Will fees mean more lawyers?

The White Paper on higher education is expected to have some seismic effects on students, making them think harder about the courses they choose to study and whether they take a gap year beforehand. Lucy Hodges gauges responses to the new plans

The Government's plans for higher education will change the university landscape, and the hopes and aspirations of teenagers, according to the experts. Universities will be given more autonomy, but young people will have greater burdens. Some are predicting that the Gap Year will become a thing of the past, as young people decide to build up money to pay fees rather than take a year out travelling to Goa or the Costa Rican cloud forest.

The courses that students choose could change as they become harder-headed and keener to search out the degrees that will bring them the best-paid jobs. We might find even more wanting to become lawyers, says Professor Alan Smithers, of Liverpool University, and less deciding to try to help the world by working for Greenpeace or Save the Children.

"I think that young people will think a lot harder about what going to university will mean for them," he says. "Students have got into the habit of living away from home. That may change. And they will look more carefully at the intrinsic benefits, such as how much they enjoy studying a subject and whether it will get them a good job."

Experts in university funding believe that Tony Blair will go down in history as a courageous prime minister who was prepared to fight for what he believed in, against the combined forces of lecturers' unions, the National Union of Students, Labour MPs, the Treasury and Middle England. If he gains enough support from Labour backbenchers for his reforms – and the signs are that he will – he should secure universities a new, improved financial future. "I think this is a terrific deal for students, once people understand it," says Professor Nicholas Barr, of the London School of Economics. "It rests on the assumption that, if you get those who can afford it contributing more, a huge dollop of money will be freed up to address the issue of access.

"This is a well thought out, untrimmed policy, with politicians behaving as they should and campaigning for what is right. I am not a natural fan of any government, but what they are doing here is right. It is exactly the system that a bunch of us have been advocating for some time. It means more resources for universities, and that should address concerns about the quality of higher education and about the lack of funds for research."

While the experts rejoiced, however, representatives of the new universities (the former polytechnics) and some of the colleges of higher education expressed dismay. Some of them will not charge the top-up fee of up to £1,900 in addition to the flat-rate £1,100 fee – though, as an Independent survey found on 25 January, others will. For some the gap between them and the leading universities in the Russell Group will widen.

In addition, few are expected to use the new power to reduce their fee below £1,100. "I think that any university that charged below the flat rate would be crackers," says Roger Brown, principal of Southampton Institute. "There is very little indication that demand is as elastic as that."

Geoffrey Copland, vice-chancellor of the University of Westminster, and chair of the Coalition of Modern Universities, says that his university is unlikely to reduce the fee below £1,100 to recruit more students. That is partly because it couldn't afford to lose the money. But there is another reason. "The problem is that you can't, on the one hand, argue that you are underfunded and, on the other hand, cut your fees," he says.

Principals of Scottish universities are also worried. They don't have the power to charge top-up fees, which means that their universities will receive less money than those in England and, as a result, could be seen as less well-funded and therefore less good. Professor Tim O'Shea, Edinburgh's principal, has said that this issue must be addressed urgently.

As might be expected, vice-chancellors at the "old" English universities – those established before 1992 – responded more positively. "It's a reasonable compromise, given the political realities," says Professor Ivor Crewe, vice-chancellor of Essex University and president of Universities UK from August 2003. "I don't think it will turn out to be as big a disincentive to working- class families as critics have been saying.

"The student who had the £1,100 fee waived will continue to have that amount waived, even when going to a university that charges up to £3,000. Therefore, the student from a less well-off background will have to pay £5,700 in fees at one of these universities – but not until later, when they are earning. I don't think that's unreasonable."

Observers have been impressed by the lengths to which the Government has gone to ensure that disadvantaged students are not deterred from entering higher education. The abolition of the upfront fee, the raising of the threshold at which graduates start to repay loans from £10,000 to £15,000, and the zero interest rate are all important sweeteners.

"The Government has come up with a reasonably equitable system," says Professor Steven Schwartz, vice-chancellor of Brunel University. "Graduates don't start paying back their debt until they are earning £15,000, which is more than the average non-graduate earns at 25. That means that they won't lose out as a result of having gone to university."

But no one has a good word for the Orwellian-sounding "access regulator", or admissions tsar, being set up to police universities that charge top-up fees, to ensure they make every effort to recruit students from deprived backgrounds. Although business leaders on the Council for Industry and Higher Education support the new funding measures, they worry about the regulator. "It's designed for party-political purposes," says Sir Richard Sykes, rector of Imperial College London. "Regulation is a blunt tool. Too often, it further distorts a system rather than rectifying it."

The day after publication, the Association of University Teachers (AUT) met with the National Association of Teachers in Further and Higher Education (Natfhe) and the National Union of Students to plan their battle tactics. Just because the White Paper is out and Mr Clarke has made a good fist of selling it to the Commons, they are not giving up. In fact, they are redoubling their efforts. "We don't like top-up fees," says Tom Wilson, head of Natfhe's universities department. "They will create a two-tier university system and some people will be put off from going to university. We will continue to campaign strongly against them, and we expect the MPs who signed the early day motion to support us. There is all to play for."

Natfhe and the other two unions are refusing to accept that top-up fees are here to stay, believing that it is worth continuing the fight, if only to lay down a marker for the next parliament. They think that their protests could affect such issues as the threshold at which graduates start to pay back their loan (Mr Wilson would like it increased to £25,000), and the means testing of the £10,000 family income below which students receive the grant. "That is ridiculously low," says Mr Wilson.

The unions would also like the proposed grant to be increased from £1,000 to £2,000. The Government may be prepared to compromise if it means getting the new structure on to the statute books. Now, it has to explain the merits of the system to anyone who will listen.

THE WHITE PAPER IN SHORT

¿ Upfront fees to be abolished

¿ Students to pay fees of up to £3,000 a year, but only when they have graduated and are earning more than £15,000 a year

¿ Grants of £1,000 a year for those whose parents earn less than £10,000 a year

¿ Loans will continue to be subsidised and will carry an interest rate equal to the rate of inflation

¿ An "access regulator" to check up on universities charging top-up fees

BEHIND THE SCENES IN WHITEHALL

When Charles Clarke became Education Secretary, he went back to the drawing-board on the higher-education White Paper, which had already been gestating for a year. He asked fundamental questions about the kind of structure needed for the 21st century, and only then examined what kind of funding regime would be required. "He started from scratch," said one expert who is close to ministers.

All the funding options – such as whether to have a graduate tax or loan repayments – had been discussed thoroughly with officials at the Department for Education and Skills, the Treasury and 10 Downing Street before he arrived. He put his mark less on the student-funding measures of the document than on such items as universities' endowments and research, according to insiders. The section on endowments is considered to be pure Charles Clarke. If universities can build up endowments, as they do in the USA, they will be less dependent on the state, he points out. Harvard spends at least $100m a year from its endowment on student financial aid. Clarke wants to make it possible for graduates, through Gift Aid and the income-tax form, to make payments to their Alma Mater. A task force is being set up to carry this forward. He also proposes a matched endowment fund to which any university can apply.

Because so much of the White Paper had been trailed in advance, it contained few surprises. One of the more controversial areas – to concentrate research funding further – was surprisingly vague. The research assessment exercise is being reformed to introduce a new six-star rating for the very best departments – those that already get five stars and that also have a "critical mass of researchers". This would benefit the major research universities.

Teaching is given new emphasis. Universities that shine will be designated "centres of excellence" and given £500,000 a year over five years. But what will be the criteria? And who will decide?

l.hodges@independent.co.uk