Saturday, 24 October 2009

How are we going to pay for a Learning Society?

Slí Eile: It is necessary to point out that no society anywhere in the world provides ‘free education’. Paying for teachers, other staff, materials, buildings etc comes from the public purse and households and businesses through various taxes, fees and levies. In some parts of the world, businesses contribute to vocational education through a corporate levy (e.g. through the chambers of commerce in Germany).

Generally, primary and secondary education are ‘free’. In practice, households – depending on their means – probably spend anything up to a third of what is spent by the State on various school-related costs (the precise amount is difficult to measure or compare across countries). In higher education, practice varies. From a relatively universal provision in the 1960-1990s many economically developed countries have moved back to arrangements for charging fees for higher education. Ireland moved in the opposite direction in the 1990s.

The issue of ‘free fees’ at third level came up in this country as an issue in 2003 but was quickly quashed for political reasons. Social equality has been cited by many critics of ‘free fees’ but this rationale is not entirely convincing given the track record of some of these critics on the wider social equality agenda. Some critics have pointed to the ‘funding crisis’ in third level as a reason to complement state funding with some higher level of household charges for tuition. A ‘Student Registration Fee’ is just a fee by another name (has anyone really quantified the costs of ‘tuition’ and other institutional costs in HE institutions?)

I believe that there is a strong moral case for a publicly-funded, universal, inclusive, democratically run public system of lifelong learning from early childhood through to adult learning and training. If society chooses to have such a system and to fund it through national or local taxes then it must be prepared to support a much higher tax-take than is presently the case. The claimed ‘unfairness’ of raising taxes from low-income households (many of whom never had the chance of going beyond primary or intermediate/group certificate) to pay for third level of education of well-off students in, for example, medicine is a serious concern. At the risk of over-simplifying, there are a number of ways of addressing this:

A General taxation to support all tuition costs (Labour Party, Green and Sinn Féin positions)
B Tax on graduates (Fine Gael position)
C Tuition fees for those who can afford it (Fianna Fáil position).

The problem with solution A – as it currently stands – is that it is not applied to every lifelong learner. So, for example, part-time students at third level do not generally avail of free tuition, full-time post-graduate students have to pay increasingly hefty fees, students from outside the EU (excluding the very rich ones!) have to pay very high fees and this is a barrier to student mobility and internationalisation where Irish HE needs to catch up with the rest of the English-speaking world. The other problem with A is that as the fiscal situation in Ireland continues to deteriorate (essentially the slash and burn strategy is not working and may be pushing borrowing up further) the need to re-prioritise public spending (if not to reduce it) arises. Why should the very well-off continue to enjoy free tuition at third level when others face pay cuts, welfare reductions, job losses etc.?

True, but the very same argument can be made about medical cards, ‘free travel’ for our seniors and child benefit for high-income households. The problem with universalism is that you will always have rich folks in the net and you can always point to this case and that case of subsidy. The alternative based on needs and means-testing is very well in theory but, in practice, leads to other anomalies (how do you assess income and wealth in a fair and transparent way when some occupational groups can effectively write-off all sorts of costs and capital allowances against income not to mention wealth if that were a criterion). One of the reasons behind free fees in the mid-1990s was (i) the unfair tax covenanting which free fees replaced and (ii) the unfairness faced by PAYEE people vis-à-vis self-employed, farmers and others when it came to income assessments. The improvement in participation by some social groups between 1998 and 2004 has been adduced as proof of the benefits of free fees. However, I do not think you can prove anything of this sort without looking at a whole range of other factors – something that has not been carried out by any researcher.

The problem with the graduate tax proposal (B above) is that it does not raise money in the medium term (if that is the main concern) and it doesn’t address the equality issue. The other very real concern is that such a proposal gives a strong incentive to those who will emigrate in the coming years stay abroad and skip the tax. Given the mobility of highly-skilled labour this is a very real concern and one that is not taken seriously by proponents of the loans or graduate tax approach either in recent times or in the 1980s when it first came up.

This leaves us with option C – getting more households to pay for third level education. While I think that the initial decision to introduce ‘free fees’ was not a wise one – in the context of continuing high costs for part-timers and households having to supplement inadequate funding of first and second level – I think that any proposal to simply abolish free fees and introduce tuition fees as a general rule (which will inevitably rise from year to year once started) would be a backward step. The experience of the UK and Australia suggests that the re-introduction of tuition fees, there, has done little to promote social equality. Indeed, one of the great leaps forward in human skill in the United States was associated with the provision of ‘free education’ to soldiers after WWII who had served their country. The provision of universal upper secondary education in the 1940s was followed, quickly, by rapid expansion in college and university education in the US in the 1950s and 1960s. Likewise, the partial opening up of higher education to women and working class students in the UK helped to transform opportunities for millions.

