We promise not to raise fees. Until we raise them

There’s various angles I’ve been interrogating them from – but one in particular concerns increases in tuition fees.

OfS’ consultation on Treating Students Fairly didn’t have much to say on in-contract price increases – which is a fairly big issue where we’re talking about unregulated fees for international students or multi-year PGs.

It’s also a not-insignificant issue for any or all of the other things a university might charge for, and it’s also not-insignificant even for home domiciled UG students in the (price-)regulated UG “market”, given so many students will likely pay back in full eventually under Plan 5.

In its response to the consultation, buried down at 148c, as well as OfS “noting” that Ofcom has banned in-contract price increases linked to inflation, it reminds readers that for providers registered in the Approved (fee cap) category, OfS publishes guidance about how to prepare access and participation plans, including an “inflation statement”:

This statement must set out whether a provider will increase fees, specifying the objective verifiable index that would be used (for example, the Retail Price Index or the Consumer Price Index). In all cases this amount must not exceed the maximum amount prescribed by the Secretary of State for Education. All providers (regardless of the category of registration) must ensure they comply with consumer protection law, specifically the Consumer Rights Act 2015, schedule 2, paragraphs 1422 and 1523 (which we have used to inform provisions xi. and xii. in part a. of the OfS prohibited behaviours list).

Those two prohibited behaviours – which for the time being will (at least in terms of OfS regulation) will only apply to newly registered providers, are:

• allowing the provider to decide the price payable after the student has signed the contract (where no price or method of determining the price has previously been agreed);
• allowing a provider to increase the price payable without giving the student the right to cancel the contract.

Let’s look at those in reverse order. The second of the two is often useless – which is why the 2023 version of the Competition and Markets Authority guidance stresses that a right to cancel must be genuine and exercisable in practice without loss or serious inconvenience.

For instance, the existence of any practical difficulties in finding an alternative HE provider is likely to be relevant to how “genuine” the right to cancel is.

The footnotes then refer intrepid readers to Case C-92/11 RWE Vertrieb AG v Verbraucherzentrale Nordrhein-Westfalen eV, EU:C:2013:180 (First Chamber, 21 March 2013), para 54, which makes clear that a bare “right to cancel” does not salvage a unilateral price-variation term unless that right is effective in the real world.

Judges must look at market conditions, the costs and timing of termination, the information given with notice, and the practical ease of switching. The Court also stressed transparency at the outset – reasons and method for changes must be explained clearly when the contract is formed, because a later exit option cannot cure opacity.

In other words, if exercising cancellation is costly, confusing or ill-timed, the clause risks being unfair. Plenty of universities don’t offer students the chance to cancel at all when fees go up, and plenty more offer a bare “right to cancel” that is surely not exercisable in practice.

To allow genuine freedom to end the contract, a term must not confer just a formal cancellation right, but one that is capable of being exercised freely. The consumer should not be left worse off for having entered the contract, whether by experiencing financial loss (for example, forfeiture of a prepayment) or serious inconvenience, or any other adverse consequences. Factors relevant to the genuineness of a right to cancel are likely to include whether the consumer was given sufficient notice of the alteration, any practical difficulties in finding an alternative supplier and whether the market is competitive.

If we then look back at the “price or method of determining the price previously agreed” thing, even before its outright ban, Ofcom’s rules for telecoms contracts said as follows:

If the contract contains a price variation clause, the providers should set out an example estimate in the contract summary and contract information of how an inflation increase will impact the customer’s future monthly price (e.g. using a CPI value of 5%, this would mean the monthly price of £40 would increase to £42 from April the following year). Simply stating that there will be an (unspecified) uplift to the monthly price in line with a particular inflation index is unlikely to be sufficient.

I’m not sure I’ve ever found a university doing anything like that. And these days Ofcom has banned increases in-contract altogether, because:

In recent years, many major UK phone, broadband and pay TV companies have changed their contract terms to include price rises that are linked to future inflation rates. This leaves customers without sufficient certainty and clarity about the prices they will pay, and unfairly assuming the risk and burden of financial uncertainty from inflation, which is something people cannot predict and do not understand well. So we have decided to ban this practice.

