The Dutch government is set to switch from publicly financed higher education
towards a student loan system. Vangelis Tsiligiris, cross-border expert and
Greek College Principal, put this development into a European
perspective following up on his recent essay describing how the
crisis triggered a new wave of neoliberal HE
policies.
From debt crisis to identity crisis
With the turmoil created by the Eurocrisis, it is becoming ever
more evident that higher education is closely associatedwith
macroeconomic policymaking which has been severely affected by the
on-going global recession.
What is more: the situation in EU has transformed into an
"identity crisis" where the different member countries compete to
prove that they are not associated with those states that are
commonly referred to as the P.I.G.S. For quite a few years now the
debt crisis was considered a 'bug' of the south. However, it is now
becoming obvious what several prominent economists were arguing
since the beginning of the crisis, that the crisis in Europe is a
systemic crisis which should be dealt in a coherent manner at a
central economic policymaking level.
Selective monetarism legitimizes harsh austerity
measures
Unfortunately, the EU has proven to be extremely bureaucratic
and conservative in dealing with the debt crisis. At the heart of
this is the long-existing cultural divide between the north and
south of EU countries which was hidden until recently.
Additionally, the debt crisis has coincided with the rise of
neo-liberalism in Europe and elsewhere. Its advocates have blamed
government intervention and public spending for the global
recession calling for rationalisation of fiscal policies and use of
monetary policy to restore competitiveness.
This mentality shift was also accompanied by calls for
"selective monetarism" which supports devaluating currencies in
debt-ridden countries like Greece while at the same time
selectively increasing the money supply in the intra-banking
markets. Unfortunately, this has also legitimised severe austerity
measures in EU countries. In the past, the IMF used those under the
title of Structural Adjustment Policies with only limited success.
These austerity measures and developments at macroeconomic level
directly impact the higher education policies in European member
states.
Graduate unemployment and degree
massification
In the UK and other EU countries it becomes clear now that
replacing direct government funding in higher education with
student loans is an effort to transform public debt into private
debt. This falls under a more general policy by European
governments to reduce or eliminate public deficit and foster fiscal
consolidation. Thus, higher education policy has entered a phase of
"macroeconomic influence" and increasingly academic objectives are
being misplaced by financial indicators.
At the same time, two additional developments will have sweeping
consequences for European higher education.
First of all, unemployment of young graduates is reaching
record-high rates. Unfortunately, the contemporary globalised
economy has not appropriately addressed the issue of employment. In
the EU and elsewhere, the prevailing understanding of
competitiveness today is increasingly associated with lower minimum
wages and flexible labour conditions, something which stands in
stark contrast to the objective of governments to widen
participation in higher education and training a better-educated
workforce. This becomes particularly problematic and ethically
questionable if you also take into account the increased financial
burden on students and their families. Thus, even within the
current rational financial context of analysis, higher education
appears to have a declining return on investment (ROI) for students
and their families.
Second, the inflation of qualifications has shifted upwards
standards in the labour market following the increase in the number
and nature of providers along with the booming demand and
participation rates in higher education. Undergraduate degrees are
transformed into standard qualifications taking the place of
vocational training diplomas. This devaluation of undergraduate and
postgraduate qualifications in the employment market has to be
considered when governments want to integrated graduates into the
economy.
Unbalanced budget no longer a phenomenon of the
south
The above two factors are creating a situation where higher
education institutions are placed in the middle of a crossroad
without a definite choice of directions.
The recent break-up of the Dutch coalition government marks the
beginning of the end of a period where public debt and fiscal
imbalances were characteristics of the south. Sooner or later,
Europeans should have to deal with the real problem of cyclical
imbalances between member states. An appropriate instrument for
this, e.g. Eurobonds, has to be chosen to respond to this.
Only if macroeconomic problems are dealt with in a comprehensive
and effective manner, higher education institutions are able to
focus on responding adequately to the challenges created by the
massification of higher education.