Peter Ainsworth: Funding Higher Education Through a Free-Market Graduate Tax
Updated: Jan 21
On Wednesday 10 June 2015, Peter Ainsworth, Managing Director of EM Applications, spoke to the Oxford Hayek Society at Christ Church on the subject of: 'Funding Higher Education Through a Free-Market Graduate Tax'. The event was cohosted by the Oxford PPE Society.
You can find a Youtube video of Peter's talk below.
In a recent paper published by the Institute of Economic Affairs, Peter argued that the current tuition fee system in Britain produces misincentives for universities, is expensive to run and is regressive. Instead, he proposed that students should be able to enter private contracts with universities, rather than the state, with flexible negotiations on the terms of tuition fee repayment.
This would increase the incentives for universities to offer degrees that lead to employment, ensuring that universities are value-for-money and that universities offering 'rotten degrees' become financially-unviable. Meanwhile, the main benefactors of education - the graduates themselves - would incur the cost of the education they receive, rather than the state, through repaying the university a part of their graduate premium in wages. This would make for a more efficient and more progressive way of funding higher education.
Update: In October 2019, Peter won the £50,000 IEA Breakthrough Prize alongside Dr. Tom McKenzie for their essay on a single policy to increase the opportunity for merit-based success. They devised a policy, named EDegg, that would rearrange the flows of money such that universities lend directly to their students, sharing the risk of non-repayment to incentivise universities to improve graduate career prospects. Read the prize-winning essay here.
Peter Ainsworth is the Managing Director of EM Applications, a software and consulting firm that assists investors worldwide to understand and navigate market risk and uncertainty. He was previously Head of Product Development at Investec Asset Management and Manager of Quantitative Marketing at Drexel Burnham Lambert.