Peter Andras and Bruce Charlton. The student purse can save us from the mediocre.
Times Higher Education Supplement. 03.01.03.

Data from US universities appear to show that higher tuition fees translate into better teaching provision, say Peter Andras and Bruce Charlton.

The news is full of discussion concerning the cost and quality of undergraduate education. But since tuition fees are centrally fixed it is unclear how much people are prepared to pay for quality. More importantly, it is not clear whether higher tuition fees would translate into better teaching provision. We analysed national data on higher education teaching provided by US News and The Times Good University Guide to discover what students are prepared to pay for, what they get for their money and how satisfied they are.

The higher education system in the US is probably the best in the world. It combines top-notch research universities with unequalled levels of participation (more than half the population obtain a degree). Diversity in this system is therefore exceptional, and there is considerable choice for those who can afford it. The most expensive universities must demonstrate that they offer students more in return for the extra fees they charge.

Part of what is on offer is research prestige combined with elite selectivity. But do institutions that charge top tuition fees also offer better teaching provision? Five top public universities were compared with top private universities in the same state. Students at private universities pay on average an extra 80 per cent in fees, and in return for this they get an extra 80 per cent of their time in small classes and 160 per cent more academic staff. When student satisfaction is measured by the proportion of alumni who contribute to university funds, private university students are more than twice as satisfied. The US system is very diverse in its teaching provision, even among top-ranked universities. It seems that market mechanisms translate higher fees into better teaching provision.

Comparable data on teaching in the UK sector are less informative. For instance, the proportion of student time spent in small classes is not available nationally. The most readily available source of data on teaching quality is the Quality Assurance Agency score, which is an arbitrary measure. The average QAA scores at universities range between 19 and just under the maximum score of 24, which misleadingly implies that there is little difference between the best and worst universities.

We analysed data from The Times Good University Guide to measure diversity in teaching provision in the UK sector (excluding Oxbridge, as being distinctively structured and funded). A comparison of five pairs of some of the best pre-1992 and post-1992 universities in the same cities shows considerable diversity in teaching provision between these tiers of the university system. Despite centrally fixed fees, the pre-1992 universities still provide an extra 40 per cent of academic staff, and spend an extra 65 per cent per student on information technology and library facilities. If completion rate is taken as a surrogate measure of student satisfaction, then there is also 15 per cent extra satisfaction in the pre-1992 institutions.

Such differentials are relevant in the current political climate, in which some people talk of the "danger" of creating a two-tier system by deregulating fees. There are already tiers in the system, even among the better universities. Other institutions have considerably worse teaching provision than those listed, with student-to-staff ratios as high as 30:1. Given such diversity, a uniform higher education system for 2 million-plus students would be uniformly mediocre in its teaching provision. Financial constraints would dictate that differentials were reduced by levelling down towards the worst institutions.

If differential tuition fees become part of the UK system, teaching provision will become an area of increasing competition. The best and most expensive universities will need to advertise their strengths honestly, and perhaps improve them. Some UK universities will probably wish to specialise in excellent undergraduate education - in a manner analogous to liberal arts colleges in the US.

Small undergraduate-only colleges such as Amherst, Williams and Swarthmore attract some of the brightest US students while charging fees as high as major research universities and the Ivy League. Their webpages emphasise low student-to-staff ratios, small classes and (distinct from research universities) tuition provided by faculty members rather than teaching assistants. Amherst is the top US university for student satisfaction, with two-thirds of alumni contributing to college funds annually.

For those who advocate that the best UK universities should raise money by charging higher tuition fees, the message from our analysis is optimistic: higher fees translate into more teaching provision. When universities are funded mainly via students, rather than from central government, people will pay for better teaching and they will get what they pay for.

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