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There has been a recent call for an increase in university tuition fees by university vice-chancellors in England and Wales. Currently, UK tuition fees are frozen at £9,250. This cap has remained in place since 2017, and the government intends for it to stay at this rate until 2025. However, because of current inflation rates, “by 2025 there will effectively have been a long-term cut to university per student incomes by around a third.” It has been claimed that, if tuition fees had kept pace with inflation, UK students would now be paying £12,000 a year. University bosses are calling for tuition fees to be increased to £24,000 a year, a figure closer to the annual amount that international students pay on average.
In the academic year 2021/22, the average student loan was £46,000, comprising three years of full tuition fees at £9,250 a year and three years of maintenance loans at £6,000 a year.
After 30 years of repaying student loans, ex-University students will see their debts forgiven. Under the current system, a graduate who earns £40,000 as a starting salary, and whose salary increases 2.5% annually, would still not pay off their university loans before the 30-year forgiveness mark. Taking interest (currently capped at 6.3%) into account, they would end up paying a total of £84,000 over the course of 30 years.
Most of this (£54,000) would be paid in interest, while £16,000 of debt would remain unpaid. If annual tuition fees were increased to £13,000 a year, this person would hypothetically pay the same amount over the 30 years, however “almost all of it would be the interest on the initial debt”, and £56,000 would remain unpaid after 30 years. This means that there would be a greater burden on the taxpayer.
Inflation is a key reason behind the pressure to increase tuition fees. The Russell Group claims that institutions are making a loss of £1,750 per year per UK student, predicting that this could increase to £4,000 a year by 2024. Tuition fees have been frozen for a significant period, meaning they are not keeping up with inflation. According to Professor Steve West, President of the vice-chancellors’ group Universities UK, “If nothing changes, universities will have to look at what they can scale back on. They may be forced to say: ‘We need bigger courses and fewer staff.’ That’s not a place anyone wants to go to, but there may be no choice.”
As inflation increases but revenue from tuition fees does not, in conjunction with other increased costs that universities face, some universities could find themselves “having to cut back on places, cut courses, merge with other institutions or, in extreme cases, close their doors permanently.” Some university bosses claim that keeping tuition fees at the same rate are “forcing” universities to take in more foreign students to substitute for the lost revenue. However, a Department for Education spokesman responded: “It is a myth that offering a place to an international student takes a place away from a student in the UK,” they continued. “They actually support the creation of more places for domestic students.”
This autumn, a record 20% of undergraduate students beginning their studies at top universities will have come from abroad, while the number of British undergraduates has declined by 13%. However, UK-born students still account for 84.3% of the undergraduate population.
Another concern regarding increased tuition fees is that it would deter students from lower-income backgrounds from attending university. This is due to the fact those from lower-income families are more likely to have strong aversions to debt. This raises concerns about social mobility; university places are subsequently likely to “disproportionately go to better-off students.” The General Secretary of the Association of School and College Leaders also raised concerns about the costs on top of student loans: “it needs to be remembered that this is only one part of the cost of university and that there can also be significant maintenance costs for food, accommodation and bills, and at least some of these costs are likely to rise because of the cost of living crisis.”