The tuition fees review is expected to report back to the government this month. This follows Prime Minister Theresa May’s announcement of a major review of university fees back in February. All political parties agree that reform is needed, but – before setting out the potential reforms – let’s take a look at the current system and why it needs changing.
In the current system:
- Public universities are able to charge a maximum annual tuition fee of £9,250
- Private universities, which depend entirely on students for their income, are not subject to the same fee cap and can charge much more
- Students at public universities do not need to pay tuition up front, and can borrow money towards their studies
- Students at private universities can also apply for tuition fee loans, but the loan is less likely to cover the full amount
- Students at both public and private universities can also apply for a loan that covers living costs
- How much a student has to repay depends on their plan. When they’re studying, interest is added to the loan when the first payment is made. This is made up of the Retail Price Index (RPI), currently at 3.3%, plus 3%. Once they’ve left their course, interest rate depends on their income
The current system has been sharply criticised because the level of fees charged do not relate to the cost or quality of the course. It has also failed to deliver a competitive university market, where institutions offer variable tuition fees, with virtually all public universities charging the top rate of £9,250.
As a result, the Prime Minister acknowledges that students in England currently face “one of the most expensive systems of university tuition in the world”. The average debt for graduates is over £50,000, with students from the lowest income families averaging nearly £60,000.
On top of this, for many students, rent has become too expensive. It doesn’t get much easier after graduation either; opportunities for young job-hunters are often blocked by unaffordable housing.
All things consider, many are concerned that the current system is creating a generation of graduates who are struggling to make ends meet.
What are the potential reforms under review?
The review is designed to recommend reforms that will offer the best value for money for students, without forcing a loss of funding for universities.
The debate is fierce and varied, with Labour pledging to abolish tuition fees and reintroduce maintenance grants. Fees are very unlikely to be scrapped altogether, as Mrs May explained this would push up taxes and universities would have to compete for funding with schools and hospitals, but other changes are still up for grabs.
Variety of tuition fees: Damian Hinds, Secretary of State for Education, believes that different faculties should have different tuition costs, based on what you can expect to earn after university. An engineering degree, for example, would cost more than an English degree. According to the Prime Minister, however, this could inadvertently reduce the number of applicants to science subjects.
Flexible attendance: Some have called for more flexibility in how postgraduate courses are delivered, with the option of a two-year degree. This would help to reduce accommodation costs, allowing students to live at home and commute to class, or continue working while studying.
Maintenance grants: Restoring maintenance grants could help to remove barriers for poorer students, who Theresa May said should have an equal chance in higher education. Not only would this reduce levels of borrowing by students from disadvantaged backgrounds, it could also boost cultural diversity on campus.
Review of interest rates: Research from the Institute for Fiscal Studies shows students can face more than £5,000 in interest charges before leaving university. A proposal to lower the existing level of rates could be included in the review.
It is important to remember that the government hasn’t confirmed any actual changes to the system yet. That said, we are led to believe that tuition fees will be reduced, and that the reintroduction of maintenance grants will be seriously considered. For now, Mrs May has confirmed plans to freeze tuition fees for public universities for at least another year, rather than allowing them to increase due to inflation. Watch this space.