Last week, Theresa May announced a year-long review of university tuition fees and funding. It will focus on the accessibility of higher education, value for money, competition, choice and delivering the skills the country needs. The catalyst for this decision was May’s concern regarding the 95% of university Vice-Chancellors who earn hundreds of thousands of pounds every year. Many such academics have been accused of using their influence to affect decisions about their own pay. As a result, we await the government’s more in-depth analysis of the state of university finances.
In anticipation, many have been speculating about the possible changes the government will propose. Perhaps the primary concern, particularly that of students, is tuition fees. Will the government decide to lower them? At almost all universities, tuition fees sit at £9,250 per year. Though they are currently capped at this level, this leaves many students who take loans to fund their tuition and maintenance with substantial debt before their careers have even begun. Last year, we witnessed Labour’s promise to abolish tuition fees win the hearts of many young people, so we know that students are anxious for fees to be lowered. However, most students are unlikely to pay off their debt in full. Only those earning above £21,000 a year will have to repay anything. Whatever your salary, only 9% goes towards repaying student debt, and after 30 years the debt is cancelled anyway. So, the actual cost of tuition fees is perhaps not as important for students as many may think.
However, tuition fees certainly are important for the universities and lecturers. Our lecturers do need to be paid, and the universities must be able to afford resources. Otherwise, we risk seeing universities deteriorate just like our schools because of a lack of funding. A close alternative to lowering tuition fees, one which does not deny funding to universities, would be to lower the interest rate on repayments, which is currently at 6.1%. However, this is likely to have little effect besides allowing students to pocket more in the future. The interest rate level is hardly a key determinant for students considering university. The debt is either too large anyway, or worth incurring for the sake of better career prospects.
Another hope for students is the return of maintenance grants. Since 2015, students from disadvantaged backgrounds have been leaving university with rising levels of debt due to the scrapping of maintenance grants. Taking out tuition fees and maintenance loans can pile up debt to beyond £50,000. The decision to swap grants for loans received heated backlash for disregarding students from disadvantaged backgrounds. However, the main argument for this policy change is that it allows more students to go to university. Though tuition fees are high, the government still subsidises about 40-45% of the cost. Removing grants thus significantly relieved the government of a financial burden, meaning they could afford for many more people to go to university. And contrary to natural assumption, more and more students from disadvantaged backgrounds have been applying to university ever since. For these two reasons, it is highly unlikely that the Conservative government will reverse this decision.
There has been discussion about varying tuition fees for different courses. Courses with higher graduate earnings would have higher tuition fees. Education Secretary Damian Hinds says fees for each course should be determined by ‘the cost to put it on, the benefit to the student and the benefit to our country’. This possibility does not sit well with most students (63% on a recent survey). Would it be fair, however, to vary tuition fees purely based on the cost of teaching a course? 57% of surveyed students seem to think so. Somebody must cover the costs; either the students themselves or the society that is investing in them.
The best policy for tuition fees is a matter of priorities. If the Conservative government is determined to ‘have debt falling as a percentage of GDP’, we may be awaiting a review that does not make students any happier.