Following in Ben Franklin's footsteps. Many US students take degrees from Britain's prestigious universities

WHEN American patriot Benjamin Franklin came to this medieval Scottish town more than two centuries ago, he started a tradition that today embarrasses the government of Margaret Thatcher: He took a degree from the University of St. Andrews. Since that autumn day in 1759 when Franklin knelt before the principal to receive his honorary doctorate, hundreds of Americans have taken degrees from this ancient university on the shore of the North Sea - the third-oldest seat of higher learning in Britain.

What started as a trickle with the man who invented bifocals has since become a steady stream. Thanks to an ambitious recruitment program launched in 1981, the University of St. Andrews today has 270 American students in the faculty of arts alone, making up about one-sixth of the faculty's student population.

Call it the ``Ben Franklin factor.'' It's a prime example of how the Thatcher revolution has changed the face of British universities over the past eight years.

The University of St. Andrews's recruitment drive for American students - and their American dollars - is the product of a basic Thatchernomic equation: Reduce national funding to institutions, and the institutions will find alternative sources of income.

Eager to cut the costs of higher education, the Thatcher government cut grants to universities by 17 percent in 1981. At the same time, it sharply reduced the number of British students that each university was allowed to accept each year.

``What happened,'' explains D.A. Bullough, dean of St. Andrews's faculty of arts, ``was that the government, by an unusual piece of interventionism, set an absolute maximum of the student population of [British] students - which is a way of cutting back expenditures.''

British universities are neither public nor private in the American sense. They are autonomous schools that receive two-thirds of their income from direct government grants or from student fees paid by the state. So the cutback on home-based students soon forced many universities to reduce their faculties.

It sent universities scrambling to make administrative savings and initiate early-retirement programs for their teaching staffs. As the university's principal J.Steven Watson notes, St. Andrews has been obliged to close its archaeology department and to begin phasing out its music department, moves that the national University Grants Committee (UGC) recommended in 1981.

Other universities refused to make any cuts - and now face huge debts. As the Economist noted recently, University College, Cardiff, has run up a debt of 4.5 million ($7.2 million), which a firm of accountants, Price Waterhouse, says could double or nearly triple by 1990.

Then came the second blow, which fell last year when the UGC changed its formula for distributing national funds to the universities. Like the pistol shot that starts a 100-yard dash, this UGC shift sparked a nationwide race to find alternative funding. It sent Oxford's vice-chancellor on a fund-raising tour among the university's wealthy American alumni. It encouraged the University of Surrey to sell a long lease on part of its valuable real estate. It led other universities to follow St. Andrews's example.

The Thatcher equation provided a remedy to the fiscal dilemma that the cutbacks created - a remedy that St. Andrews's Dr. Bullough soon latched onto. The same 1981 policy shift that reduced the number of home-based students at the universities also raised the tuition fees charged to overseas students - 3,310 [$5,263] for liberal arts majors; but it did not limit the number of overseas students that each university could accept.

``Nothing could stop us,'' says Bullough, from ``going beyond these numbers so long as they weren't home-based.''

Bullough approached the problem with all the drive one would expect from an advocate of Thatchernomics - even though he himself is a Liberal. Over the objections of his colleagues, Bullough launched a recruitment drive that each year sends faculty members on a marketing blitz of elite prep schools in the United States. To graduating seniors at schools such as Phillips Exeter in New Hampshire, the St. Andrews ``Direct Entry'' scheme offers a chance to enter the British university system without first completing a year at an American university.

The plan paid off: ``For the first time this year,'' says Bullough, ``the fees [tuition] alone in the faculty of arts alone will be 1.1 million [$1.75 million]. Our university budget is only 16 million.''

What more could good Thatcherites ask for? A place for their son or daughter at a tradition-steeped school like St. Andrews, that's what. Every year, Bullough receives complaints from angry Tory parents.

``For the present government, it's very embarrassing,'' he says. ``On the one hand, it fits with Thatcherite private enterprise. On the other, it's Tory parents who say, `Why is it that my children can't get into universities of my choice ... but when my friends' children go, they find there are 200 American students?'''

The resentment felt toward American students is hardly limited to St. Andrews. The easy access of Americans to Britain's universities is clearly ironic, given the fact that young Britons have far fewer educational opportunities than do their American contemporaries. Only 13.7 percent of all 18-year-old Britons entered university programs in 1983. In the US that year, 32.5 percent of all recent high school graduates went on to universities.

``It's a delicate issue,'' said John Weston of the British Council's higher education division when asked about these figures. ``There's been a lot of pressure recently to expand the enrollment base of our home students. But the counterpressure seems to have prevailed.''

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