Lately, a fierce debate has raged about AC Grayling’s proposed New College of the Humanities: a college in the heart of London that will charge its students £18,000 per year. For that, they’ll be taught by some of the world’s academic superstars – including Grayling himself, Richard Dawkins, Niall Ferguson and David Cannadine. For a while now, we’ve been blogging that fee increases could push UK universities towards an American-style funding model. Grayling’s “university” has forced the issue even sooner than we thought. Because although it’s being described in some quarters as “Oxbridge on Thames”, it actually has far more in common with America’s private liberal arts colleges: institutions that attract students through famous teachers and luxurious surroundings.

The fees are, at first glance, eye watering. And the announcement has sent some commentators into apoplectic fits. Passions are running so high that Grayling was even the victim of a smoke bomb attack during an event at Foyles Bookshop in London.

But now that the smoke has cleared, everyone has started to settle down and examine what the college really represents for the UK’s higher education sector. The most common criticism of Grayling’s college is that, at eighteen grand a year, its degrees will be luxury items for the wealthy. Of course that’s possible. But what Grayling’s college really does is turn the spotlight on fee increases in the UK. Because is there really such a difference between £9,000 and £18,000? Obviously there is. But even at nine grand a year, students are facing pretty massive debts. So Grayling and his celebrity line-up pose a “you get what you pay for” challenge to other universities. With the others, they seem to be saying, you might get patchy teaching from people who aren’t really at the top of their game. With us, you pay more but you get the best of the best. It’s like choosing between a new Ford Focus and a new Mercedes. Both of them are perfectly good cars – but you inevitably expect more from one than you do from the other.

The question of student diversity at the college is an important one. At South Street, we’ve known for a long time that having people from different backgrounds in our properties can make a huge difference to each student’s time at university. We also know that we have to deliver value for money – because our students can take their business elsewhere if they want to. Interestingly, this isn’t about £9,000 fees, or even £18,000 fees for that matter. Ever since top-up fees were introduced students have expected more – and rightly so. The demands of our “customers” have made us a better provider – helping us to deliver outstanding accommodation for the right price, while still making a profit for our investors. We’ve proved that a great student experience and a profit margin don’t have to be mutually exclusive. It looks like Grayling and his investors are about to put that idea to the test too.

Related posts:

1. Survey reveals rising cost of university is biggest student concern
2. International students – an important segment of the higher education market
3. Getting the value out of higher education.
4. The Browne Review: What do higher tuition fees mean for accommodation providers?
5. Tuition fees: Could the UK really be facing its own brain drain?