18 OCT 2017
Thank you very much for taking the time to email me about student funding and tuition fees.
I understand your concern on this matter and I appreciate that the fees and debt accrued can seem intimidating, however the system operates in effect much like a time-limited graduate tax. Continuing with the previous system was not possible given the huge increase in the numbers of students going on to university, especially as it meant that those who did not go to university were, in effect, subsidising those who did through their taxes.
The current system supports and enables those from low income families to continue their education with no up-front costs. The evidence is that a greater proportion of students have been attending university from low income families than under the previous system. You may wish to look at the following information from Full Fact on this topic.
I do feel that as the fees for these institutions rise, there should be greater accountability for what they actually provide students alongside more scrutiny of the pay of chancellors, but their remuneration is not set by the government.
Repayments of student loans only start once a graduate earns above £21,000 and payments are linked to income. As such, if you do not economically benefit from your degree then in essence you will not have to pay for it and the loans are written off after a fixed period.
I take your point that those from low income families will graduate with higher levels of debt because their families will not be able to subsidise their living expenses but this was always the case, even under the previous system, where grants did not meet the actual cost of living at university.
I do share your concern about the level of interest rates that are in place on student loans and I am glad that this is something the government is looking at. I have urged ministers to support a reduction in the rates and will be keeping an eye on developments in this area.
I hope the following information on this topic from the Department for Education is of interest:
No-one with ambition and ability, whatever their background and family income, should come up against barriers to accessing higher education. The number of students in higher education has exceeded half a million for the first time and more students from disadvantaged backgrounds are going to university than ever before. This is fantastic news and shows the reforms are working as students understand they do not have to pay up front to go to university.
The new system of student finance is more progressive than the one it replaced. Not only do students not pay a penny up front for their tuition but graduates will only pay back their loans once they earn more than £21,000. This threshold will be increased from £21,000 to £25,000 in April 2018,and will be adjusted in line with average income thereafter. Monthly repayments will be lower than under the old system.
Basing university funding on student fees and loans was a tough decision but avoided the situation where universities would have simply faced cuts which would have led to reduced student numbers. The cap on university places has been removed meaning there is no arbitrary ceiling and tens of thousands more can access higher education.
The reforms and new funding methodology have ensured that institutions are investing significantly in widening student access to higher education. As part of their access agreements higher education institutions plan by 2018/19 to increase their spending on outreach, student success and student financial support measures to £735 million, up from £444 million in 2011/12.
The Prime Minister's commitment to increasing diversity in our higher education system and giving students better value for money, and the promise to look again at the question of funding and student finance is encouraging. Immediate action is also being taken to help graduates. Tuition fees will be frozen at their current level and the planned rise with inflation will be scrapped while the system is being reviewed.
Back to all posts