A new study has revealed concerns over rising university costs by noting that fees at some universities could hit £10,000 per year by 2020.
The Independent Commission on Fees has warned that the government should be “extremely wary” about increases or the removal of the cap on fees altogether.
The study coincides with a report that that revealed 78% of teenagers from a poll of over 1,000 UK sixth-form students are very or fairly concerned about living costs, 68% were concerned about tuition fees, and 58% were worried about repaying loans after graduation.
Under the current rules, tuition fees are capped at £9,000 per year, with students having to repay their loans once their earnings reach £21,000 per year. However, George Osbourne used his budget last month to announce further reforms which would allow universities to increase their fees in line with inflation from 2017/18. In real terms this means that, based on a compound interest of 3%, fees at some universities could hit £10,000 per year by 2020.
The recent report noted, “The Government should be extremely wary of substantive increases in fees or removing the cap on fees completely. Our concerns about the impact on students and the taxpayer (through loans) suggest extreme caution should be taken in placing any further strain on the loan system by any substantive increase in fees, or lifting the cap completely as some have suggested.
The report also noted how universities tended to opt to demand the highest possible tuition fees from students, explaining, “Evidence to date shows that there has been no move to a real market in fees, but rather a clustering at the top end of allowable charges, with insufficient understanding of the long term effects of the debts incurred in this process.”
While the report acknowledged that there has been “no obvious detrimental change” in the number of school leavers going to university, there is an “unacceptably high” gap between the numbers of disadvantaged sixth formers heading off to university – especially at the more selective universities.
Will Hutton, chair of the commission, also noted how,
Debt is likely to become a bigger issue,“ noting, “Under the current system, nearly three-quarters of students will fail to clear their student loans before they are written off after 30 years, and the large majority will still be paying off their loans well into their 40s, figures that will increase with the abolition of grants and increase in fees. It is not clear that students will continue to disregard debt.”
At the same time, it looks increasingly likely that any anticipated gains to the Treasury will be largely wiped out by these non-payments. It’s absolutely vital that the OBR establishes what the knock-on effects of the student loan system will be in the future on both students and the national finances so we know whether the current system is offering us value for money and economic security.”
Elsewhere, Professor Anne West, director of the Education Research Group, at the London School of Economics, warned,
The research published by the Independent Commission on Fees raises serious concerns about the current student loans system. Moreover, the planned changes to fees and to student financial support are likely to have far-reaching negative effects on students from disadvantaged backgrounds, who have been beneficiaries of maintenance grants, which reduce later indebtedness.”