In many ways the demise of the ancien régime at Stormont was the result of a better educated Catholic middle class gaining confidence to challenge discrimination. Catholics were badly discriminated against but had the benefits of the NHS and some managed to benefit from fee higher education.

If, as some argue, fees should be reintroduced for full-time undergraduates of EU nationality, why not extend fees to all post-compulsory education – as was suggested by some in the aftermath of the ESRI Tussing report in 1978? Why should post-compulsory education (senior cycle of second level) be ‘free’ for very wealthy families? I guess one answer to this is to say that almost everyone participates in second level education whereas third level is much more selective and socially discriminatory. However, there is huge variation in the extent of second level completion by locality, school and social group.
Advocates of reversing the third-level ‘free fees’ policy supposedly on equity grounds need to be consistent. Why should the line be drawn at third level?

I am not suggesting that fees be introduced at second level to restore the pre-
1968 situation. ‘Free education’ at second level was a milestone in Ireland history, socially and economically and in no small way paved the way for economic development in the 1990s onwards. However, a coherent and egalitarian approach to lifelong learning needs to be informed by the following principles:
* Public provision of education up the age of 18 to provide all young people with a good, rounded and vocationally-relevant preparation for life and work.
* Sharing of costs between public, private and household interests but with the vast bulk of costs undertaken by public sources in the early to mid-stages of education (roughly first and second level)
* Direction of scarce public resources to helping those least able to afford education to participate in further, higher and adult education.

The present funding formula is fragmented and biased in favour of those best able to avail of educational opportunities. Operating on the principle of ‘the more you have the more you get’ principle we have an inefficient and publicly wasteful system that militates against low-income households and discourages people from pursuing opportunities in the post-18 age bracket.

To put it another way, we have a rationing system whereby third level places (full-time undergraduate) are rationed out on the basis of success in one assessment or test known as the Leaving Certificate while another rationing system operates to allocate a fixed number of ‘post-leaving certificate’ places to a huge pool of young pool (and a growing number of adults) who wish to avail of second chance education but cannot in many cases.

Reflecting their middle-class audience, the serious media outlets obsess with ‘getting into college’ and measure success on this basis (including league-tabling of second level schools). The alternative measure of success is Leaving Cert points which determine third level entry. The ultimate metric is employment and income – especially that arising from the various careers from law to medicine to business. Frankly that is an empoverished notion of education. (I suggest two films for those interested in thinking about these issues:
Kess by Ken Loach
Educating Rita)

Yet, the roots of inequality are sown long before children reach school. Differences in income, health, parental education and associated cultural capital impart a huge difference in starting point to children as they start out their educational journey at junior infants. At each hurdle along the way from selective entry to second level to competition for places in medicine or some other highly prized path the children of disadvantaged households are left behind to experience poorer supports, less privately funded extra-curricular activities and immersion in schools and localities where the odds are stacked against them. Such is life in an unequal society. People learn, early on, that ‘this is the way things are’. One of the immense ironies of 'Christian ethos' (Catholic or Protestant) in Ireland as in many other countries is that, in practice, it served to reinforce social inequality and educate the elite for elite positions in business, civil service, the army and the church. Ever wonder where the heroes of our banking, public service, corporate and church systems were educated? (This is not to deny the equally valid point that some religious providers of education provided unique opportunities to the disadvantaged to realise their education and personal potential and a few have courageously and consistently challenged a fundamentally unjust and corrupt society).

On the funding of education, a solution needs to be found that addresses a number of issues together and not just in isolation from each other:

*Rebalancing of educational investment (time, money, effort, quality) towards the early years of childhood (roughly from birth to about 7) where language, social skills and self-confidence are established for life;
* Changing the way in which schools are run to open management to democratic community control and accountability – schools remain some of the most undemocratic institutions in society;
* Transforming the nature of the learning experience away from rote industrial-age training to a broader, more applied and learner centered experience;
* Provide a universal and publicly-funded system of education as a fundamental human right and privilege and not just as a commodity to be traded and invested in for personal gain only.

