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Tuition fees Tuition payments, usually known as tuition in American English and as tuition fees in Commonwealth English, are fees charged by education institutions for instruction or other services. Besides public spending (by governments and other public bo ...
were first introduced across the entire United Kingdom in September 1998 under the Labour government of Tony Blair to fund tuition for undergraduate and postgraduate certificate students at universities; students were required to pay up to £1,000 a year for tuition. However, as a result of the new devolved national administrations for Scotland, Wales and Northern Ireland, there are now different arrangements for tuition fees in each of the nations.


History

Until 1976, tuition fees were paid by UK students attending a UK university who only qualified for the minimum grant of £50. In 1976 they were abolished, together with the £50 minimum grant. In May 1996,
Gillian Shephard Gillian Patricia Shephard, Baroness Shephard of Northwold, (''née'' Watts; born 22 January 1940), is a British Conservative politician who was the Member of Parliament (MP) for South West Norfolk from 1987 to 2005. Shephard served as a Cabin ...
, Secretary of State for Education and Employment, commissioned an inquiry, led by the then Chancellor of the University of Nottingham, Sir Ron Dearing, into the funding of British higher education over the next 20 years. This
National Committee of Inquiry into Higher Education The Dearing Report, formally known as the reports of the National Committee of Inquiry into Higher Education, is a series of major reports into the future of Higher Education in the United Kingdom, published in 1997. The report was commissioned by ...
reported to the new Labour Government, in the summer of 1997, stating additional billions of funding would be needed over the period, including £350 million in 1998–99 and £565 million in 1999–2000, in order to expand student enrolment, provide more support for part-time students and ensure an adequate infrastructure. The committee, as part of its brief, had controversially investigated the possibility of students contributing to the cost of this expansion, either through loans, a graduate tax, deferred contributions or means testing state assistance, as their report notes:
20.40 We do not underestimate the strength of feeling on the issue of seeking a contribution towards tuition costs: nor do we dispute the logic of the arguments put forward. A detailed assessment of the issues has, however, convinced us that the arguments in favour of a contribution to tuition costs from graduates in work are strong, if not widely appreciated. They relate to equity between social groups, broadening participation, equity with part-time students in higher education and in further education, strengthening the student role in higher education, and identifying a new source of income that can be ring-fenced for higher education. 20.41 We have, therefore, analysed the implications of a range of options against the criteria set out in paragraph 20.2. There is a wide array of options from which to choose, ranging from asking graduates to contribute only to their living costs through to asking all graduates to contribute to their tuition costs. We have chosen to examine four options in depth
In response to the findings, the
Teaching and Higher Education Act 1998 The Teaching and Higher Education Act 1998c 30 was enacted by the United Kingdom Parliament on 16 July 1998. It enabled universities to charge tuition fees, and established statutory General Teaching Councils (GTC's) for England, Wales and North ...
was published on 26 November 1997, and enacted on 16 July 1998, part of which introduced tuition fees in all the
countries of the United Kingdom The United Kingdom of Great Britain and Northern Ireland (UK), since 1922, comprises three constituent countries and a region: England, Scotland, and Wales (which collectively make up the region of Great Britain), as well as Northern Ireland, ...
. The act introduced a means-tested method of payment for students based on the amount of money their families earned. Starting with 1999–2000, maintenance grants for living expenses would also be replaced with loans and paid back at a rate of 9% of a graduate's income above £10,000. Following devolution in 1999, the newly devolved governments in Scotland and Wales brought in their own acts on tuition fees. The Scottish Parliament established, and later abolished a graduate endowment to replace the fees. Wales introduced maintenance grants of up to £1,500 in 2002, a value which has since risen to over £5000. In England, tuition fee caps rose with the Higher Education Act 2004. Under the Act, universities in England could begin to charge variable fees of up to £3,000 a year for students enrolling on courses as from the academic year of 2006–07 or later. The passing of the aforementioned act caused political controversy due to the influence of Scottish Labour MPs on the vote, which passed with a majority of just five. This policy was also introduced in Northern Ireland in 2006–07 and introduced in Wales in 2007–08. In 2009–10 the cap rose to £3,225 a year to take account of inflation. Following the
Browne Review The Browne Review or Independent Review of Higher Education Funding and Student Finance was a review to consider the future direction of higher education funding in England. It was launched on 9 November 2009 and published its findings on 12 Oct ...
in 2010, the cap was controversially raised to £9,000 a year, sparking large
student protests in London A student is a person enrolled in a school or other educational institution. In the United Kingdom and most The Commonwealth, commonwealth countries, a "student" attends a secondary school or higher (e.g., college or university); those in pri ...
. A judicial review against the raised fees failed in 2012, and so the new fee system came into use that September. Further adjustments were put forth in the 2015 budget, with a proposed fee increase in line with inflation from the 2017–18 academic year onwards, and the planned scrapping of maintenance grants from September 2016. The changes were debated by the Third Delegated Legislation Committee in January 2016, rather than in the Commons. The lack of a vote on the matter has drawn criticism, as by circumventing the Commons the measures "automatically become law". Tuition fees and perceptions about them are directly linked to satisfaction. In February 2018, then Prime Minister
Theresa May Theresa Mary May, Lady May (; née Brasier; born 1 October 1956) is a British politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 2016 to 2019. She previously served in David Cameron's cab ...
launched a review of post-18 education funding, including university funding and possible alternatives to tuition fees and loans. The review panel was expected to report back in early 2019, but as of October 2019, the review is yet to be published. In February 2020, Labour Party leadership candidate
Keir Starmer Sir Keir Rodney Starmer (; born 2 September 1962) is a British politician and barrister who has served as Leader of the Opposition and Leader of the Labour Party since 2020. He has been Member of Parliament (MP) for Holborn and St Pancras s ...
(who went on to win the 2020 Labour leadership election), promised to maintain the Labour Party's commitment to abolishing tuition fees.


