This article reviews existing tuition fee arrangements for higher education throughout Europe, and drawing on this, suggests a number of approaches which the Scottish government might pursue to counter some of the problems posed by the high tuition fees regime in England.

The policy pursued by England, Wales and Northern Ireland in raising tuition fees for university students to as much as £9000 per annum has had repercussions on higher education not only in Scotland but in a number of EU countries. For example, the number of British students, primarily from England, applying to Trinity College in Ireland increased by 20% to nearly 2,000 in 2012, and to University College Dublin by 37%. At the University of Groningen in the Netherlands, where many courses are taught entirely in English, British applicants have increased by a factor of four between 2010 and 2012. (Guardian, 17th August, 2012).

In Scotland, the Scottish government pursues a no-tuition fees policy for undergraduates. Under EU rules, undergraduates from other member states must be treated in the same way as home students; therefore EU undergraduates studying in Scotland also pay no tuition fees. An anomaly is that undergraduates from other parts of the UK can be charged tuition fees, since this is internal to the UK. Interestingly, a similar situation occurs in Germany where for some Länder the student has to be domiciled in the same Länder as the university in order to avoid tuition fees.

Since the introduction of the new higher tuition fees in England, the number of EU applicants to English universities fell by 16.5% between 2011 and 2012, and that to Scottish universities has risen considerably. Scottish universities received 17,787 applications from the EU by the January 2013 deadline, compared to just 5941 in 2008. As regards actual enrolments, the number of EU undergraduates enrolled in Scottish universities rose by 9,850 between 2011 and 2012, while the number of UK undergraduates fell by 1,260. In contrast, while data is patchy, it appears that the number of Scottish undergraduates studying in other European countries is small.

A direct result of the rise in European applicants is more pressure being put on public expenditure resources in Scotland, most of which come in the form of a Block Grant through the Barnett formula: and this pressure will continue as long as the host European country bears the cost of educating students from other countries and there is an imbalance in flows. As more resources go towards the education of undergraduates from other EU countries less is available for other domestic needs.

Clearly, this problem of imbalance in student flows is not unique to Scotland. Following an agreement of 1996, Sweden, Denmark, Finland, Norway and Iceland transfer payments among themselves for the training of students from each other’s country. Governments reimburse just over £2,500 per student each year to other Nordic countries training that student. While this is far from the full cost, it is a recognition that training students from the other countries in the group is not the sole responsibility of the host country. More generally, a number of countries, including Scotland, have raised with the EU the question of meeting the costs of training students from other EU countries. Both Austria and the Netherlands are debating how other EU countries, particularly Germany, might reimburse them for hosting large numbers of their students. The response by the education commissioner is that the host country which is meeting the costs also benefits in terms of “They rent rooms, they buy food, they drink the occasional pint, they read books and they take the occasional airplane. So we know it’s not a case of EU students coming in and then getting a free ride.”

However, the response of EU students to the tuition fee policy of England shows that one country can seriously reduce its commitment to funding other EU country students while, at the same time, effectively through price, encouraging its own students to look for their education abroad and to be funded in so doing by other EU host countries. Given this, it is not surprising that there is an increasing view that if member states want to improve EU student mobility then there needs to be a proper financial solution based on reciprocity.

So what are the tuition fees policies for undergraduate courses at higher education institutions in different European countries? Relevant information is shown in the table below. Fees, however, are only one part of the financial package to be considered, so, in addition to information on fees, the table also shows whether there are any other charges, whether grants and loans are available, and whether support is given via tax benefits or family allowances for students in higher education. Data is given for nineteen countries/areas, covering 17 countries, but distinguishing each part of Belgium, and Scotland from the rest of the UK. In general, rates are for 2011-12.

(Source: Modernisation of Higher Education in Europe: Funding and the Social Dimension, 2011. European Commission.

Note that further information can be obtained from this source: the figures in the above table have been updated where appropriate. There is of course the possibility that some rates will have changed since last publication.)

Reading from the table, we can see that of the nineteen areas, eleven have a no tuition fees policy. Of the remaining eight, the highest charge by a considerable margin is other UK. Next is the Czech Republic at €1000 per semester followed by the Netherlands at € 1,670 per annum.

