Tuition Fees

What are tuition fees?

In September 2006 it was agreed that universities would be allowed to charge up to £3,000 a year in variable tuition fees, or top-up fees. The previous Labour government gave an undertaken not to review the £3,000 cap until 2009 at the earliest, and to permit increases above this level, other than raising it in line with inflation, only with the approval of both Houses of Parliament.

The Coalition government elected in May 2010 announced its intention to radically reform higher education and student finance. In November 2010 the new government outlined plans to raise the cap on tuition fees in England from 2012 to £6000 and up to £9000 "in exceptional cases".

Universities and colleges still have to justify the additional fees to the Office for Fair Access, with OFFA able to apply sanctions if necessary. Graduates will not have to begin repaying fees until they earn £21,000 - up from the current £15,000 - and a real rate of interest will be charged but with a progressive taper.

The government's proposed reforms followed an independent review of HE funding and student finance chaired by Lord Browne of Madingley which was instigated by the previous Labour government in 2009. Lord Browne's report 'Sustaining a Future for Higher Education' published in October 2010 recommended placing more of the funding burden on "successful" graduates, with repayments being made only by graduates earning £21,000 and above.

In December 2010, following votes in the Commons and the Lords, changes to tuition fees for 2012/13 were cleared by Parliament.

Background

The last 40 years has seen higher education (HE) in the UK transformed from an elite system to a mass participation system: between 1962 and 2002, the participation rate rose from six per cent to around 43 per cent. The Labour government was committed to seeing this proportion increase to 50 per cent.

This increase in the number of students in HE was not met by proportionate increases in funding for universities and colleges. In 2003, the government maintained that HE was underfunded against its needs by around £9 billion.

However, it had long been argued that it was unfair for the general public, most of whom had not benefited from a university education, to be made to pay for the additional costs of HE, when the principal beneficiaries were the graduates themselves. Throughout the 1990s, the notion that the beneficiaries of HE should pay for some of the costs began to gain widespread support across the political spectrum. 

In 1996, John Major commissioned an inquiry into long-term HE funding, chaired by Sir Ron Dearing. The report, published in July 1997, recommended that students should pay 25 per cent of the costs of tuition. Later that month, education secretary David Blunkett introduced a new system of means-tested tuition fees, abolishing at the same time the remnants of the student grant system, something Sir Ron had rejected.

In 1997, Labour's manifesto stated that "the costs of student maintenance should be repaid by graduates on an income-related basis".

Tuition fees were first paid by students in September 1998. They were flat-rate up-front annual charges, to the value of £1,125 in 2004, for which all students whose parents earned over £32,000 per annum were liable. Those with lower family incomes were liable for reductions or were exempt.

The move was highly divisive within Labour, with many on the left of the party opposed to the notion of fees in principal, believing they discouraged people from low income backgrounds from pursuing HE.

The move was particularly unpopular in Scotland, where four-year degree courses were the norm. In July 1999, the Scottish Executive commissioned the Cubie inquiry to examine HE funding in Scotland.

The resultant report, published in December 1999, recommended that tuition fees in Scotland should be replaced by a graduate endowment scheme, whereby the Scottish Executive would pay the fees. Students would be required to repay £3,000 when their earnings reached £25,000 a year. The executive adopted the plan in January 2000, amending the repayment figure to £2,000 and the earnings threshold to £10,000 a year.

Ahead of the 2001 general election, the Liberal Democrats campaigned on a platform of abolishing tuition fees outright, while Labour claimed in its manifesto that it had made the introduction of top-up fees illegal.

However, just two years later, following intense pressure from universities - particularly the prestigious institutions of the Russell Group - the Labour government's May 2003 White Paper included proposals for top-up fees, albeit considerably lower than those sought by the Russell Group. Shortly afterwards, the Conservatives committed themselves to abolishing fees.

The higher education bill, presented in December 2003, set out the government's plans for introducing top-up fees. The bill was tremendously divisive for Labour: Norwich MP Ian Gibson's early day motion calling for a rethink of the policy attracted 185 MPs' signatures, casting serious doubt on the government's ability to carry the bill. However, a series of "seminars" for Labour MPs and concessions made by education secretary Charles Clarke convinced enough members to approve the bill. It was passed into law as the Higher Education Act in July 2004.

In September 2006, Labour agreed that universities would be allowed to charge up to £3,000 a year in variable tuition fees, or top-up fees, capped until at least 2009. In 2010, the Coalition government announced its intention to raise the cap on tuition fees to £6000 in 2012 and up to £9000 “in exceptional cases”.

