How much does teaching cost?

Most current discussions about fees and higher education funding focus on the cost and debt burden for students, the value for taxpayer, whether or not tertiary education adds value to the economy, and the financial challenges for universities related to fee stagnation.

I read a BBC article recently which covered all of these things. However, something really stood out, and that was a quote from a student: a fee rise would make her “really annoyed”, she said, “I am getting a lot of teaching – but I’m not getting £10,000-worth (i.e. £9,250-worth)”.

I agree that fees are already high, I don’t think students should be paying fees at that level, and a fee rise would make me really annoyed too, but is this student really not getting her £9,250’s worth?

I think we have an issue of perception about what things actually cost, which is exacerbating the debate because not only do people think fees are high, they also think that university is overpriced and often those frustrations are directed not at fee policy, but at the universities themselves.

But high cost and high price are not the same thing. We are regularly conflating terms, and it is affecting how we discuss and debate the issue of university fees. The cost is not the same as the price, and value is another question entirely.

Defining terms

Value relates to the worth of something, the usefulness, or whether something is important in life. It can relate to the individual, the state, wider society… the list goes on. A university education might be valuable in terms of economic gains, but it also has value in terms of how a person understands the world, interacts with it, how it changes their lives. Value is subjective. It is, to some extent, intangible. The value of a university education pervades in a way that cannot necessarily be seen or measured.

Next, to price. Price is rarely referred to in fee discussions, but it is actually what is meant in most cases. Fees are not how much a degree costs; fees are the price of a degree. Sound confusing? Well, price is the amount given in payment for something, whereas cost is how much money has been used to produce or deliver it. Not the same thing. The price of a degree is very simply £9,250 per year. That is the cost to the student. It is not how much money was used to deliver that student’s education.

So, what is the cost? Well, I tried to calculate the total cost of running my standard, 40-hour, semester-long, second year module in a science-based subject. It is more than just a back of the envelope estimation, but by no means comprehensive, and came out at £25,807 for the whole shebang:

Here, staff costs are calculated using employee costing for the university and allocated workload model hours for the module. Not including utilities (electricity, water, aircon), room costs, depreciation lab refurbishment, building costs, IT staff support costs, annual curation and management of the osteological collections.

The cost of a year, per student

Now, what if we were to scale that up to cover all six modules that a student studies each year? That would come to £154,842. But, when it comes to teaching, I’m a pretty cheap date. I use no expensive equipment, no chemicals, no field trips, and God forbid a residential field trip. As far as modules go this one is at the lower end of costings.

If I change it up to reflect a more costly module, by throwing in two field trips – relatively common in modules related to nature or biology – or substitute my callipers for microscopes, plus associated consumables and technical support, the cost comes out (not by design!) at £42,660 in both cases. Let’s say each year has three low-cost and three high-cost modules (although I would say it’s more like two low and four high) then we get £205,401. This is the cost of running a year’s worth of teaching for the class.

Now for the tricky bit, how much that teaching costs per student depends on the class size and that will vary year on year. Once calculated, we can also add on small group and individual tutorials at £510 a year per student. Table 2 gives an estimate of what the contact teaching for one student actually costs to deliver, for a range of class sizes. The final columns show what remains of their fees after this cost has been taken away.

In smaller classes, student fees are in deficit to basic teaching costs by more than £2,000, and in the “best-case” scenario there is about £3,000 remaining after teaching outlay.

Ha, ha, you cry – so some students are being overcharged for their education!

And the rest

Well… no, not really. Outside of basic teaching delivery costs, we also have to consider that students have access to a whole host of other benefits and services. Subsidised gyms, 24-hour libraries, loan laptops, free one-to-one tutoring support, a university counselling service that can get you in before the NHS referral letter from your GP has even been sent. In addition, the university has other non-student facing overheads to cover. Table 3 gives a smattering of these and I’m sure I’ve missed some. I’m not even going to attempt to cost in all that.

Factor all that in and the reality is that the student I quoted earlier probably isn’t getting £9,250 worth of education, she is probably getting a lot more. I mean, that shouldn’t really be surprising given the academic level, and that private primary school fees are now, according to The Times, on average £15,324 a year (and that’s before the new VAT changes came into play!)

Universities probably need to be better at demonstrating what a university education actually costs so that students better understand the price they are paying. This might help to shift frustrations about potential fee rises towards policy makers and the funding model,, and away from demanding universities deliver more, when they are already in financially precarious situations..