Market forces have brought chaos to universities

Market forces have brought chaos to universities
Lifting the cap on fees has marketised higher education, with falling student numbers and reduced entry requirements

Some call what's happening in the university sector a "radical overhaul". This sounds planned and orderly. But as student numbers fall and talk turns to the politically embarrassing possibility of university bankruptcies, this starts to look more like a demonstration of the law of unintended consequences.

The increase in fees was originally proposed to the last Labour government by Lord Browne, in response to the universities' own push for more income. He suggested lifting the cap but clawing back some fees from universities that charged more than £6,000. No incoming Tory government was ever going to pass on this opportunity to reduce long-term expenditure and "marketise" the sector. But, in coalition, they had to accept the generous terms for student loans that Nick Clegg needed in order to mitigate his shameful volte-face on his "no fees" pledge. Meanwhile the universities, pretty much to a body, decided to adopt the highest possible fees. With different elements all pushing their own agendas, it was a lash-up from the start.

University applications fell drastically last year, by 54,000 students – representing the population of three entire universities. Recent figures suggest a continuing downward trend, especially among home students. But any hope that a fall in numbers might lead to a reduction of public expenditure looks compromised by the generous terms for student loans. Students don't have to start paying back until they are earning £21,000, which in the current climate may take some time. Indeed, given how many people now have interrupted careers, many may never pay back at all. University lecturers have been heard describing the loans as "free money" to potential applicants.

Then there's the issue of EU students. Their numbers have fallen less than home students and their payback rates are far worse, partly because reclaiming their loans is difficult and because incomes are lower in some EU countries. According to the Financial Times, the government expects to recover only two-thirds of the cost of the loans.

Nor have attempts to make the sector more competitive delivered clear outcomes. If you marketise a sector it will, unsurprisingly, adopt market techniques to survive. Applications figures could have been even worse had some universities not drastically dropped their entry requirements, or "tariffs". Leeds Metropolitan was reported as having dropped its tariff to the equivalent of two Es on some courses, and there is widespread anecdotal evidence that many universities made similar – if not quite so drastic – moves.

The government claims that increased competition is designed to allow top universities to flourish in terms of reputation, research and recruitment, hence their policy of allowing universities to take unlimited numbers of students who achieve two As and a B, and figures released this week talked of "winners and losers". Bristol and Cardiff had increased recruitment but in other universities, including some of the Russell group, recruitment had decreased. Many were suspicious: was this a true test of the "survival of the fittest"? Or were the so called "losers" those universities that had not played the entry game right or stuck by their standards, refusing to lower their tariffs?

Admitting students with reduced entry requirements puts a strain on other students and staff. And what will happen when these students can't keep up? Now they are paying huge fees, how easy will it be for lecturers to fail them? Students will be more demanding of support and resources, and universities won't want them to leave. Will the blame for failure shift on to the course or lecturer?

Another unintended consequence reshaping the higher education environment is the shift in gender ratios. The decrease in applicants in 2012 was four times greater among men, exacerbating an existing trend towards more women graduates. Mary Curnock Cook, Ucas chief executive, describes the trend as "striking and worrying". Perhaps as serious is the massive decline in part-time applicants, invariably mature students who, although now offered access to loans, are being deterred by the huge fees.

It's not just first-time degrees affected. Universities are steeling themselves for a massive decline in home applicants for master's degrees in 2015, and are frantically chasing overseas students – which brings them into direct conflict with the government's policies on visas.

Perhaps more worrying than the chaos created by unco-ordinated changes seriously affecting who has access to higher education is the lack of public debate. Universities themselves appear divided and lacking in direction. Instead of sharing data and highlighting the significant, unplanned and unvoted for changes currently reshaping higher education, leaders of the sector seem more worried about loss of face and market position. This stance means the sector is prey to all the disadvantages of a market system with none of the advantages.

The Guardian, 24/01/13