Robert Greenwood
Evaluating the Rising Cost of Tuition and Student Debt in the UK:
In case you missed the headlines recently, there are plans in government to raise tuition fees to £10,500. The blow was softened somewhat with the proposed reintroduction of Maintenance Grants of £3,500 for those who need them. How have we got here and why is it going up again?
The average debt for students who started their course in 2022/23 is £45,600 and slightly lower for the 2023/24 cohort (under new reforms) at £43,700, according to a House of Commons research briefing earlier this year. Following a Freedom of Information request to the Student Loans Company, the BBC reported that the highest student debt incurred sits at £231,384.24.
Can it ever be paid off?
With current interest rates for students on Plan 2 significantly exceeding inflation at 7.3%, the prospect of fully repaying the substantial loan balance can feel unattainable. These high interest rates mean that despite contributing 9% of income above the repayment threshold (£25,000-30,000, depending on the plan), many graduates see little reduction in their overall debt. In fact, for many, the balance continues to grow. As a result, some have characterised the current loan system as equivalent to a “graduate tax,” one that, for most, will remain unpaid unless they can clear the balance with a large lump sum payment to outpace accruing interest.
Timeline of tuition:
- 1960s-1998 – Higher education was paid for by the state
- 1998 – Labour introduces tuition fees of £1,000 a year
- 2006 – Labour raises tuition fees to £3,000 a year, cancelled after 25 years
- 2012 – Conservative-Lib Dem Coalition triple tuition fees to £9,000 a year
- 2017 – Conservative government puts upper limit to £9,250 a year
- 2023 – Conservative government changes cancellation of loans from 30 to 40 years and lowers income threshold
Universities on the brink:
Why does the bill keep going up? When Tony Blair declared that 50% of the population would be university-educated in 1999, 39% of the population attended university and 20 years later this target was met. With this growth in the student population over two decades and the freeze in fees, it is clear that £9,000 is not what it was twelve years ago (around £12,500 in 2024, with inflation.) How has this surge in numbers, whilst preserving the amount charged, affected degree-providing institutions?
Around 40% of universities expect to be in deficit in 2023-24. Universities UK (a group representing over 140 universities) recently decried that the ‘government [only] covers 16% of higher education’s costs – the lowest in the developed world’, with the financial burden on the student, despite the economic benefits the sector brings – almost all teaching income is being obtained from student fees, which Forbes pinpoints to the funding reforms introduced by the coalition government in 2012. The potential collapse of universities and the knock-on effects this would have on local economies, employment (already materialising in over 60 HE institutions across the country) and the student population itself would be devastating.
Impact magazine sought the perspectives of students and graduates on the current funding crisis. Here are their responses:
Impact magazine spoke to multiple university students to gain insight into how students were reacting to this decision. Most of these students informed the Magazine that they believed the fees were too high, given that ‘to be lobbied with so much debt afterwards, that you know you’re never going to pay back […] to then come out with limited career prospects and the career prospects are never going to clear the debt […] it seems pointless’ (Jared, 26). There was an acknowledgement from most interviewees that higher education ‘has to be funded some way’ but that, ‘it’s a question of whether education is a private or a public good’ (Alison, 57). A few didn’t think it was the tuition fees themselves were too high, ‘but the interest rates [that] are too high’ (Mia, 18).
Students were asked about their thoughts regarding tuition fees being raised again in 2023
When university students were asked about their thoughts regarding tuition fees being raised again in 2023, there were no positive responses, some believing it to be just plain ‘[w]rong.’ (Megan, 20) The reasoning behind this usually came back to value for money, with one Covid-era student describing ‘paying 9K to have online lectures and reading PowerPoint presentations and not being able to use all the facilities whilst paying full tuition fees.’ (Natalie, 27) There were also calls for ‘more transparency’ as ‘there’s no point in increasing [fees] if we don’t know how it’s going to be used or make things better.’ (Jared, 26)
The magazine asked students how they felt about their student debts. The answers varied here from anxiety to frustration, to an ‘ignorance is bliss’ attitude toward the amount of money students accumulate over their (typically) three-year degree. The variant here was largely individual circumstance:
‘I’ve become a student so I can go into the future and teach the next generation – how can I do that when I’ve ensured financial insecurity and instability?’
- Ellie, 20
‘Our generation sadly, unless you come from a rich family, can’t clear it, or you have a job that pays well enough – sadly, it’s never going to be a reality.’
- Jared, 26
‘As a medical student, it’s already going to be really high and the fact that if they are willing to increase this it just makes me think I will never pay it off. It’s discouraging thinking that I’m going to be paying this tax for the rest of my life without the chance to pay it off.’
- Muhammad, 19
‘Every time I look at my student finance account my debt has grown by a few thousand. I feel as though it is continuously growing and I have a slight sense of dread that it continues to grow.’
- Natalie, 27
‘I’m in a lucky position because I don’t pay all of my fees, I only have the maintenance loan but it’s still quite high. That’s more reasonable for me to be paying back rather than paying back my student finance and my tuition fees together.’
- Mia, 18
Should tuition fees remain uniform for all degrees, or should some degrees charge more than others?
While a debate over the costs of university fees remains alive and active, Impact Magazine also spoke to students about whether tuition fees should remain uniform for all degrees, or if some degrees should charge more or less than others. There were contrasting opinions here, with some STEM (Science, Technology, Engineering and Mathematics) students believing that ‘it makes sense for science students. For specific equipment […] whereas people doing humanity, it’s mostly independent work’ (Megan, 20). The contrary opinion was that this ‘puts degrees in a hierarchy, in an elitist way […] are doctors still going to be paid pennies in comparison to a bro in finance?’ (Jared, 26) and that ‘uni should be the same for everyone, no matter the course […] it should be up to the uni to fund the course, not the student to pay more. This would discourage people who are from lower socioeconomic backgrounds […] They aren’t going to be able to go into something like medicine or engineering where they have high contact hours […] It would create a bigger gap between the affluent and the less privileged.’ (Muhammad, 19)
To summarise this debate ‘Some should charge more than others based on the amount provided’ (Mia, 18) whilst the opposing view was ‘all degrees have their own merit and purpose’ regardless of funding. (Natalie, 27)
As a potential solution for the current funding model, the idea of a graduate tax has been floated. Student shared their opinions on how they felt about a graduate tax, and once again, the responses varied widely on this question, with some believing ‘debt is better […] because you if you made 100K there’s a certain percentage of the tax you have to pay rather than a certain amount of your wages’ (Dragan, 18). Alternatively, some thought this might be a more viable alternative as those ‘earning a higher salary will pay more and this in theory could promote more lower-class backgrounds feeling they could attend university by changing their perception on their university debt’ and that this could ‘also alleviate a lot of money worries students go through’ (Natalie, 27). Others believed it wouldn’t make a difference because ‘with student debt I know it’s unlikely I will pay it off, being forced to pay the graduate tax, I guess it would be the same thing anyway.’ (Muhammad, 19)
Robert Greenwood
