Raising the bar: demanding higher education

For many people, the gym feels like an alien environment. The positioning of the machines, the hidden corners, even the other gym-goers feel like they’re designed to be intimidating. Depending on where you train, this may be literally true.

According to a 2014 Planet Money report, many gyms are designed not to be used. Indeed, Rudy Fabiano, one of the original designers of the most common modern gym layout, admitted that he designed gyms not to be used. The logic is simple: you pay a subscription to use your gym which doesn’t vary depending on how often you attend. The cost to the gym, meanwhile, increases with every visit you make. The incentive for the gym, therefore, is to sign you up, but then discourage you from ever working out.

Fabiano outlines some of the architectural techniques for this: the positioning of gym cafés by the entrance, to lure customers away from the gym. The positioning of cheaper, and less daunting, machines near the front of the gym and so on. This works because a gym is not selling you a workout. They are selling you the idea of health, the delivery of which is ultimately down to you. For a gym to make money, they need many people who will make minimal use of the facilities.

Similarly to a gym, the University offers a plethora of opportunities, most of which are not taken up by most students

Now consider something even closer to home: Higher Education. The model is startlingly like a gym subscription. For me to get much value at all out of my degree, I need to study, to work, and to pass exams, all of which are fundamentally up to me. The University, meanwhile, collects a flat ‘subscription’ fee regardless.

Similarly to a gym, the University offers a plethora of opportunities, most of which are not taken up by most students. Think about lecturers’ office hours – there is no limit to the number of office hours you can attend each term. Indeed, for most courses office hours are almost unused for the bulk term, before the exams begin to look over our shoulders like a furious office manager. An attentive student with many questions, therefore, could take up a dozen hours of their lecturers’ time, one on one, in a term. This is not scalable. If we all did this, the University would either face much higher costs, and would need to limit access to office hours.

Sure, you can have a look around your chosen gym or university, but you won’t get a sense of how it will work until you’ve actually paid a subscription and attended for a while

Likewise, the University often offers classes and courses in all sorts of different things that can be useful for your career for free. These academic ‘spin classes’ include lessons on computing, arts programmes, even bursaries for unpaid work experience.

Why do they offer all this stuff? It sounds attractive to prospective students.

How can they offer all this stuff? Because almost no-one takes them up.

There is another similarity between gyms and Higher Education. They both provide what economists call ‘Experience Goods.’ That is, a product whose value cannot be ascertained until after we’ve purchased it. Sure, you can have a look around your chosen gym or university, but you won’t get a sense of how it will work until you’ve actually paid a subscription and attended for a while.

In these markets, reputation is crucial. In a gym, that might mean word of mouth, or it could be the plethora of trim people who you see dotted around the gym. If it worked for them, it will work for me, right?

Have a look for money, products, and services that may be of use to you: you’ve paid for them already, after all

For a university, meanwhile, reputation is also crucial. We can’t hope to know the quality of our course until we’ve done it, and even then, it can be hard to tell if what you’ve learnt will help in the labour market.

Why does any of this matter?

The first, and perhaps trivial, reason, is to highlight how many things the Uni offers that they don’t advertise very much. As with a gym, it makes sense to really take advantage of services offered. Have a look for money, products, and services that may be of use to you: you’ve paid for them already, after all.

More importantly, though, we have to ask whether this is the best way to provide education. The ‘New Year’s Resolution gym membership’ is a tired cliché for a reason: the gym market is better at signing us up than it is at helping us achieve our gym goals. If this model doesn’t function for health clubs, why should it for education either?

In fact, in many ways the market design for fitness is better than that for universities. Most people who buy memberships they don’t use can afford the wasted money, most gym memberships are not hugely expensive, and there is substantial competition within the gym industry. It can be hard to know the quality of a gym before you’ve become a member but trying a gym for a few months and finding out it’s not very good is not that costly an experience.

University, meanwhile, is different. At most, we will study at a handful of institutions in our lifetimes, and for most of us Warwick will be the only University we attend. Add to this that much of the potential gains from universities are unknowable. Will we earn enough money for uni to have been worthwhile? None of us know now, and we probably won’t know ever, given we can’t see a counterfactual in which we didn’t come.

Three quarters of my way through a degree in Economics and I am still no closer to being able to work out whether coming to university was economically worthwhile

So, asking us to pay tuition fees makes no sense. It asks us to forecast our future far in advance, shouldering massive risk and tremendous uncertainty. Of course, if we earn within certain bands, we won’t pay back our entire loan, but this just makes it harder to work out whether going is a good idea. Three quarters of my way through a degree in Economics and I am still no closer to being able to work out whether coming to university was economically worthwhile.

And yet, the world needs more educated people. The jobs of the future will require more advanced skills and more flexible workers. If uncertainty leads us to the risk-averse option – not getting a degree – then the economy will suffer as a result. It is about time that we scrapped the tuition fee model and replaced it with something more sensible – a graduate tax that charges a portion of the premium we might make as graduates. Perhaps the government could also remunerate the Universities on this basis. After all, if my gym was only paid when I actually used it, or better yet, if it was paid in proportion to how healthy it makes me, perhaps they’d be a little more encouraged to help me.