In England the system of student finance is largely based on student loans. The number and value of loans has increased rapidly over time as the sector has expanded and loans replaced maintenance grants and much of direct funding for teaching. The expansion of loans has raised questions about graduate repayments and ultimately the cost of the system to the taxpayer.
This debate is on the e-petition: Reduce University student tuition fees from £9250 to £3000. The petition, which closed on 5 April 2021 and received 581,287 signatures, states that:
Call on the government to consider holding debates in Parliament between MPs and university students to raise/discuss issues that affect them. It will allow students to voice their opinions and concerns about tuition fees of £9250 a year which are too high, particularly as grants have been removed
The Government published its response to the e-petition on 26 January 2021.
The petition calls for tuition fees to be reduced to £3,000 a year. The last time that full time undergraduate tuition fees in England were at that level was in 2006 when provisions in the Higher Education Act 2004 were introduced which allowed higher education institutions (HEIs) to set fees up to a cap which was set in annual regulations – the Education (Student Support) Regulations 2006 set the cap for 2006/2007 academic year at £3,000.
In subsequent years tuition fee levels rose in line with inflation until 2012 when fee levels rose substantially, following recommendations in the Browne Review, to £9,000 a year. Simultaneously with the fee increase the government cut most of universities’ teaching grant for undergraduate courses.
Since the 2012 fee rises there have been many calls for tuition fee reductions – these calls have escalated in the last 18 months when teaching was mainly delivered online as a result of the Covid 19 pandemic. The Augar Review of post-18 education and funding in 2019 recommended reducing tuition fees to £7,500 a year – the government has not yet given its full response to the review.
According to the IFS Student finance calculator cutting the fee cap in England to £3,000 a year and fully compensating universities for this loss of income would:
- Cost the Government around £3.9 billion per cohort of students
- Cut average student loan debt by around £20,000 to just over £32,000. This is the size of their debt at the start of the financial year after completing their course
- Reduce average loan repayments by 26%. This is the present value of repayments which account for inflation and the Government’s cost of borrowing.
- Benefit higher earning graduates the most. The top 10% of earners would see their repayments fall by around 40%, or £26,000, in present value terms
- Be of little or no benefit to lower earning graduates. The bottom 40% of borrowers by lifetime earnings would see little or no change in their loan repayments. Only those borrowers who repay their loans in full would benefit and few in this group would repay their loans in full, even with the smaller loan debt from cutting fees.
- Benefit men more than women. Men would see repayments cut by 30% on average compared to 20% for women. This is because men earn more on average than women. More men would repay their loans in full and hence benefit from lower fee loans.
- Higher education tuition fees in England (June 2018) – a library briefing which looks at the history of tuition fee rises, discusses the rationale for the rises and their impact, gives statistics on: fee levels, fee income and funding of higher education.
- The Post-18 Education and Funding Review (the Augar Review) recommendations (May 2019) – a library briefing which discusses the Augar Review.
- Insight series: Student Finance Explained (September 2021) – a series of Insights on student finance, including one on reducing the tuition fee cap.
- E-petitions relating to tuition fees (November 2020) – a debate pack for a series of petitions on tuition fees for a Westminster hall debate on Monday 16 November 2020.
- E-petition 182953 relating to university tuition fees (November 2017) – a debate pack for a petition on tuition fees for a Westminster hall debate on Monday 27 November 2017.
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