College Education Concerns in the 21st Century
(c) M. Ryder

In September 2007, when London student Tom Hart was 17, he had to make a tough decision with potentially lifelong ramifications: which degree program (major) to study at college.

"I found it quite difficult, to be honest," admits Hart, who opted for philosophy/sociology.

But the next step -- the actual applying to five different universities -- well, that was a breeze. That's because, like every other college-bound British student, Hart used the United Kingdom's universal clearinghouse, the Universities and Colleges Admissions Service.

It took only 25 minutes to click through the online, standardized form and send it off to five schools at once, along with his personal statement.

"It was really easy to use. It's brilliant," Hart says.

UCAS was set up more than 40 years ago by the U.K. higher-education institutions themselves to simplify the undergraduate admissions process and reduce paperwork. Every accredited school here is part of the system, making it essentially compulsory. "It's a really impressive institutional innovation," says Sarah Turner, an economist at the University of Virginia. Fairer, too. Because students fill out only one application, and because it limits the total number of colleges to which they can apply to five, "transaction costs" are reduced, which puts all students on an equal footing, regardless of how wealthy or poor they are. It's a good idea, a much-praised system that perhaps the United States should consider adopting.

American higher education borrowing an idea from overseas? Isn't that heresy, since the U.S. system is -- with all its faults -- still widely considered the gold standard by many foreign academics and students? Well, while clearly many foreign models won't work in the States -- free tuition, anyone? -- there are some practices, mainly cherry-picked from Britain, that would be welcome additions: a less punishing student loan program; more encouragement for students to follow the British tradition of taking a "gap year" break before starting college; and, of course, a central admissions process, like UCAS.

UCAS makes things easier for students in other ways, too. Its website is crammed with information about, and entry requirements for, every degree program at every school, which greatly simplifies the research students must do to make informed choices. The process starts in September, and all applications must be filed by January 15. The fee for applying to five schools is approximately $35. By late March, students will have learned which, if any, of the five schools has accepted them. Offers are typically contingent on students' receiving certain grades on their A-Level exams. A-Levels are a set of course-based tests (usually three) students take at the end of their last year of secondary school.

If several universities send them offers, students then make a "firm" choice, usually the school with the most rigorous entrance requirement, and an "insurance" choice. For example, all five schools Hart applied to accepted him. So his first choice -- and where he starts this fall -- was the University of Bristol, which required him to get three A's in his A-Levels. His backup choice was the University of Leeds, which required only one A and two B's.

Students who don't receive initial offers or who fail to meet A-Level requirements aren't without hope. UCAS also has a "clearing" system that helps most students find schools that will accept them. Around 75 percent of all applicants find a place. Of those who don't, about 80 percent are accepted the following year.

The universities claim UCAS greatly reduces admissions headaches because it gives them a much clearer picture of the number of incoming students to expect. Says Jon Beard, director of undergraduate recruitment at the University of Cambridge: "A student cannot elect to go, or be enticed, to University B if they have committed through the system to University A." UCAS also provides schools with useful, national statistical trends, like which majors are growing or falling in popularity.

Once accepted, students have to think about paying for the next three to four years. That's not a fun prospect. Nevertheless, the British state-funded system is fairly risk free and places a less onerous financial burden on economically disadvantaged students. "Unlike the U.S., students here don't have that debt around their necks all their lives," says Anna Vignoles, an education and skills expert at the London School of Economics.

Here's why: Repayments are income contingent. Graduates don't repay a cent until they're earning at least $24,750 a year; they then pay 9 percent of whatever they earn over that amount, and it's a simple payroll deduction, like income tax or Social Security. Graduates whose earnings never hit that threshold, or those who temporarily lose their incomes, don't pay. After 25 years, any amount still owed is forgiven. English schools can charge a top tuition of $5,320 a year -- and most do. So any student, regardless of parental income, can borrow up to that amount.

Students can also take out cost-of-living, or maintenance, loans, which are repaid in the same way. The top amount they can borrow, if they're living in London and away from home, is $11,431 a year. Maintenance loans are, however, means-tested. If their household income is more than $83,784, the amount students can borrow is reduced, depending on how much more their parents earn.

Interest rates on student loans are equal to the rate of inflation. However, another LSE economist, Nicholas Barr, argues that's too low.

There are some signs that the United States could be moving toward this model. This summer, the Department of Education enacted an income-based repayment program for student loan debtors. Those who use the program can cut their federal loan debts to less than 15 percent of their income. The federal government also has enacted a loan forgiveness program for those who pursue public-service careers. They can have their federal loan debt wiped clear after 120 payments (or 10 years).

For many students, these programs should offer welcome relief. But there still is some ground to cover before the American student loan program matches its British peer. Barr says that an income-contingent repayment plan in the States should charge the same rate it costs the government to borrow the money. A real interest rate that's essentially zero, Barr says, puts too much fiscal pressure on government finances, resulting in student loans that are typically too small -- which reduces access to higher education because many disadvantaged students need larger sums to truly cover expenses. Bigger loans with slightly steeper interest rates won't punish poorer students, Barr says, because they're protected by the income-contingent payback scheme and, in the United Kingdom, a 25-year forgiveness limit. The American income-based program offers some interest rate benefits once payments begin but still charges an interest rate (this year, it's 7.1 percent).

Taking a break. OK, once students know which college they're attending and how they'll pay for it, what's next? How about a year off? The British are the world leaders in taking so-called gap-year breaks. Around 230,000 British 18-year-olds take one each year. Tom Griffiths, founder of Gapyear.com, reckons that around 15 percent of college-bound students defer their studies for a year to . . . well, to do what? Some work to shore up their finances. Some head overseas as volunteers for various charities. Others "road test" potential careers by getting a "gofer" job in their industry of choice. "But the vast majority just backpack around the world," Griffiths says.

Many also mix and match their options. Tom Hart, for example, spent the first seven months of his gap year working in a pub to earn money for a three-month trip to Southeast Asia. He and best friend Theo Ford then tramped through Vietnam, Cambodia, Laos, and Thailand. Hart's home now, back at the pub, working to earn extra money for spending once he's at college.

To many American parents, the notion of a gap year might seem like 12 months wasted, goofing off. But many educators claim that students who take a gap year often excel in college. "They do a lot of growing up in that year, and they have a greater sense of what they want to do when they get here," says Angela Milln, director of student recruitment at Bristol. And, adds Cambridge's Beard, "some gap years can actively reinforce a candidate's application." For instance, time spent doing volunteer work overseas could bolster the chances of a student's studying geography or anthropology.

Gap years are gaining traction in the United States. American users on Gapyear.com have grown from less than a percent to 10 percent. Princeton University this fall launches its own "bridge year" program: Twenty incoming freshmen will spend a year doing social-service work in a developing country before taking any classes. Harvard College has for 30 years now recommended that incoming students take a gap year before commencing studies, and every year about 50 to 70 freshmen heed that advice.

Hart certainly thinks his experiences in Asia and working in a pub will give him a leg up once he's at Bristol. "I think you come across as more mature, and you're more used to living on your own," he says. Moreover, Hart's convinced that the gap year greatly bolstered his self-confidence, so college now seems much less daunting. And that's the kind of can-do attitude that should also play well in America.

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(c) 2009 U.S. News & World Report