Controversies

Higher education funding has been one of the most controversial and divisive issues of recent years. Although one might expect opinion on the matter to be divided along conventional left-right grounds, experience has shown this not to be the case - although the vulnerability of Labour on the issue of top-up fees may have encouraged some to adopt particular stances for political-tactical reasons, rather than on grounds of principle.

Both sides defend their position on grounds of equity. Supporters of fees argue that it is unfair on the majority of the population who have not received the benefits of HE - which are statistically agreed to be fairly substantial in terms of average salaries - to bear the full burden of the costs. As such, shortfalls in HE funding should not be paid for from tax receipts.

Opponents of fees argue that the policy is inequitable, insofar as it discourages students from low income and financially risk-averse backgrounds from entering HE. As such, they claim, the policy is exclusive and will reinforce the middle class domination of HE. Opponents generally regard the replacement of the maintenance grant with student loans as symptomatic of the same problem.

It is also claimed in some quarters that introducing fees undermines the notion of HE being about "education for its own sake", and reduces it to an economic transaction, pointing to the US model where the best universities are also the most expensive as evidence of where the policy leads.

Fees are particularly unpopular with students themselves, many of whom experience substantial financial hardship at university and extensive debts thereafter. There is evidence to suggest that many are put off from attending university at all, or drop out due to financial pressures.

There are also debates about the appropriateness of the particular schemes settled upon. Some have called for a "graduate tax" to be paid by those who have been through HE, instead of tuition fees. Prior to the higher education bill, there was also debate about the fairness of up-front fees as opposed to fees paid off in retrospect.

The tuition fees issue has also been a test case of Scottish devolution, with the abolition of fees laying a major fault-line across the British HE system. Debates continue to rage over the fairness of English students being liable for fees while at Scottish universities and vice versa.

The Coalition government's proposed reforms to tuition fees announced in November 2010 provoked huge controversy, not least because many Liberal Democrats, including Nick Clegg, Vince Cable and Sir Menzies Campbell, had signed the NUS 'Vote for Students' pledge "to vote against any increase in fees in the next Parliament and to pressure the government to introduce a fairer alternative".

NUS president Aaron Porter warned: "Students will remind MPs in their constituencies of the promises they made to voters. Anyone who doubts the electoral power of the student vote should speak to former Education Secretary Charles Clarke, who lost his seat at the last election after refusing to commit to vote against higher tuition fees."

However, Business Secretary Vince Cable said the Coalition had developed a package which was "fairer than the present system of student finance and affordable for the nation", with access to higher education based on "ability, not ability to pay".

Also, Lord Browne's report 'Sustaining a Future for Higher Education', which recommended graduates should only begin to repay tuition fees when or if they earned £21,000 or above, estimated that only the top 40% of earners on average would pay back all the charges paid on their behalf and that 20% of the lowest earners would pay less than today.

In March 2011, an application for a Judicial Review in the High Court was lodged by two teenagers, Callum Hurley and Katy Moore, who claimed the increase in tuition fees breached the European Convention on Human Rights.

However, their bid to quash the regulations that set out the tuition fees limits was rejected by the High Court in February 2012.
 

Statistics

Key general facts and figures for 2012-13.

For students starting their studies in the academic year 2012-13:

• the maximum annual tuition fee (chargeable with an access agreement) is £9,000 for full-time courses and £6,750 for part-time courses
• the basic annual fee (chargeable without an access agreement) is £6,000 for full-time courses and £4,500 for part-time courses
• the average ‘headline’ full-time fee (i.e. before fee waivers) is £8,385
• the average fee that full-time students will be charged (i.e. after fee waivers) is £8,123
• the full state maintenance grant is £3,250
• the threshold for the full maintenance grant is a household income of £25,000
• the threshold for a partial maintenance grant is a household income of £42,600.

Please note that there are different fees and state support thresholds for ‘continuing’ students and for students on sandwich work placements or study years abroad..

A total of 383 institutions have approved access agreements for 2012-13. This total consists of:
• 124 higher education institutions
• 25 further education colleges
• 55 school-centred initial teacher training (SCITT) providers.

Source: OFFA – 2012/13

Quotes

“There’s no easy way to say this: we made a pledge, we didn’t stick to it - and for that I am sorry. “

Lib Dem leader Nick Clegg, apologising for breaking his promise not to raise tuition fees:  Party Political Broadcast – September 2012.
 

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