Published on January 8th, 2011 | by Pete0
University Funding and Tuition Fee Changes
This topic has been a major news item in recent times, especially as students robustly demonstrated in response to changes in Government policy. With many aspiring students out there, these changes are likely to impact on financial decisions made by potential students (and stressed parents) all over the country. I have student debt (see my personal thread) so am aware of how important decisions about higher education can be.
But what exactly are the new proposals?
- Government changes will permit universities to charge tuition fees of up to £9,000 for every year of study; a rise from the previously capped level of £3,290.
- The government have stipulated however, that if universities want to charge more than £6,000 a year, they will need to offer certain opportunities, such as bursaries, outreach programmes and summer schools; apparently in an effort to ensure that students from poorer backgrounds are not excluded from a University education.
- Currently the new proposals are set to be introduced for students beginning their studying in September 2012.
What do these changes actually mean for potential students?
- Students completing the traditional 3 year course (costing £3,000 annually) will leave University with about £30,000 of debt.
- If fees go up to £9,0000, students can expect debts to be around £38,000.
- The Institute for Fiscal Studies (IFS) describe the new proposals as essentially a ‘Graduate tax’ for about half of graduates, as they will not have finished repaying the debt by the 30 year window.
- If we assume fees are somewhere in the middle (say £7,500 a year) plus maintenance loans, it could be assumed that the top 10% of graduates, on average, will have repaid their debts after 15 years. A ‘middle earning’ graduate would need to earn an average of £48,850 a year for 26 years to repay the debt.
- The IFS believe that 10% of graduates will repay more than they originally borrowed.
So there you have it. It seems University education is becoming more expensive, but this will need to be balanced with the increased potential earnings of having a degree. That of course will be dependent on the job market at any given time; so unfortunately this is not an easy decision.