As I explain in the chapter on Voluntary Associations [Part 6, Chapter 2], all these clubs depend on the energy and commitment of their members. There is no grown-up to run the club for them; they have to do it themselves. If the activity requires both expertise and money, members of staff may be invited to help, give advice and even take part. Putting on a big dramatic production requires huge efforts - and some money. But in principle, students run student activities in their spare time.
Sixty five years ago, the Government decided that university education should be free to all those who won a place on the basis of academic ability. The state paid for universities, decided how many places it would fund and how much each student should receive as a grant (stipendia). At that time about 3% of the age group attended university, so it was not difficult for the government to pay the tuition fees and the grant. Throughout the following decades student numbers increased as new universities were built and old ones expanded. At first the expansion was slow, and then, especially from the 1980s, faster and faster. Today about 43% of the age group enter university so the cost for the government is huge - as it is in all countries with a significant student population. How can this mass of young people, attending university for a minimum of three years be paid for? The Government still pays for most of the infrastructure, teachers' salaries, research and so forth. But it cannot pay for all those students eager to study for a degree.
The possible solutions in 2009 are, it seems, four. First, we can cram more and more students into large lecture halls, giving them a much more anonymous kind of teaching with fewer resources per student. This has been the traditional answer in some other parts of Europe and in many of the huge, state universities in America. In many British universities we have already taken steps in that direction - unwillingly. Secondly, we can reduce the number of students in our universities. But few people think that we should try to stop potential students from acquiring more education. Indeed, it is felt to be so important that more and more older people (between say, 27 and 60 years old) are applying to enter universities, either to acquire new qualifications or to learn what they missed when they were younger. Thirdly, we can make students (or their parents) pay for their education. This, of course is the route Russia has taken. We have had major debates on the issue in Parliament, where a majority of members of Parliament believe deeply and passionately that accepting some students because their parents can afford to pay is profoundly unfair. British universities with the support of Parliament have defended themselves against the imposition of 'commercial students'. (Many of you reading this chapter are yourselves 'commercial students' and I can write from experience that many of you are excellent hard-working scholars. It is not your fault or responsibility that you have rich parents!) Nonetheless, having a mixture of state-funded and commercial students unquestionably distorts the system. So we hold to the principle that university education is free for any British school pupil who gains a place by academic competition. The fourth solution is organise a system of student loans. This is the current answer to the problem which we have chosen in Britain.
This is how the system works. All students have to pay £3,225 at the beginning of each academic year to their university as a contribution to tuition fees. (Soon they will have to pay more.) In addition they need money to live: for food, rent, travel, books, etc. The minimum necessary will be about £5,500 a year. Therefore each year a student has to find a basic £8,725. Most students do not have this money so they borrow the money as a special, state-funded student loan. At the end of three years they may owe the state as much as £26,175. That is a colossal debt for a young person about to start work but it is the price our students pay for free education at the time of their studies.
Let us consider two students, Alison and Oliver, who have just graduated. Oliver studied economics and is a clever, ambitious student. When he leaves university he gets a job in a firm of mortgage brokers. In his first year he earns £22,000 a year, quickly going up to £27,000 a year. That is a very good income for a young man. When he pays his taxes he also has to pay back his student loan, and because he is earning so much he has to pay back quite significant sums each month.
Alison thinks she wants to do some kind of social work, but she is not sure whether she might change her mind. So she decides to get some experience first by working as part of a charity team helping drug users. She is paid for her efforts but at 'charity' levels. She only earns £10,000 a year. In Britain a person living on £ 10,000 is living in poverty. With this salary she does not have to pay back anything at all. Although she feared she would find the work depressing, Alison discovers that she really enjoys the friendship of the team and the experience of helping the addicts. So after a year and a half she joins a special local government drug rehabilitation programme. Here she is paid £15,500 a year. This is just enough to start the loans-pay-back system going. Each month she has to repay a tiny amount, along with her taxes.
So repayment of loans is related to current earnings and is automatically calculated. The government's argument is that on average graduates earn during their lifetime a great deal more than non-graduates, so it is reasonable for them, during that lifetime to pay back to the state some of the money that has been spent on them. But if they are not 'average' graduates, and actually earn less money than most, then they do not have to repay the state for their higher education.
A policy of loans-for-students has been much discussed, much worried over, and is constantly being improved - and increased. Very poor students from homes where parents have had no higher education may still get their education paid for entirely, because the government fears that otherwise they will be too scared to take on such a big debt. Universities arrange courses on 'How to Manage your money' in order to help students who might be in danger of wasting the precious pounds which they have. So far there has been no evidence that the loan system discourages young people from applying to become students. At some level most people can feel that it is both fair and not too frightening. It is better than any other available system. Whether the universities will be satisfied with the extra money it provides remains to be seen. At the time of writing, the government proposes that universities can charge up to £7,000 in fees each year, making the student loan almost twice as much. We do not know how that will affect the decisions of school-leavers.
'Managing one's finances' is a matter of anxious concern for most new students. The first thing they do is to open a bank account - or arrange a new bank account. The money they borrow via the loan scheme, or which they are given by their parents needs to be carefully budgeted. They have to pay rent, buy food, pay for travel, buy books and materials, buy at least a few clothes and still think about small daily needs and the pleasures of life. (One noticeable difference between girl students in Russia and in England is that in Russia girls dress much more elegantly, expensively and sometimes very strangely. English girls, dressed in jeans and a T-shirt, can look sloppy and unkempt; but Russian girls dressing to look like prostitutes in a mixed class of girls and boys is a sight incredible to English eyes.) Our dress bills are smaller than yours, but even a T-shirt costs money.