Where there is consensus is on the use of an “objective verifiable index” rather than just saying “inflation”, and included in that is the month on which the objective verifiable index “reading” will be taken.

I’m not convinced that the Office for Budget Responsibility’s projection of where RPIX will be in the future – which is what DfE used to set maximum fees – would count as an objective verifiable index, not least because it’s not actually a measure of inflation, and because that means the message to students is:

…the amount your fees will go up is dependent on when the government announces maximum fee limits because the OBR changes its forecasts every six months.

If we then roll back to the OfS APP stuff, when the forms are filled in, OfS gives providers four options to pick from:

1. We will not raise fees annually for new entrants
2. Subject to the maximum fee limits set out in Regulations we will increase fees each year using RPI-X
3. Subject to the maximum fee limits set out in Regulations we will increase fees each year using CPIH
4. Other inflation statement (use commentary box)

Of the 104 plans I’ve looked at, sixteen went for Option 1, eight went for a version of Option 1 that confines the commitment to 2024-25 entrants, 54 went for Option 2 (RPI-X), seven opted for Option 3 (CPI-H), and the rest their own wording.

The guidance on completing that says that the inflation statement will apply to students who are new entrants starting courses while the access and participation plan is in effect – which does suggest that version of Option 1 that confines the commitment to 2024-25 entrants is a problem.

And, for now, I’m setting aside the difference between RPI-X and CPI-H as projected by the OBR and then used by DfE to set the maximum fee, and actual RPI-X and CPI-H measured at a specific point.

I’m also setting aside, for now, the astonishing reality of many universities using different measures of inflation for increases to regulated and unregulated fees without being clear on which it will use (always, of course, subject to any maximum) in advertising.

And at least for the rest of this article I’m ignoring the fact that having been unclear (or silent) on the month that a measure of inflation is used to determine an increase, several providers seem to have switched the month they use over the past few years for unregulated fees, in each case magically finding the highest rate of inflation in recent months they could find.

If we look at the providers that promised “we will not raise fees annually for new entrants”, it took me less than 5 minutes to find five universities that have broken that promise in 2025 for those that entered in 2024, and another 5 that have abandoned the promise for 2025 entrants. There’s probably more.

Then if I look at the various “write your own” statements:

• One says that any increase in fees would be limited to the increase in either RPI-X or CPI, depending on which objective verifiable index is chosen by UK government in any future decision to raise maximum fee limits set out in regulations. I’m not convinced asking students to look both projections up counts as making clear how an increase will impact the students’ future price;
• Another seems to have been approved with the wording “will usually increase annually, subject to government fee caps”, which doesn’t even mention inflation;
• One says that increases will take into account “our staffing and operation costs, changes in government funding, and the current rate of inflation and price indices”, which also appears to fail the various legal tests;
• One says “fees will be set in line with the maximum fee cap set by the government regulations”, but the regs could lift the cap altogether for all I know, so that feels non-compliant too;
• Three say “Our intention is to charge the maximum fee to new and returning students”, ditto on inflation and predicting impact;
• One says that “the government sets what fees universities and colleges can charge”, which isn’t true, it’s just a max;

I could go on. But it’s quite the cheek for respondents to a consultation on “treating students fairly” to be referred to some other bit of OfS regulation that obviously isn’t working.

Anyone thinking they’ll be able to pass on the proposed 6 per cent levy to continuing international students will really need to have written that in, with all the prominence principles and vulnerable consumer considerations in the Digital Markets, Competition and Consumers Act 2024.

Obviously there’s no evidence of anything happening at all in Wales, Scotland or Northern Ireland. It’s not clear MEDR or the SFC care, and when it comes to the CMA, I got an email from a parent the other day who said they’d raised an issue with their son’s contract at a Scottish university only for the CMA to tell him to contact DfE!

My reading is that anyone that’s experienced a non-compliant increase could issue a small-claims action for breach/unjust enrichment, and add statutory interest at the court’s discretion under section 69 of the County Courts Act 1984. Limitation is generally six years for simple-contract claims.

Don’t worry though. The chances of students knowing or understanding any of their rights in this area are zero – and if they’re international, the chances of them using those rights if they knew them given all the other pressures on them via UKVI are pretty low too. Office “for students” my eye.