University funding structure leading to ‘artificial cap’ – think tank

Scotland’s university funding structure is leading to an artificial cap on the number of domiciled students able to attend university, a think tank has said.

In a new briefing paper on university education released on Monday, Reform Scotland calls for Scottish graduates to pay back a proportion of their university fees when they earn enough money to do so.

As it stands, the Scottish Government sets the amount of funding it will provide to Scottish universities each year in order to cover free tuition for domicile students in Scotland.

However, the briefing, Scrap The Cap, argues that this has led to an 84% increase in the number of Scottish-domiciled applicants being refused entry to universities in Scotland since 2006.

Reform Scotland proposes a system requiring repayment of tuition fees by those who can afford to do so, while anyone with little financial benefit as a result of attending university will repay “little or nothing”.

The think tank has also suggested that the Scottish Government could look to introduce schemes to cut or scrap repayments for graduates who remain in Scotland in order to work in certain sectors for set periods of time.

Reform Scotland’s research director and co-author of Scrap the Cap, Alison Payne, said: “While society as a whole benefits from having a well-educated workforce, the individual graduates themselves also benefit from the higher earnings they accrue.

“However, at present in Scotland, only wider society pays through the tax system for graduates who are originally from Scotland.

“The funding arrangement may seem like it benefits Scots as there are no direct fees to pay to attend university, but it has also created an artificial cap on the number of Scottish students that can study in Scotland.

“Our young people’s ambition is being stifled by how we fund higher education.”

Lindsay Paterson, professor of education policy in the School of Social and Political Science at the University of Edinburgh, and member of Reform Scotland’s Commission on School Reform, added: “We need to scrap this unfair cap.

“To do that, graduates should contribute towards the cost of their higher education by means of a deferred fee, to be repaid once they earn more than the Scottish average salary.

“The proceeds from the repaid fees would free up money to provide bursaries for entrants to university from low-income families.

“Such a system would ensure a ‘no win, no fee’ university education.

“This change is not only inevitable, it is also right.”

A Scottish Government spokesperson said: “The Scottish Government remains committed to free higher education for Scotland-domiciled students and access to university being based on the ability to learn, not the ability to pay.

“Our continued commitment to free tuition ensures that eligible Scottish domiciled students studying in Scotland do not incur up to £27,750 of additional student loan debt and produces the lowest student debt levels in the UK.”