, I argue that the UK Government should go further. I think the Government should allow universities to charge their graduating students additional fees if their teaching costs are not met by the current total tuition payment. I will call these “deferred fees” or income-contingent tuition fees. Deferred fees are additional teaching fees due to the university. They can be paid to the student’s university either

  • upfront by the parents of the student (or the students themselves), or
  • by the graduate once his/her income rises above a defined threshold and once their national maintenance and tuition loans are repaid.

If the graduate’s income is not sufficient to make the repayments during their career, the fee is forgiven. Note that the university would not be given extra upfront cash by the state or the Student Loan Company. This means that such fees are neutral on the fiscal position of the state, the size of the Student Loan Company’s loan book, and the financial position of the universities that do not introduce such fees. The implications of variable deferred fees for fee caps, charitable giving, means testing, and student debt are discussed in the Policy Insight.

Footnotes

1 Throughout I will discuss solely English universities. However, the same type of structure is broadly in place in Wales and Northern Ireland and also applies to English students who study at Scottish universities.

2 For example, in March 2009 Sir Roy Anderson, Rector of Imperial College, advocated the tuition fee cap should rise by between £3,000 and £6,000.

References

Barr, Nicholas (2004), “Higher education funding,” Oxford Review of Economic Policy, 20, 264-283.

A slightly daft but nifty piece of data visualisation: Every country must be number one at something…

Funding the university sector – The Irish Times – Thu, Jun 03, 2010

Funding the university sector – The Irish Times – Thu, Jun 03, 2010.

Hard to improve on this Irish Times Editorial – it says it all. The sector is in crisis, and meanwhile is expected to be engine of the smart economy and to drive innovation and smart job creation. Guess what? It’s not going to happen with the current mind-boggling disinvestment in the sector. Maintaining standards as they are is going to be a challenge, let alone raising our game to the next level. And the effects of these cutbacks will be seen in the coming years as lower and slower economic growth.

How will the universities will deliver the Innovation Agenda, when staff numbers and resourcing are dramatically and arbitrarily cut? Want to know why there is no Irish Google? It’s because there is no Irish Stanford! Universities which function as beacons to attract the brightest and the best from all over the world are required here if we wish to transform the Irish economy for ever. We are fooling ourselves if we think the current approach of investing less to achieve more is going to succeed.

Money quotes:

THE EXTENT of the financial and operational crisis facing the university sector has been outlined in a stark letter sent to the seven presidents by Higher Education Authority (HEA) chief executive Tom Boland. He tells the colleges to brace themselves for an unprecedented range of cuts over the next year as the Government seeks to achieve €3 billion in overall exchequer savings.  Colleges are advised to take “whatever action is needed’’ in advance of reductions in core funding.

Cutbacks in staff numbers and in the range of programmes on offer appear inevitable. The colleges have been told also they can expect no increase in student charges for the next academic year.

And:

For its part, the Government appears to be in denial about the true extent of the crisis. It has identified the universities as a key player in economic revival. There is giddy talk about initiatives which will see thousands of foreign students clamouring for places in our universities; all this when many lecture halls are overcrowded and laboratory facilities are often meagre.

See also this post on science funding and the lack of an Irish Nokia.