Current systems


England

In England, undergraduate tuition fees are capped at £9,250 a year for UK and Irish students. Due to Brexit, starting in autumn 2021, EU, other EEA and Swiss nationals are no longer eligible for the home fee status, meaning higher fees and no access to UK government loans unless they have been granted a settled or pre-settled status under the EU Settlement Scheme. Around 76% of all institutions charged the full amount of tuition fees in 2015–16. A loan of the same size is available for most universities, although students at private institutions are only eligible for £6,000 a year loans. Since 2017–18, the fee cap is meant to be raised in line with inflation. Maintenance grants are also available to current students in England, although these are scheduled to cease with the 2016–17 academic year. Maintenance loans are available for living costs, and these are means tested. These loans are scheduled to increase in size for 2016–17, when the maintenance grant system is phased out. There will be a vote in the autumn to consider a further increase effective with the 2017–18 year. Several universities have already advertised fees of £9,250 for the year in anticipation of such a vote passing. In October 2017, the Prime Minister Theresa May announced that tuition fees would be temporarily frozen at £9,250. In 2018, this temporary freeze remains in place and it is likely to be extended as a university funding review is carried out. The latter, which was launched by Theresa May, is being chaired by
Philip Augar Sir Philip Augar is a British author, and was an equities broker in the City of London, England for twenty years from the 1970s, first with NatWest and J. Henry Schroder, and was part of the team that negotiated the sale of Schroders investment ba ...
. In the 2015 spending review, the government also proposed a freeze in the repayment threshold for tuition fee loans at £21,000; a figure which was previously set to rise with average earnings. The changes, if passed, will affect all Plan 2 tuition fee loans, backdated to cover loans taken out from 2012.


Effect

Many commentators suggested that the 2012 rise in tuition fees in England would put poorer students off applying to university. However, the gap between rich and poor students has slightly narrowed (from 30.5% in 2010 to 29.8% in 2013) since the introduction of the higher fees. This may be because universities have used tuition fees to invest in bursaries and outreach schemes. In 2016, The Guardian noted that the number of disadvantaged students applying to university had increased by 72% from 2006 to 2015, a bigger rise than in Scotland, Wales or Northern Ireland. It wrote that most of the gap between richer and poorer students tends to open up between Key Stage 1 and Key Stage 4 (i.e. at secondary school), rather than when applying for university, and so the money raised from tuition fees should be spent there instead. A study by Murphy, Scott-Clayton, and Wyness found that the introduction of tuition fees had "increased funding per head, rising enrolments, and a narrowing of the participation gap between advantaged and disadvantaged students".


