"What is a university education worth? Who derives the benefits? And who should pay for it?" asks a story in yesterday's New York Times.
In the current issue of our magazine, it's a topic we explored—namely, what do educated, overqualified 20-somethings do when they can't find meaningful work (add to that, an often crippling amount of student loan debt).
Britain has recently come up with a new approach entirely: You only have to pay for college, if you end up being successful. After a yearlong inquiry into higher education and student finance, the report calls for a free-market approach instead of capping tuition. Specifically, "students do not pay charges, only graduates do; and then only if they are successful," with no one earning under the equivalent of $34,000 USD required to pay back a cent.
John Browne, the former head of BP, who chaired the committee, told the BBC: “If you choose to go into a job which doesn’t pay very much or if you choose to go out of the workforce to build a family, you won’t have to pay it back.”
According to Andreas Schleicher, an official in the education directorate of the Organization for Economic Cooperation and Development, the answer to who pays for higher education depends largely on how society views the benefits. “In the United States and Japan university education is viewed as a private good — something whose benefits accrue mainly to the individual,”
Schleicher contrasts this with “the Nordic model, where they believe higher education is a social good, like clean water or paved roads, so they make it free for everyone, paid for by high progressive taxes. Denmark, Finland, Iceland, Norway and Sweden currently do not charge any fees for university education.
Clearly the flipside of the British proposal is that colleges can soon charge unlimited fees, further widening the gap between who can (and cannot) afford higher education. Our approach of funding tuition from private lenders has long surpassed a modicum of sustainability.
Which country's model do you think is best? And should we adopt Britain's proposal?