Million+ calls for lower tuition fees
Limiting tuition fees to £6,000 per year could be achieved whilst remaining cost neutral to universities and the Treasury, the Million+ group of universities has proposed.
The group commissioned a study by London Economics, which found that mixing the previous and current system of funding could reduce lending costs, as not all students will pay back their loans in full. These savings could be used to fund extra places.
Universities would have to receive additional funding from the Government, which BIS warned could lead to a £2bn shortfall.
Students currently pay back their loans when they graduate and start earning more than £21,000 per year. But the level of loss on loans is now running at around 35%, due to lower than expected salary levels.
The study also looked at graduate tax, to allow Government to borrow less than at present.
Pam Tatlow of Million+ said: “Questions remain about the sustainability of the coalition's higher-education reforms and their impact on participation, but few details have emerged about the alternatives. The modelling shows that these two alternatives could be introduced at no additional cost to the Treasury while also preserving the unit of resource in universities.”
A spokesperson for BIS responded: “This report confirms that reducing tuition fees to £6,000 would mean a £2bn shortfall in funding for higher education.
“That would be bad for students, bad for universities and bad for graduates. The second alternative of a pure graduate tax would also cost more than the current system, while weakening incentives on individual universities to deliver a high-quality academic experience.
“Our reforms in contrast deliver well-funded universities, more student choice and a better academic experience.”
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