Students are not consumers

by Chalky

What’s not to love about the USA? High wages, cheap lifestyle, less taxes…

The recent launch of the Council for the Defence of British Universities has highlighted the drift of the British university model towards the more capitalistic model of higher education that rules here in the USA.

Now, don’t get me wrong, I’m all for capitalism as a means of efficiently distributing limited resources in economies. But, is it what we should base our higher education system on?

As a graduate of a British university, and a current student at a US school, I can tell you that although there are a lot of things that the UK needs to improve on, treating students as consumers is not one of them. Let me start my case with an analogy.

In a happy world outside of academia, Honest Joe Bloggs is a consumer and the supermarket is a provider. Our Joe has popped down to the shop to grab a cut of meat for tea to feed his hungry family. In this scenario, capitalism works pretty well: there are several supermarkets in Joe’s town, and their competition for his business leads to low prices and good service (with the help of a little bit of government regulation to stop false advertising and ensure basic food safety). If Walmart is too pricey or its staff are too rude, Joe can always head to Target for his rump.

All is well for some years until little Joe Jr. is all grown up and about to head off to university. Now, if Junior is the consumer and the universities are providers in a free market system, won’t their competition for the best straight A students drive down prices and ensure that they provide a great education?

Let’s look at quality of education first.

Education quality

In UK, I often felt like I would have learnt more in my lectures if they had been given by a dead fish. Worse still, some of these professors had been making the same terrible effort at teaching for years and no amount of student complaint seemed to have done anything to improve the situation. In the US, teaching evaluations play a huge role in hiring and promotion decisions at (most) universities. Not only that but universities are slowly moving towards more innovative teaching methods to enhance student learning. Sounds like treating Junior as a consumer must work.

Unfortunately there is a problem. Joe’s goal was to buy steak and the supermarket’s was to provide it. Between the two of them, they settled on a price that was acceptable to both. In contrast, the university’s goal is to provide as good an education as it can but Junior’s goal is not necessarily to benefit from this. Junior, precocious as he is, wants to land a high paying job at an investment bank, towards which an education is merely a stepping stone (he needs the high paying job to pay off the exorbitant fees that his education is incurring – more on that below).

What are the consequences of this? Junior is mainly concerned about achieving a good grade. He may be interested in macroeconomics, but he would rather take Postmodern Appreciation of South Pacific Drumming which has a reputation for being an easy A. A mutual back scratching develops and the Professor of Drumming gets a good rating on his teaching evaluation in return for Junior’s A. Junior is certainly a satisfied consumer but at what cost? The prof has every incentive to make his exams easier, and the intellectual rigour of the course to decrease. Are students complaining of hard questions requiring (heaven forbid) critical thinking skills rather than just the definitions in bold on the lecture notes? Better cut those out next year to improve the teaching evaluations.

Of course, the situation is not this bad in real life, is it? It is instructive to note that the Ivy League universities, those paragons of academic excellence, have seen the average grade increase from a C to an A, while the level of student effort in the USA has declined. Go to and most of the comments deal relate to how easy a professor’s class is (or, when a rater got a bad grade, isn’t).

Not only are professors incentivised to give more A’s in return for positive evaluations, but universities also assess professors on their economic value. If a professor has so few students take their class that their tuition doesn’t cover his/her salary, that’s another black mark.

My point is that educational quality would go up if all that students were interested in was the quality of that education. However, the universities also have to rate the students at the end of the day and this conflict of interests highlights why students do not make good consumers.

Returning our supermarket analogy, imagine a world where shops had to rate their customers! “Sorry sir, we cannot let you in to the department store as the supermarket across the road only awarded you a B when you shopped there last Tuesday.” Honest Joe would no longer be as concerned only about the price and quality of his steak, but also whether the supermarket would rate him high enough so that he could buy a pair of jeans next week.

Not only does this drive down the quality of education but US undergrads will quibble with their profs over half points (in a course graded out of 500 total) and throw a wobbler if they feel they have been unfairly “denied” a good grade. Why, you ask, aren’t British students as demanding? Don’t they care about getting a good grade just as much? The answer lies (like many things) with money.

The cost of education

As a student at a university who had the most expensive price tag in the USA until a few years ago (undergraduates currently pay $45,000 per year for tuition alone), I frequently wonder where these students get the money from. Although many get financial aid, a large number pay the full sum.

Now imagine that you are shelling out more than the average wage for your education every year. You’d be pretty unhappy with anything less than an A, wouldn’t you? You can try telling your irate students that the tuition merely entitles them to the opportunity to study and and the grade must be earnt but … you need those good teaching evaluations don’t you?

The British student is not paying is paying less for their education. Much as I hate to say this (I know many very pleasant American undergrads) there is no sense of entitlement in British students, although I expect this to change as UK fees rise. There is a feeling of being privileged that the university was gracious enough to admit you rather than you have paid to be there (poor sods: no 18-year old thinks about the higher taxes that they will be paying for the rest of their lives for that “free” education).

Now the big question: why doesn’t competition drive down the cost of US universities? Didn’t that keep the price of Honest Joe’s steak low?

Well, let’s return to Honest Joe and his tenderloin. If all the supermarkets stocked the same quality cows, then competition should drive them all down to the same low price (all other things being equal). But if one shop has better quality meat then it can charge a higher price.

Now what happens if Junior is particularly picky? He will only eat the highest quality cut. Joe is forced to spend whatever the supermarket wishes to charge. Over time, the supermarket will see him coming and quickly up the prices in the meat aisle every time that Joe’s cadillac rolls into the supermarket parking lot.

The same elitist principle applies to higher ed. Top firms want to hire graduates from the best universities, so the US private universities can keep on charging however much they want. If you don’t want to/can’t pay it, someone else will. The price of this elitist, winner-takes-all system: 40% of the Princeton graduating class landed finance jobs in 2007 for a mere $200,000.

US tuition has risen considerably faster than inflation (15% in the past two years alone). Where does that money go? The number of administrators has spiralled while faculty have increased much less (and new buildings have shot up, presumably to house all the pen pushers). The resulting rise in bureaucracy has left even less time for the real activities of the university: teaching and research. In the UK, you had to go out of your way to encounter bureaucracy. In US universities, it finds you. The purpose of all this gloss is to compete with all the other universities to attract the paying student consumers.  It’s hard for a prospective student to guess what the quality of teaching is like, but the benefits of a shiny new gymnasium are all too tangible.


Students are not consumers. Treating them as such:

  1. leads to a decline in educational standards as the demand for top grades erodes intellectual rigour
  2. leads to spiralling tuition fees at the elite universities, which are funnelled back into superficial gloss to attract more magpie-like “consumers” to continue the cycle of growth

The British system is already one of the most efficient in the world, far more so than the American one. Let’s keep it that way.

Disclaimer: this post makes some sweeping generalizations – there are better and worse students, professors and universities (and even administrators) in both countries. But I believe that the facts support the broader case that I have made.