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This briefing paper was last published in June 2018 and will no longer be updated. For more recent information see the papers Higher Education Funding in England and Student Loan Statistics

Higher education funding and student support has been through decades of change and reform. Most of the changes in the student finance system have been made in response to various funding pressures.

Higher education tuition fees of £1,000 per year were first introduced by the Labour Government in 1998. These fees were paid upfront by students at the start of the academic year. In 2006 fees were raised to £3,000 and a new system of variable deferred fees and tuition fees loans was introduced.

From 2006 fees rose gradually by inflation until 2012 when, under the Coalition Government, tuition fees were raised to £9,000 per year following an independent review of the student finance system by Lord Browne. The student finance reforms at this time also included raising the repayment threshold to £21,000 and introducing a variable tiered rate of interest on student loans.

A report by the Institute for Fiscal Studies (IFS) in July 2017 Higher Education funding in England: past, present and options for the future summarised the trends in fee rises and university income:

Each of these increases resulted in a sudden boost to university income, followed by subsequent flatlining or declines in funding. This has resulted in extremely high variation in funding per student over the past 30 years, which is unlikely to be optimal. However, it should be noted that the general trend is upwards, and that university funding per student is currently at the highest level it has ever been in the last 30 years.

OECD figures have shown that average fee levels for new students in England from 2012 were likely to be the highest for public or state-dependent private institutions in the developed world.

Since 2012 there have been further changes to student finance such as the abolition of maintenance grants and NHS bursaries which have moved student support increasingly away from non-repayable grants and towards loans.

The combined effect of these changes has been to increase student debt – the Institute for Fiscal Studies has calculated that students from the poorest backgrounds will accrue debts of £57,000 from a three-year degree.

In the 2017 General Election the Labour Party manifesto included a commitment to abolish tuition fees and to restore maintenance grants. This proposal proved popular among young voters.

There are currently three parliamentary inquiries scrutinising higher education funding and tuition fees and in October 2017 the Prime Minister announced that there would be a review of the student finance system. On 27 November 2017 there will be a debate on an E petition calling for tuition fees to be lowered to £3,000 per year.

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