Northern Ireland

Tuition fees are currently capped at £4,030 in Northern Ireland, with loans of the same size available from Student Finance NI. Loan repayments are made when income rises above £17,335 a year, with graduates paying back a percentage of their earnings above this threshold.


Scotland

Tuition fees are handled by the Student Awards Agency Scotland (SAAS), which does not charge fees from what it defines as "Young Students", or "Dependent Students". Young Students are defined as those under 25, without dependent children, marriage, civil partnership or cohabiting partner, who have not been outside of full-time education for more than three years. Fees exist for those outside the young student definition. The tuition fees are usually £1,820 for undergraduate courses for Scottish & Irish students, and £9,250 for students from the rest of the UK. Due to Brexit, from Autumn 2021 EU students will have to pay international tuition fees in Scotland ranging from £10,000 - £26,000 per year depending on the university and degree type unless they have been granted a settled or pre-settled status under the EU Settlement Scheme. At the postgraduate level, Scots and RUK usually pay the same amount, commonly between £5,000 and £15,000 per year, while tuition fees for international students can run as high as £30,000 per year. Fee discrimination against students from the rest of the UK has been challenged in the past but deemed legal. The Scottish government confirmed in April 2019 that, with regards to tuition fees, EU students would be treated the same as Scottish students for their whole course if they begin studies up until 2020, regardless of how
Brexit Brexit (; a portmanteau of "British exit") was the Withdrawal from the European Union, withdrawal of the United Kingdom (UK) from the European Union (EU) at 23:00 Greenwich Mean Time, GMT on 31 January 2020 (00:00 1 February 2020 Central Eur ...
would be enacted. The system has been in place since 2007 when graduate endowments were abolished. Labour's education spokesperson
Rhona Brankin Rhona Brankin (born 19 January 1950) is a former Scottish Labour-Co-operative politician who served as the Member of the Scottish Parliament (MSP) for the Midlothian constituency. She was first elected in 1999 and was re-elected in 2003 and 2007 ...
criticised the Scottish system for failing to address student poverty. Scotland has fewer disadvantaged students than England, Wales or Northern Ireland and disadvantaged students receive around £560 a year less in financial support than their counterparts in England do.


Wales

In Wales tuition fees are capped at £9,000 for all UK and EU students. This is lower than in Scotland (for UK students from outside Scotland) and England. Welsh students may apply for a non-means tested tuition fee loan to cover 100 percent of tuition fee costs wherever they choose to study in the UK. Welsh students used to be able to apply for fee grants of up to £5,190, in addition to a £3,810 loan to cover tuition fee costs. However, the Welsh Government changed this system after the Diamond Review was published. Today students may only access a tuition fee loan rather than a grant. The changes became effective for students starting University in September 2018. The Welsh Government argued this would allow for higher maintenance loans and grants and these costs are the biggest barrier for poorer students to attend University.


