Crisis triggers HE neoliberalism

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20 maart 2012 | The economic crisis gave rise to a new wave of neoliberal policies in HE, Vangelis Tsiligiris argues. Financing burdens are shifted from governments to students, university managerialism increased. Meanwhile, the 'knowledge economy' is yet to provide its promise to many unemployed graduates.

Vangelis Tsiligiris is cross-border expert andGreek College Principal. Recently, he analyzed reforms in Greek HE and how they wereaccelerated by the economic crisis. Now, he takes a global viewdescribing the rise of neoliberalism in global HE policies. Hewrites:

“Higher education has been placed at the centre of public debateas a result of the 2008 financial collapse and the ongoing economiccrisis. The main thrust of this debate centres around arejustification of the role of higher education and a redefinitionof its funding relationship with government.

Nevertheless, most of the discussion fails to mention theimpact of the economic crisis on higher education. To me, this isimportant because the economic crisis has changed higher educationat both the micro and macro levels. 

The immediate shorter-term impact of the economic crisishas been at the institutional micro level. Lower student numbers oncertain programmes – the most expensive ones and those with lowerjob prospects – has led senior managers in universities to preparefor the worst by making plans to reduce staff at all levels andrationalise their portfolio of programmes.

To me, this is a cyclical problem and is not new in highereducation.

Rationalisation of higher education

What I think is more important is the longer-term impact of theeconomic crisis on higher education macro planning and policy. Theeconomic crisis has legitimised the long-existing argument thathigher education should be treated the same as any other service inthe economy and, as such, should be subject to ever-moreaccountability and managerialist practices.

It is important to note that all this has come about in a periodwhen financial neo-liberalism has dominated policy-makingglobally.

As a result, higher education policy has entered a phaseof extreme rationalisation with an emphasis on ‘cutting the excessfat’ and ‘balancing the budget’. One may argue that this is alsonot a new development. However, what is new is a consensus amonggovernments, at least in the co-called developed countries, thatprioritises fiscal rationality as a result of fear about publicdebt problems.

Shifting financial burden from government tostudents

It seems to me that the economic crisis has created aneo-liberal policy and management framework in higher educationthat has resulted in moves to shift the financial burden for highereducation from governments to students and theirfamilies.

So increasingly we see governments attempting to turndirect funding and public debt into indirect funding via studentloans and private debt.

This transformation serves the macroeconomic objectives ofgovernments and legitimises talk about students getting ‘value formoney’ and a ‘return on their investment’ in a ‘serviceprovider-customer’ model of higher education. 

As a result, higher education institutions now have topursue plans to create alternative streams of income moreaggressively, while imposing severe cuts on their provision bycutting academic programmes that are not competitive.

Role of transnational satelliteuniversities 

At the same time, globally, higher education institutionscompete more fiercely than ever before to recruit internationalstudents and pursue more aggressive transnational educationactivities.

In my opinion, the economic crisis will cement thetransformation of traditional destination countries forinternational students to exporters of transnational highereducation services. 

This is already happening. In 2011 the number of studentsstudying abroad on a UK higher education programme offered bytransnational partnerships was greater than the number ofinternational students studying in the UK.

Increasingly, countries like the UK consider transnationalhigher education to be a more profitable and less risky – in termsof immigration issues – alternative to international studentmobility.

Barriers to internationalisation

Also, students in source countries consider internationalmobility less and less attractive. The reason for this istwofold.

First, there are increasing costs – tuition fees andliving expenses – along with stricter immigration rules intraditional destination countries. These are discouraginginternational students from going abroad.

Second, the growth of transnational higher educationproviders in the source countries of international students,coupled with a wider acceptance of transnational provision as arecognised form of higher education, has made it moreattractive.

Greek HE to suffer even more from crisis

For countries with longstanding structural problems intheir higher education systems – for example, Greece – the impactof the economic crisis will be more severe. These countries haveeither completely abandoned alternative providers of highereducation (that is, transnational higher education partnerships) orleft them completely unregulated.

Abandoning alternative providers has reduced the availablechoices for domestic students who want to study without goingabroad – and, as we have seen above, going abroad is nowproblematic, for a number of reasons.

Lack of regulation leads to problems of consumerprotection and creates significant risks for foreign universitypartners engaged in these unregulated transnational highereducation activities.

Student unemployment unsustainable

Finally, another issue both governments and highereducation have failed to address is unemployment. The economiccrisis has driven the unemployment rate of young graduates to itshighest peak in years.

The global economy is promoted as being a ‘knowledgeeconomy’, which is used to justify ongoing attempts to increaseparticipation rates in higher education. However, there is growingscepticism about the capacity of the global economy to createenough jobs for graduates. 

So what does the future hold for higher education? In arecent online discussion in which I took part, I wrote: “Allow meto argue, wearing my economist’s hat, that higher education will beshaped by the pursuit of monetary objectives (low inflation,balanced budgets, reduction in expenditure on ‘publicgoods’)…

“If governments continue to move away from the ‘highereducation as public good’ approach, higher education will continueto become more marketised and less research focused.”

Thus, it seems to me that the future of higher educationhas been handed over to economists and is now less about highereducation as such and more about the political economy.”

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