Is the tuition fee system now under threat?

Image: IKON

The era of £9,000 tuition fees looks suddenly under threat following the election.

On Saturday, Damian Green (First Secretary of State and deputy to Theresa May) acknowledged that the widespread public concern around tuition fees represented a “huge issue”. In questions following a speech to the Bright Blue think tank on Saturday, he offered evidence that Corbyn’s successful focus on student finance and intergenerational fairness would have ramifications on both sides of the House. Over the weekend, government sources confirmed to Wonkhe that there has been no change of policy on fees, but this was not enough to stop hares running in the media, with most national newspapers painting the comments as a dramatic government U-turn on higher education funding.

During the election campaign, when the Conservatives were riding high in the polls and were almost universally predicted to win a huge majority on the back of Theresa May’s coattails, we took a lot of interest in what the Prime Minister’s (and her advisers’) particular brand of conservatism might mean for higher education and universities. There were plenty of indications in Conservative Party circles that cynicism towards universities was growing, particularly over the continued value of degrees and the sector’s perceived focus on international interests at the expense of domestic ones.

This was only confirmed when the Conservative manifesto promised a “major review” of tertiary education funding that would ensure the technical and higher education sectors “are treated fairly”.

When asked last week about the prospect of the “major review” taking place, Jo Johnson responded that he was “considering the manifesto commitment within the department”. The question as to the review’s scope remains open, but despite Green’s comments over the weekend, it is still unlikely to include higher education funding in a meaningful way. There is no real appetite in government for another Browne-style review. At least not for now.

But this does not mean that universities in England should be banking on the long-term health of the current fees system. Another snap election will remain a possibility at any time during the next two to three years, and Labour, promising to abolish fees altogether, could be poised to win. Furthermore, rising inflation, provoked by the weakening pound as Brexit begins to bite, will not be good PR for £9,000+ fees.

The interest rate on student loans, currently set at RPI plus 3% (at present it’s 6.1%), is beginning to be called “usurious”, and Johnson was pressed twice on the subject by attendees at an event last week at the University of Buckingham. Furthermore, the cash increase in fees will accelerate far more quickly than Johnson might have anticipated when he decided to allow increases as a condition of TEF. Fees are expected to be increased by 3.2% to roughly £9,500 for the 2018–19 year, and could reach over £10,000 by 2020–21 (news of which will break just after Brexit is concluded in 2019).

Crossing the £10,000 threshold will be a symbolic moment and provide ideal campaigning material for Labour in the run-up to any possible election, particularly post-Brexit. Damian Green is merely the first Conservative to realise that this will require addressing in some form before any campaign.

Last week, Jeremy Corbyn found himself with another unlikely ally in criticising tuition fees and high salaries as New Labour grandee and tuition fees architect Andrew Adonis took to The Times to complain about the “greed and complacency” of a “cartel” of vice chancellors, echoing Johnson’s own language in the run-up to the Higher Education and Research Bill debate. Adonis warned that vice chancellors’ growing pay packets and continued pressure for a higher fee level would only increase pressure to abandon tuition fees. Adonis later posted on Twitter that he would ask the Competition and Markets Authority to investigate the “cartel”, specifically asking why all universities charge the full fee limit for most of their courses.

Johnson chose to add to the criticism of higher-end salaries, saying, “There are legitimate concerns about the rate at which vice chancellor pay has been growing. I think it is hard for students at a time when they have concerns over value for money and want to see real evidence of value for money from their tuition fees”.

As if that wasn’t enough, Lib Dem leadership hopeful Vince Cable also waded into the debate in an interview in yesterday’s The Sunday Times, potentially leaving the door open for a change in his party’s policy, saying, “I am open to good suggestions” for tuition fee policy.

This debate will clearly run and run – there has always been an appetite to print stories about fees in the media, and it’s been a political lightning rod of an issue since first mooted twenty years ago by the Dearing Report. But more importantly, these latest developments do point to an emerging post-election consensus that what once seemed like a settled issue of higher education funding policy will be reopened sooner rather than later.

This might be music to the ears of critics of the current funding system, but the threat of radically overhauling the funding system will cause volatility in the sector for as long as it remains a serious possibility. Universities will be less able to meaningfully plan for the future. And prospective students may want to ‘wait and see’ before applying in the hope of getting a better deal. Both could lead to real problems for many institutions. Whatever your view of the current fees system, political limbo is surely the worst outcome of all. 

2 thoughts on “Is the tuition fee system now under threat?”

  1. Jamie Stewart says:

    No, the worst outcome would be sticking with a rotten system. Student numbers are could to plateau at absolute best, at a time when universities have been preparing for growth. Radical reform and discussion about the purpose of universities is needed soon so save the best of our HE system.

  2. Jim says:

    There is a way around the interest applied to loans

    Sharia-compliant loans
    Section 86 of the Higher Education and Research Act 2017 makes provision for alternative payments to be made for students that do not bear any interest. Repayments must be the same amount as if they were a standard tuition fee loan – AKA Interest Free loans! – Mass Conversion guys

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