Interest fees

Students and graduates pay interest fees on student loans. Interest starts being added to the student loan from when the first payment is made. In 2012 this rate was set at the
retail price index In the United Kingdom, the Retail Prices Index or Retail Price Index (RPI) is a measure of inflation published monthly by the Office for National Statistics. It measures the change in the cost of a representative sample of retail goods and servic ...
(RPI) plus up to 3% depending on income. Students who started university between 1998 and 2011 pay
Bank of England base rate A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...
plus 1% or RPI, whichever is lower. Students who started university before 1998 pay interest set at the RPI rate. As a consequence of the 2012 change, students who graduate in 2017 will pay between 3.1% and 6.1% interest, despite the Bank of England base rate being 0.25%. In 2018, interest fees rose again, this time to 6.3% for anyone who started studying after 2012. If those who have taken out a student loan do not update their details with the
Student Loans Company The Student Loans Company (SLC) is an executive non-departmental public body company in the United Kingdom that provides student loans. It is owned by the UK Government's Department for Education (85%), the Scottish Government (5%), the Welsh ...
when receiving a letter or an email to update their employment status, or upon leaving the UK for 3 or more months, start a new job or become self-employed, or stop working, then they can possibly face a higher interest rate on their loan. In June 2019, the
Brexit Party Reform UK is a right-wing populist political party in the United Kingdom. It was founded with support from Nigel Farage in November 2018 as the Brexit Party, advocating hard Euroscepticism and a no-deal Brexit, and was briefly a significant ...
stated it would scrap all interest paid on student tuition fees and has suggested reimbursing graduates for historic interest payments made on their loans. In August 2019, government figures uncovered by the Labour Party showed that "students will owe a staggering £8.6bn in interest alone on their loans within five years ... almost double the current debt".


Possible alternatives

There have been two main proposed alternative ways of funding university studies: from general taxation or by a graduate tax.


Funding from general taxation

Tuition is paid for by general taxation in Germany, although only around 30% of young people gain higher education qualification there, whereas in the UK the comparable figure is 48%. Fully or partly funding universities from general taxation has been criticised by the Liberal Democrats as a 'tax cut for the rich and a tax rise for the poor' because people would be taxed to pay for something that many would not derive a benefit from, while graduates generally earn more due to their qualifications and only have to pay them back.
Jeremy Corbyn Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who served as Leader of the Opposition and Leader of the Labour Party from 2015 to 2020. On the political left of the Labour Party, Corbyn describes himself as a socialis ...
, former Labour leader, stated that he would have removed tuition fees and would have instead funded higher education by increasing National Insurance and Corporation Tax. In the long term this plan would have been expected to cost the government about £8 billion a year. In July 2017
Lord Adonis Andrew Adonis, Baron Adonis, (born Andreas Adonis; 22 February 1963) is a British Labour Party politician and journalist who served in HM Government for five years in the Blair ministry and the Brown ministry. He served as Secretary of State ...
, former
Number 10 Policy Unit The Number 10 Policy Unit is a body of policymakers based in 10 Downing Street, providing policy advice directly to the British Prime Minister. Originally set up to support Harold Wilson in 1974, it has gone through a series of guises to suit the ...
staffer and education minister largely responsible for introducing tuition fees, said that the system had become a "Frankenstein's monster" putting many students over £50,000 in debt. He argued the system should either be scrapped or fees reverted to between £1,000 and £3,000 per the initial scheme.


Graduate tax

During the 2015 Labour leadership election,
Andy Burnham Andrew Murray Burnham (born 7 January 1970) is a British politician who has served as Mayor of Greater Manchester since 2017. He served in Gordon Brown's Cabinet as Chief Secretary to the Treasury from 2007 to 2008, Culture Secretary from 200 ...
said that he would introduce a graduate tax to replace fees. He was ultimately unsuccessful in his bid for leadership. A graduate tax has been criticised because there would be no way to recover the money from students who move to a different country, or foreign students who return home.


See also

*
Free education Free education is education funded through government spending or charitable organizations rather than tuition funding. Many models of free higher education have been proposed. Primary school and other comprehensive or compulsory education is fr ...
*
Right to education The right to education has been recognized as a human right in a number of international conventions, including the International Covenant on Economic, Social and Cultural Rights which recognizes a right to free, compulsory primary education for ...
* Student Left Network *
Universal access to education Universal access to education is the ability of all people to have equal opportunity in education, regardless of their social class, race, gender, sexuality, ethnic background or physical and mental disabilities. The term is used both in co ...


References


External links


Text of Higher Education Act 2004, which introduced top-up fees

BBC News Q&A: Student Fees


(guide to fees)
Student Loans Company
(the body responsible for providing and administering student loans in the UK)
Dearing Report
{{DEFAULTSORT:Tuition Fees In The United Kingdom Articles which contain graphical timelines Education finance in the United Kingdom Higher education in the United Kingdom