Paying for Higher Education. Paper No. EA026

The United Kingdom (UK) has dramatically increased the supply of graduates over the last four decades. The university system has successfully produced a huge increase in mass higher education over the last 40 years to meet an increased demand for skilled workers. It is one of the UK's most successful export industries in terms of attracting foreign students and is second only to the US in terms of scientific prestige. The coalition government's efforts to transfer the financial burden of higher education away from the taxpayer and towards graduates, and create a more efficient, competitive sector, have not yet materialised. In fact, the current system has almost no price variation and is almost as expensive as the one it replaced. This report discusses the costs and growth of higher education in the UK.