University tuition fee freeze: how will it affect you?
Theresa May has pledged to freeze university tuition fees at £9,250 and to increase the graduate repayment salary from £21,000 to £25,000 in her latest bid to win over young voters.
4 October 2017
At the annual Conservative Party conference, Theresa May has confirmed that the party will freeze university tuition fees at £9,250 and increase the amount graduates will have to earn before they start repaying their student loan from £21,000 to £25,000.This should save almost a million graduates £360 a year.
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It adds that the change also increases the proportion of graduates who are unlikely to repay their loans in full – due to any remaining debt being written off after 30 years – to 83 per cent, a rise of six percentage points.It also warns that the freeze is likely to provide universities with future funding problems due to the fact that they plan to raise fees as part of plans for the teaching excellence framework.
However, university vice-chancellors, who had feared a reduction in annual fees to £7,500, were relieved that the prime minister had not decided on such a radical course.
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Offering a fairer deal for students and young people
In an interview with The Sun on Sunday, the Prime Minister told the newspaper, “Too many young people fear they are going to be worse off than their parents.“We have listened to those concerns and we are going to act to offer a fairer deal for students and young people.”However, the new policy has come under fire as the party only increased tuition fees a few weeks ago.Angela Rayner, Labour's shadow education secretary, whose party has said it would scrap tuition fees, said, “The fact Theresa May thinks she can win over young people by pledging to freeze tuition fees only weeks after increasing them to £9,250 shows just how out of touch she is.”Costing the UK taxpayer more than £2.3 billion a year
The Institute for Fiscal Studies (IFS) has also criticised the announcement, cautioning that it will cost UK taxpayers more than £2.3 billion a year in the long run as raising the salary threshold at which graduates start to repay loans from £21,000 to £25,000 will increase the level of public subsidy for the system from 31 per cent to 45 per cent.“This is a significant giveaway, largely to middle-earning graduates, who are likely to repay around £15,700 less over their careers, at a long-run cost to government of £2.3 billion per year in 2017 prices,” the IFS says.Related news:
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It adds that the change also increases the proportion of graduates who are unlikely to repay their loans in full – due to any remaining debt being written off after 30 years – to 83 per cent, a rise of six percentage points.It also warns that the freeze is likely to provide universities with future funding problems due to the fact that they plan to raise fees as part of plans for the teaching excellence framework.
However, university vice-chancellors, who had feared a reduction in annual fees to £7,500, were relieved that the prime minister had not decided on such a radical course.
For related news and features, visit our Education & Schools section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
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