On the issue of ‘third level fees’ it is necessary to propose solutions that channel resources to those most in need while defending the social gains made so far.
I suggest a solution in regard to third level fees on the following lines (which does involve some level of fees for very wealthy households):
For all households above a particular threshold of income over a three-year period – introduce a cost-sharing scheme whereby the full economic cost of a course is divided between the household and the State (this might be on a 10:90 basis). The full economic cost of a course may be a multiple of nominal tuition fees. In fact, before ‘free fees’ the State effectively subsidised a large part of the total cost of provision. In a revised cost-sharing scheme the bulk of the total cost is still covered by the State (out of general taxation). However, a fixed ceiling (e.g. €3,000) and a 10% cost of total costs – whichever is the highest (normally no more than €1,000 per annum per student) could be set. This would replace the current registration fee. Costs average about €11,000 per annum but there is wide variation around this average with some scientific oriented courses costing a lot more than the average.

The real barrier to entry by disadvantaged households is living costs (for those who survive education to Leaving Cert level if they have not been already knocked out of the 'social tournament') – especially those ‘away from home’. If there were a way of channeling the proceeds of a cost-sharing arrangement (as above) towards enhanced living cost allowances for disadvantaged households then the fairness of a revised funding mechanism would be more apparent. All of this should be de-coupled from the other big issue of what overall level of funding is appropriate for each level of education and education as a whole.

One way to focus this debate is to set a national target that up to 10% of GDP is spent on lifelong learning of which HE is one element (shock, horror, what about Bord Snip!!). Other elements would include workplace training, schools and pre-school. Such a target would need to be included in an overall plan for the Learning Sector to bring about efficiencies and better combinations of resources and talent with the focus, more than ever, on the individual learner.

Look - the alternative to a rational, inclusive and ambitious Learning strategy is a dumbed-down non-smart economy, a sick society because unequal and an impaired democratic spirit because learning is the key to active and responsible engagement.

Lets think big and beyond the current narrow debates.


Keith O' B said...

Good article, but you fall into the same trap with the idea of cost-sharing ratios to replace the Reg Fee as the Reg Fee currently does. I.e. that thresholds can and will be moved in response to changes in political/economic shifts.

The -easiest- way of funding third level is to use the structures that are there currently. There is no need to figure out a direct way of getting Tuition Fees off the wealthy when by adjusting taxation bands you can do it via the Revenue Commission and save the extra administration costs.

I've written and researched the issue of third level funding for over a year now and its pointless talking about it unless you are willing to revise the whole income revenue structure from taxation.

Its basic progressive taxation. Income/wealth taxation is not just the only funding stream. Education is a socio-economic good, and so should be allocated funding out of the 'pot' as it where.

I personally thing the arguements against A were a bit flimsy. :)

Martin O'Dea said...

Keith O'B, I agree wholeheartedly with your points. In fact, I see it hard to comprehend how anyone might disagree. Education is a public good and of systemic benefit. We could charge individuals over a certain income threshold a water rate at a higher point than those below that level and higher again if there is only one earner and no dependents etc. We could try to administer society accordingly and pay no heed to whether items are luxurious, necessities, common in nature, communally good and so on.
Or, as you rightly point out, we could make this much more efficient by inventing a system where people contribute through paying a portion of their incomes to these common benefits; we might design it so that those whose incomes are very high and can afford to pay more, do so, and those whose incomes are very low and can't pay much or any, also, do so... we might call it Taxation !!

So, disbelief posing as sarcasm aside, we clearly have the framework of a fairer society in our grasp, and we need to highlight what we feel are the priorities for our spending and how we can spend best, gaining value for money throughout our public spheres, health infrastructure etc.
Education is just essential here. I can speak from personal experience where I have seen two generations, one of whom had limits placed on their potential because of the inaccessibility to education, and one of whom were freer to engage. The difference at that juncture was Donagh O'Malley and the results were just massive; not only in terms of fairness but also in terms of economic activity. The truth is we could easily argue that primary and secondary education should also be means tested, but this is to miss the point. We would then, in fact, be circumventing the mechanism of societal contribution already in place as well as creating an elitist association by highlighting earnings as a defining characteristic throughout society.

Finally, I feel that there is a lack of general awareness of the necessity of vast numbers or people to be trained to at least third level education. The future is a very different place with some mindboggling changes to be adopted due to technological advances. If, as a county we truly wish to remain competitive we need to act now on the principle that there are thousands of people currently living in Ireland that will need educating in areas that they may not yet understand even conceptually. I am not sure who administers this site but I would be grateful at some point of the opportunity to create a post regarding this area of technologies exponential growth and the repercussions for education.

Slí Eile said...

