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Two countries divided by their approach to higher education?

  • 4 July 2024
  • By Nick Hillman

Critics of the way that England funds higher education often assume we have copied the United States. At a surface level, this may seem true: after all, both countries have funding systems that are based on large student loans and both the US and the UK do very well in the global university leagues tables.

But anyone who regards the way England pays for higher education as a carbon copy of what happens on the other side of the Atlantic needs to take a much closer look.

This was first brought home to me when I was the Special Adviser to the Minister for Universities at the time that undergraduate tuition fees were being tripled to £9,000, a dozen years back. We were routinely attacked for supposedly copying the US funding model. But just as UK students were rioting on the streets of London, I paid a visit to California and found a totally different reality.

On the west coast of the US, I met students who were campaigning for a new funding model of their own. Their ideal system envisaged a move away from the tough student loan rules in place in the US towards something that looked incredibly similar to the progressive model we were then implementing in England. So while protestors on this side of the pond were campaigning against more income-contingent loans, those in the US were campaigning for them.

Ever since, I have wanted to help deepen the understanding within UK policy circles of what really happens in the US. So I was delighted when my namesake, the brilliant academic Professor Nick Hillman from the University of Wisconsin-Madison, agreed to write a primer on US higher education for a UK audience. His paper brings a wealth of material together and paints a picture that is indeed rather different from our own way of running higher education.

For me, there are some particularly striking findings.

  • First, the 50 US states have been reinvesting in higher education while tuition revenue has been declining. In 2022, the US states gave over $120 billion to public higher education institutions for staff and operational expenses, more than the $75 billion they received in tuition revenue. In contrast, direct subsidies for teaching have disappeared for many disciplinary areas in England and Wales.
  • Secondly, the paper emphasises the importance of the federal government. Most notably, Washington provides over $100 billion a year in financial aid and tax credits to support the take up of higher education. While President Trump rescinded the ‘gainful employment’ rules, which punish institutions that churn out graduates with poor employment records, Biden brought them back. So even though the states organise their own higher education arrangements, presidential elections matter too.
  • Thirdly, at face value student costs are broadly similar but this masks some big differences. The average charge across all US institutions of higher education is $14,688 (c.£11,600) while living costs average $12,985 (c.£10,275). The total is higher than the maximum fee plus maximum maintenance loan for a full-time undergraduate in England (£19,228), but few students pay the US totals in full. There is considerable variation because, for example, public institutions charge lower fees than private institutions and in-state fees are often lower than out-of-state fees. Total US study costs often work out lower than those in England.

I urge everyone interested in higher education around the world to read the new paper for a wealth of other nuggets too. The most common response from those who have already read it, including people well versed in what happens in the US, has been, ‘I learnt a lot’.

As an example, Westminster politicians demanding more two-year degrees, perhaps in lower cost further education colleges, could do well to look at the sharp decline of two-year degrees in US community colleges. 

Westminster politicians demanding more two-year degrees, perhaps in lower cost further education colleges, could do well to look at the sharp decline of two-year degrees in US community colleges

Above all, this new report from Professor Nick Hillman should clear up misconceptions about US higher education. But given the differences between the UK and the US, it may not help people work out where higher education policy will go here in the UK / England after the general election. To work that out, the answer may lie elsewhere and quite possibly in Australia, where a centre-left government is seeking to build a new relationship with universities via a big independent review of higher education.

1 comment

  1. Gavin Moodie says:

    Yes, there are considerable differences between the financing of higher education in England and the USA. But I suspect that critics of the ‘Americanisation’ of English higher education refer to the transfer of funding responsibility from the state to students.

    Would it be wise to note whether Mr Nick Hillman is related to Professor Nick Hillman?

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