Wednesday, 27 July 2011

Open University fee increase, blame where it's not due?

A tweet this morning...

lecanardnoir retweeted by dnotice2012
Tories/LibDems forcing Open University to more than treble its prices. Destroying something precious for ideology. http://qako.me/qMhCeU


The basics are this, the Open University has declared that their 60 point courses will now cost £2500. This is up from £700, a £1800 increase. It's an institution with 250,000 students, of which around 70% are likely to be doing no more than part time (60 points or less), while 30% are doing full time courses. There were about 83000 full time equivalent students.

Now, HEFCE funding was to the tune of £140mil in 2009/2010.This amount of central funding is about the same as 2011/2012.

The tuition fees in 2009/2010 were in the region of £650 per 60 points, a full time equivalent cost is therefore £1300. 78000 students needing to pay an extra £3700 per year for full time equivalence of a new £5000 fee is £307mil extra money for the OU as income.

This is more than double the current HEFCE funding in it's entirety.

Blaming the government for the current fee change seems a little premature. Obviously the policy of reducing central funding is a bad one, one I don't get behind at all, but even if we assume all OU courses fell in to a category where HEFCE would think of cutting funding significantly (potentially all together) the OU would only need to increase fees to £3000 for a full time course, or £1500 instead of £2500 for the 60 point module.

The reality is that with over 20% of OU FTE students studying courses that fall under funding that wouldn't be fully cut in the ategories HEFCE has for subject types, not even all of this £140mil will need to be found elsewhere in a worse case scenario.

Funding cuts are set to bite, but universities are savvy businesses more than altruistic learning centres. Yes the OU has to put up it's prices because of government policy to cut fees (government policy that the Labour party were completely on board with implementing themselves when in power, so let's not pretend that either the Tories or Labour are any different in this), but it's gone further than that. Unless it is also receiving significantly less funding from other funding bodies, and the type of student attending is drastically changing in terms of numbers of "paid by employer" places, the OU seems to have simply used the opportunity to pad their margins and make themselves more comfortable for the years ahead.

The OU sets out it's stall in this press release, and while it makes a passing comment about funding changes the main gist is one of carving it's niche out further. With funding changes to allow students on part time courses to receive maintenance loans, and their perception of an increase in students wanting to go in to part time study while they work...it seems the OU sees an opportunity to increase it's margins while still coming off as extremely good value for money by comparison to traditional universities.