Reform Scotland

Scrap the cap: Towards ‘no win, no fee’ higher education

Reform Scotland calls for graduates to pay deferred fees on ‘no win, no fee’ basis

Reform Scotland, a public policy institute which works to promote increased economic prosperity, opportunity for all, and more effective public services, has today released a briefing paper on university education – Scrap The Cap: Towards ‘no win, no fee’ higher education.

In the briefing, the think tank argues that the current university funding structure – whereby the Scottish Government sets the amount of funding it will provide to Scottish universities each year to cover “free”  tuition for Scottish domicile students – leads to an artificial cap on the number of Scottish students able to attend university.

Since 2006 this has led to an 84% increase in the number of Scottish-domiciled applicants refused entry to a Scottish university.

In the paper, which can be read below, Reform Scotland calls for graduates, who are highly likely to out-earn non-graduates throughout their working lives, to pay the government back for a proportion of their university fees when they earn enough money to do so. 

The think-tank proposes a system which will require repayment by those who can afford to, whereas those whose financial benefit from going to university is small will repay little or nothing. The Scottish Government could also look to introduce schemes that cut or scrap repayments for graduates who remain in Scotland working in certain sectors for set periods of time

"“While society as a whole benefits from having a well-educated workforce, the individual graduates themselves also benefit from the higher earnings they accrue. However, at present in Scotland, only wider society pays through the tax system for graduates who are originally from Scotland.

“The funding arrangement may seem like it benefits Scots as there are no direct fees to pay to attend university, but it has also created an artificial cap on the number of Scottish students that can study in Scotland. Our young people’s ambition is being stifled by how we fund higher education.”

Alison Payne, research director, Reform Scotland

“We need to scrap this unfair cap. To do that, graduates should contribute towards the cost of their higher education by means of a deferred fee, to be repaid once they earn more than the Scottish average salary. The proceeds from the repaid fees would free up money to provide bursaries for entrants to university from low-income families. Such a system would ensure a ‘no win, no fee’ university education. This change is not only inevitable - it is also right. The proceeds from the repaid fees would free up money to provide bursaries for entrants to university from low-income families. ”

Lindsay Paterson, Professor of education policy in the School of Social and Political Science at the University of Edinburgh, and member of Reform Scotland’s Commission on School Reform