Move to cap tuition fees at £7,500
Students heading to university in England could see their tuition fees being capped at £7,500, a review is urging.
The same review, commissioned by Prime Minister Theresa May, also says that students should repay their loans over 40 years rather than the current 30 years.
There’s also a call for improved funding for students who are in vocational education.
In addition, the maintenance grants which help support poorer students and which were scrapped in 2016, should now be reinstated.
The Prime Minister said: “It’s time to bring them back, I believe.”
The proposals for tuition fees
However, since she is leaving Downing Street, Mrs May acknowledges that the proposals for tuition fees in the review will be dependent on who the next prime minister is.
She added: “It’s up to the government to decide whether to follow these recommendations at the upcoming spending review.”
The review highlights that students are being charged too much for a degree and it calls for the maximum fees level to be set at £7,500 beginning in 2021.
Currently, tuition fees are £9,250 a year.
The review states that the cap should be frozen until 2023 and it should then rise with inflation.
‘The lack of maintenance grants’
The president of the National Union of Students, Shakira Martin, said the move would help to address ‘debt aversion, living costs and the lack of maintenance grants’.
Critics say the move to extend loan repayments to 40 years could see graduates repaying their loans through their working life and into their 60s.
Also, a graduate would still be charged interest rates that are based on the current rate of inflation, plus 3%.
The review also highlights that repayments should begin at a lower threshold of £23,000 rather than £25,725 currently.
One of those who gave advice to those undertaking the review was the founder of MoneySavingExpert, Martin Lewis.
Reducing tuition fees
He said he was pleased with the outcome since reducing tuition fees would be a ‘psychological benefit for everyone’.
However, the only people to gain from the move, he says, would be those who are able to clear their debt in full, which usually means the highest earning graduates.
He told the Today programme: “Lowering the repayment threshold will see graduates paying £180 a year more and having to repay their student debt for most of their working life.
“What we will see is a slightly regressive change to a system so people are repaying longer and paying more each year.”
The wide-ranging report also says that non-repayable maintenance grants worth up to £3,000 every year should be reinstated for poor students.