Eight of the areas charge an administration fee. These are mostly small, and a number of them are levies to help with student’s union activities. However, in Ireland, the administration fee, which entitles students to take exams and covers some other services, is substantial at €2250 per annum. Students who are approved for a maintenance grant have their registration fee paid as part of their grant. As a result, 43% of Irish students have their admin charge paid for them. Individual universities can also charge a further small levy. As the administration fee is universal to all students in the home country, EU students also have to pay it.

The support through family allowance payments and tax relief varies from country to country, and can be significant. For example in French speaking Belgium, the parents of a student are eligible for tax benefits, dependent on the number of children in the home. The tax-free minimum earnings threshold is increased by €1,370 for one, €3,520 for two, €7,880 for three, €12,750 for four and a further €4,870 for each subsequent child. There are also family allowances going to the parents from €86.77/month depend on the number of children.

Some countries offer other benefits to students studying in their country. For example, in Norway, where state higher education is free, the admin fee covers the purchase of a student card which grants reduced fares on public transport. Home students have the right to health care.

And some other countries are extremely generous in providing support to foreign students. For example, in 2011, Germany provided scholarships to almost 34,000 other EU national students for study in Germany.

Overall, relative to the rest of the UK, fee levels are fairly low across Europe. Those countries which do charge fees also tend to provide support by some or all of grants, tax benefits, and family allowances.

So what can the above tell us about possible strategies that Scotland might adopt?

It is clear from the above that there is a large group of European countries that charge some form of fees, but also provide needs support. Scotland would therefore not be moving out on a limb if it were to join this group of countries by charging a moderate fee. This would not necessarily mean Scotland abandoning its policy of no fees for domestic students. Scotland could charge either a tuition fee, or an administration fee, but through grants reimburse these for domestic students. This would have two beneficial effects. First, fees paid by other European students would make a contribution to their education in Scotland: and the fact that there was a fee might help to moderate the increased inflow of European students arising from the high fee charges of England. We, in fact, suggested this approach to the Scottish government exactly two years ago. The civil service are still thinking about it.

Second, it would clearly be beneficial if Scotland could join in the arrangement which, as noted above, is currently in place among Nordic countries to allow a certain degree of reimbursement of the costs associated with inter country student flows. Scotland should pursue whether it could join this arrangement.

Thirdly, Scotland should work with other EU countries to lobby for the adoption of an EU-wide reimbursement system that would see administrations paying for the cost of educating their own students, no matter where they study within the European Union. This would be a simple financial solution and should be neutral therefore in a student’s decision as to where to study. The Nordic countries, Austria and the Netherlands are already in favour of this kind of arrangement.

However, looking at the table brings home major implications about the policy levers Scotland has, and the unsatisfactory nature of the current UK constitutional set-up. Here we are in a kind of federation with a much larger partner, who has made the unilateral decision to move to an extreme position on tuition fees. This is having major knock-on effects on Scotland. If we look at European practice, we see that countries typically use a variety of tools, including grants, tax relief, and family allowances, and a small use of loans, when they are setting their systems of student fees and associated reliefs. Scotland unfortunately does not have anything like this full range of tools to use to combat the difficult situation we find ourselves in. Two of the tools used elsewhere, tax relief and family allowances, fall within the group of reserved powers which are under the control of Westminster and not Scotland. Further, it is even possible that, were Scotland to succeed in negotiating transfer payments with the Nordic countries, then the Treasury might play awkward, and insist that any income is netted off from the Block Grant, so negating any benefit. (This might seem far fetched – but this is exactly what the Treasury did with European Structural funds over the long period up to 2006.)

So we are in a doubly disadvantaged situation where the dominant partner in the “UK federation” has taken a unilateral decision which grossly disadvantages us, and at the same time we do not have the range of powers to respond which are available to other countries. This anomalous constitutional position really needs to be sorted out: this is no equal partnership of nations in the current UK union.

Finally, it is ironic that, while the Scottish position on tuition fees is close to the mainstream European position, and the English position is a gross outlier, nevertheless, the way the situation is presented in the media is as if the Scots were the spendthrift exceptions to the English norm. This is a stark demonstration of the anglocentric mindset of the media – shamefully not just the London based media, but also most of the Scottish press and broadcasters.