Tuition fees in England are set to rise with inflation, ending an eight-year-long freeze that has wreaked havoc on university finances.
Education secretary Bridget Phillipson has confirmed that, from the next academic year, undergraduates will have to pay more per year for their degrees, with the cost to rise to £9,535 from the current £9,250.
Maintenance loans, currently worth £10,227 for someone living away from home outside London or £13,348 for those in London, are also set to rise by 3.1 per cent, adding a maximum of £414 extra, although the government has stopped short of reintroducing maintenance grants.
Fees have only risen by £250 since the £9,000 cap was first introduced in 2012 and had been frozen by the last Conservative government since 2017.
Labour has been under pressure to raise fees since coming into power in July with universities falling into deficit as the costs of teaching rise. It has been estimated that if fees had been indexed to inflation from the start, they would now be worth between £12,000 and £13,000.
Ms Phillipson told the House of Commons that Labour had come to power to find universities “facing severe financial challenges” and accused Conservative ministers of ducking tough decisions “time and again”. She said students had often experienced a gap between the course they were promised and experience they had had.
The minister said the government will publish further proposals in the months ahead and made clear universities should not expect more investment without “major reform” which she said will include a focus on widening access, raising teaching standards, value for money for students and the pay of top teams.
There were no further commitments on whether the fee will rise more in the years ahead. Analysis has previously suggested that it would reach £10,500 by the end of the Parliament if indexed to inflation annually.
The initial small increase will also be dwarfed by the increased staff costs announced in the budget last week, with higher national insurance contributions adding nearly £400 million to the pay bill of the sector.
Universities have also been suffering from a decline in international student numbers – who often pay double the value of the domestic fee – after visa changes introduced earlier this year removed the right for students below PhD level to bring their dependants with them.
Although welcomed by university leaders, the tuition fee rise will likely prove deeply unpopular among students and the wider public.
“Students are being asked to foot the bill to literally keep the lights and heating on in their uni buildings and prevent their courses from closing down,” said Alex Stanley, the vice-president for higher education at the National Union of Students (NUS). “This is – and can only ever be – a sticking plaster. Universities cannot continue to be funded by an ever-increasing burden of debt on students.”
Jo Grady, the general secretary of the University and College Union, called the hike “both economically and morally wrong”, adding it was “taking more money from debt-ridden students and handing it to overpaid, underperforming vice-chancellors”.
But Vivienne Stern, the chief executive of Universities UK, said raising fees “cannot have been easy for government, but it is the right thing to do” as it will stop the “value of fees going down year after year”.
Ms Stern also welcomed the changes to maintenance loans – currently at their lowest level for nine years – which she said were “urgently required to allow students to access the financial support they need while studying, especially given cost-of-living pressures”.
The increase comes just days after a budget which was widely regarded as having failed to address the financial challenges that are thought to have pushed some English universities to the brink of financial collapse, with 40 per cent of institutions expected to post a deficit for the last academic year.
The Daily Telegraph reported that chancellor Rachel Reeves would have faced pressure to couple a budget-announced increase in tuition fees with the reinstatement of maintenance grants, which could cost the Treasury billions of pounds.
Announcing an interim rise in fees outside of a fiscal event will allow it to be presented as a first step towards a wider package of reforms, possibly including the return of grants, but also action on student debt repayments and other inequities in the system.