@ Keith Thanks for your observations. In principle I, too, favour funding third level from general taxation and where such taxation is progressive and fair. None of this applies at the moment. Instead we have a mish-mash of (1) skewed taxes (towards income and consumption which huge write-offs and reliefs for all sorts of unproductive activities and with little evidence that the powers-that-be will implement the more progressive strands in the Commission on Taxation any time soon - like this side of the end of the recession) and (2) arbitrary distinctions between levels and modes of education (why should full-time courses be free but not part-time and why should undergraduate programmes be free and not postgraduate). It is not cohesive or well thought out. But, I wholeheartedly agree with you on the need to 'revise the whole income revenue structure from taxation' and I do not think that this should be postponed as very much seems to be the case. The real issue is who all dimensions of lifelong learning be best funded from taxation and why priority should be given to which levels and which groups.

Slí Eile said...

@Martin I agree that 'Education is a public good and of systemic benefit'. However, it is also -at the same time - a private good and of exclusive benefit to some who can afford to prepare young people for outstanding performance in the Leaving Certificate (18 years of extra-curricular activity and plenty of home cultural, human and financial capital). Seeing both aspects and their implication for funding is important I think.

Your arguments and those of Keith I find very convincing and I cannot earily bring myself to supporting an end to what has the potential to be a more just and effective lifelong learning investment strategy (society pays for education as a right from cradle to grave). At the same time, if we are serious about investing more in early childhood, lowering class size for young children (where the evidence shows a positive impact) and targeting resources at households and individuals in greatest need - is it unreasonable to ask for a contribution directly from high-income households towards 10% of the total economic cost of a programme? Ideally, it could be raised through taxation (and more efficiently as you point out). However, what priorities are needed here and in what time order. To consolidate on the structural fiscal deficit, to inject a stimulus to address the cyclical deficit and to raise taxes to move Ireland towards European norms of public service is needed but will challenge the country for the next decade (it took Finland and Japan the best part of a decade to sort out the mess caused by their banking crises). However, there may always be a rationale for some level of private spending (and choice) within a predominantly public system of lifelong learning. So, where do such costs come in and for who? The rationale for direct costs linked to tuition at third level is based on the notion that education at this level (especially in select prized-after fields) is a private good to some extent along with being a public good (which continues to justify very significant public subsidy - 90% as I suggested in my post).

But, I have an open mind on all this and welcome counter-arguments and suggestions from yourselves and other readers/bloggers of this site

Proposition Joe said...

@Slí Eile

"a private good and of exclusive benefit to some who can afford to prepare young people for outstanding performance in the Leaving Certificate (18 years of extra-curricular activity and plenty of home cultural, human and financial capital)."

Well I think you have to distinguish between co-lateral aspects such as having books lying around the house or sending kids to after-school violin classes, and direct hot-housing in rote-learning mills like the institute on Leeson Street.

The former is perfectly fair & natural while the latter smacks of "gaming" the system. Not only does it disadvantage those who can't afford the "miracle" revision courses, the skills learned are to all intents & purposes close to valueless in a modern knowledge-based economy. In fact the kids' facility for innovation and problem-solving are being damaged by the highly ritualized learn-off-&-regurgitate form of learning incented by the leaving cert in its current form.

The crucial first step IMO is a complete reinvention of how kids are taught at second level and the approach taken to verifying that learning. The grinding mills only exist because the LC is so darn predictable, and so easy to "fake". Simply making the syllabi more wide-ranging, the exams less predictable (like the old NUI Matric), allowing more open-book exams, and changing the marking schemes from year-to-year would be a start towards incentivizing kids and teachers to work towards building _understanding_ as opposed to parroting.

The current whispering-campaign against the Project Maths initiative by the grind-merchants is a good indicator that reform of the leaving cert could eat their lunch and thus level the playing field somewhat.

Martin O'Dea said...

Proposition Joe, I agree that education needs overhaul, but again in the information age this can be a source of enthusiasm and hope as the boundaries of what can be done are pushed back. Access to information is also a key economic and social divider, I pondered this recently while watching, for free, an online streaming of a lecture from Stanford University given by a leader in his field.

We may well find that technoloy allows us provide education in cheaper ways while, essentially, we develop means to assure standards.

Sli Eile, I understand your arguements, also, and appreciate that the financial circumstances may require certain principles in the social structures that we aspire to need to wait for a more manageable environment. However, I feel that in the balance we should strive for the sounder principle and in the particulars of this debate would it not be a retrograde step to reinstall third level fees.

One would imagine also that the government could be a little more creative in the offering of an educational option within its unemployment benefit and general social welfare schemata inclusive of arrangements allowing companies to retrain, upskill, and receive government assistance in availing of educational access while reducing their wage bill; to attempt to increase our educational levels while alleviating all the potential difficulties from the rising flow of joblessness