Are higher tuition fees justified?

Are higher tuition fees justified by the cost of providing undergraduate education? Chris Goodall breaks down the cost of one sought-after degree course, and comes to some controversial conclusions.
Chris Goodall
29 November 2010

Are higher tuition fees justified by the cost of providing undergraduate education? Chris Goodall, businessman and author, breaks down the cost of one sought-after degree course, and comes to some controversial conclusions.

Many universities are positioning themselves to charge £9,000 a year in tuition fees. The arguments about whether this figure is acceptable will burn for years. But no-one seems to have asked a slightly different question: what does it actually cost to teach an undergraduate? Is a fee of £9,000 justified by the money a university spends on its teaching staff and the other undergraduate facilities? My assessment of the teaching provided to language students at one first-rate university suggests that it is not. In this particular case, the cost to provide a year’s teaching is about £4,500. In other words, there is no justification for charging any more than half the proposed maximum fee.

Details of my method of calculating this number follows in the next few paragraphs. The calculations may seem complicated but what I am simply doing is working out how many hours of teaching a student gets and what it costs in salaries and other costs to provide this tuition. It is very simple arithmetic and the results are conclusive.

a) I asked a 2nd year student of French and Spanish at University College London to write down the details of teaching she receives this year. She is given nine hours tuition a week in groups that range from 10 to approximately 30. The average class size is about 16.

b) She is taught a total of 21 weeks a year. The autumn and spring terms have a week in the middle in which no teaching occurs and there is no tuition at all in the summer term.

c) So this undergraduate gets 21 weeks multiplied by 9 teaching hours a year, making 189 contact hours a year. She is asked to write just two short essays a term plus a number of smaller exercises, so the marking load on the teachers is small. (It may be worth noting that she gets very little of teaching of spoken languages. Out of her own pocket she pays a Spanish native working in London to help her with the oral language).

d) My calculations then move on to estimating the cost of teaching her these 189 hours. Looking at the financial accounts of UCL, I can work out that the average employee is paid between £35 and £40 thousand. UCL encompasses a huge number of different components, including several hospitals. The average probably disguises a large number of lower paid people and also includes about 300 people who are paid over £100,000. I made the assumption that the average modern languages teacher is paid about £50,000 per year including his or her pension contribution. This figure mixes higher paid professors and young staff who have just joined the department.

e) In addition, we need to estimate the cost of administering the subject at UCL and spread this cost over the academic staff teaching modern languages. I have no easy way of calculating this figure but I don’t think it can add more than £10,000 a year to the direct cost of the teachers. It certainly wouldn’t be higher than this in a typical school or college. This means that the cost of staffing for modern language teaching is about £60,000 per teacher.

f) Staff costs, including pensions, form about 59% of the total expenses of running UCL. The buildings need maintenance, libraries need to be stocked, computers bought and rooms heated and lit. To get a figure for the full cost of a modern languages teacher, I therefore assumed that the staffing cost also represented 59% of the full cost of this individual, including all the ancillary functions. This takes the total cost of a teacher to slightly more than £100,000 a year.

g) I assume that the average modern languages teacher at UCL teaches 12 hours a week during the 21 weeks of student teaching a year.

h) He or she will therefore do 252 teaching hours a year. At a full cost of about £100,000, this means that an hour of teaching costs about £404.

i) Now consider the person I wrote about above. She gets 189 hours of teaching a year, but typically this is carried out in groups of about 16. If we take the hourly cost of the teacher (£404) and allocate this to our undergraduate, we multiply by the number of hours teaching the student gets but divide it by the number of people with whom she shares the teacher. This results in a total cost of her tuition of about £4,500 a year, one half the proposed maximum.

What does this calculation actually mean? It demonstrates that if we make very cautious assumptions, the UCL modern languages undergraduate will be getting very poor value for money if the university increases the fee to £9,000. Based on my estimate that of the full costs of a university teacher teaching 252 hours a year - equivalent to just over seven weeks work for a standard employee in another occupation working for 35 hours a week - the tuition fee should be no more than half this figure.

When I have shown this calculation to my friends in university employment, they make the following comments. First, they say that the main job of a university teacher is to do research, not teach undergraduates. Fine, I reply, my calculations assume that the teacher gets 31 weeks a year completely free of teaching. And even during the teaching terms she or he will only be in front of students for 12 hours, or about a third of the typical working week. (This leaves plenty of time for preparation of the seminars and lectures). The upshot is that university staff have plenty of time for active research, although to my mind it is questionable whether undergraduates should be paying through their tuition fee for this activity, however important it is.

The second objection is this. I assume that the university is broadly efficient, with a relatively small number of people supporting the teaching activities of, in this case, the modern languages department. Actually, my academic friends say, many universities are full of administrators and non-teaching staff. Once again, if this is true, I can see no reason why undergraduates should pay for this inefficiency. Secondary schools in the UK, which teach pupils for an average of about 25 hours a week over a 39 week year - and have to cope with marking substantial amounts of written work - get paid about £4,800 a year per pupil. Compare this to the UCL undergraduate I interviewed who gets nine hours teaching for little more than half the number of weeks of a school pupil and I think it is arguable that no undergraduate should be asked to pay more than the government’s allowance for secondary schools.

We all know what the real truth is. Universities want to do more research (on which their rankings and income strongly depend) and intend to use the higher tuition fees to subsidise this activity. But young people obliged to pay these inflated fees can appropriately question whether their money should be used to pay for the non-teaching activities of their universities. David Willets, minister for universities, might also suggest that an institution in which it costs £404 to provide one hour of teaching should be looking at radical ways of improving the efficiency of its activities.

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