Theresa May sets out year-long government review of tuition fees
Prime minister has announced the government will consider lowering the £9,250 maximum annual charge as part of wide-ranging higher education report
The government has announced a wide-ranging review of post-18 education that will consider reducing tuition fees from the current £9,250 annual limit due to what prime minister Theresa May acknowledged were “serious concerns” over the current system.
May will today set out the year-long review, which she said was needed to ensure “that people from all backgrounds share the benefit of university study”.
The government-led review – which will be headed by an independent, external chair and panel – will also identify ways to help people make more effective choices between the different options available after 18.
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According to a government briefing ahead of a speech by May today, Downing Street said changes could include giving young people better guidance about the earning potential of different jobs and what different qualifications are needed to get them so they can make more informed decisions about their futures.
The review will also look at how to support people who want to retrain during their career as well as how to “break down false boundaries between further and higher education, so we can create a system which is truly joined up”, according to the prime minister.
Although education reform in recent years has succeeded in driving up school standards and improving the choice and quality of technical education, the current post-18 system is not working as well as it could be, May will say. “For those young people who do not go on to academic study, the routes into further technical and vocational training today are hard to navigate, the standards across the sector are too varied and the funding available to support them is patchy.
“So now is the time to take action to create a system that is flexible enough to ensure that everyone gets the education that suits them.”
Possible cuts to the level of tuition fees will be considered alongside value for money, both for students and taxpayers.
May will say the lifting of the tuition fees cap from £3,290 announced in 2010 had not led to the competitive market between universities that had been envisaged.
“All but a handful of universities charge the maximum possible fees for undergraduate courses,” May will say. “Three-year courses remain the norm. And the level of fees charged do not relate to the cost or quality of the course. We now have one of the most expensive systems of university tuition in the world.”
Making university accessible to young people from every background “is not made easier by a funding system which leaves students from the lowest-income households bearing the highest levels of debt, with many graduates left questioning the return they get for their investment”, May will say. She will say the review “will examine how we can give people from disadvantaged backgrounds an equal chance to succeed”.
“That includes how disadvantaged students and learners receive maintenance support, both from government and universities and colleges.”
The panel’s report will be published at an interim stage and the review will conclude in early 2019.
The announcement comes after a report from the Treasury Select Committee called on the government to review the high interest rates charged on student loans and consider reintroducing maintenance grants as part of this review.
MPs questioned the accounting techniques used by the government for recording loans, a high proportion of which will not be repaid, and which will not show up as part of the public debt for 30 years.
The current student loans system was introduced in 2012, when the cap on university tuition fees was raised from £3,000 a year to £9,000. At the same time a repayment system with positive interest rates was introduced that utilises the Retail Price Index, despite this no longer being the nation’s main measure of inflation.
In 2016-17, maintenance grants designed to help cover the living expenses of students from less privileged backgrounds were scrapped and replaced with a new system of loans which leaves students without other avenues of financial support saddled with higher debts.
Committee chair Nicky Morgan, who was education secretary from July 2014 to July 2016, said the committee was sceptical about the government’s policy of applying high interest rates to student loans and wanted it to be seriously reconsidered as part of the review.
“The government has justified it on progressive grounds, but the committee remains unconvinced as high-flying graduates may pay less than graduates on more modest earnings,” she said.
“No other persuasive explanation has been provided for why student-loan interest rates should exceed those prevailing in the market, the government’s own cost of borrowing, and the rate of inflation. The government must reconsider the use of high interest rates on student loans as part of its review.”
Morgan – whose time at DfE also saw her responsible for the equalities brief – added that evidence given to her committee indicated an acceptance on the part of ministers that maintenance loans were not expected to cover all of a student’s living expenses, meaning that the scrapping grants had placed some students at an increased financial disadvantage.
“If a student can’t access additional sources of income, they may be priced out of university,” she said. “The government should assess the case for re-introducing maintenance grants to help remove barriers to access for potential students.”
In addition to reassessing the case for maintenance grants, the committee also called on ministers to fundamentally rethink the factors behind a near halving of the number of part-time students between 2008-9 and 2015-16, which MPs said was brought about in part by the increased tuition fees.
“[The government] should ensure that part-time study is a credible option as part of lifelong learning and retraining, and that it provides access to higher education for those who are unable to study full-time,” the report said.
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