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Government sets student fees cap at £9,000

Universities can triple tuition charges from 2012

Academic fees could be as high as £9,000 a year at some universities from 2012, following the government’s response to the Browne Review of Higher Education Funding. The current cap is £3,290. 


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The move to increase fees follows a reduction in university funding, outlined in the October Spending Review.

Tuition fees to rise

Academic fees at most institutions will be set at a new threshold of £6,000 a year. Universities will be permitted to charge more than this, to a ceiling of £9,000, but the government has stressed that these will be ‘exceptional cases’. In order to charge more than £6,000, institutions ‘will have to show how they will spend some of the additional income making progress in widening participation and fair access’. The Education Secretary, Michael Gove, has made it clear than this requirement will stop short of specified quotas.

Confirming the new fees threshold, David Willetts, Minister for Universities and Science said:

‘Good quality higher education is important in itself, but also to the economy in the long term delivering highly skilled and well educated employees to businesses. The current system of funding for universities is unsustainable and in need of reform.

‘This progressive package will put universities’ finance on a sustainable footing with extra freedoms and less bureaucracy. But in return there will be greater choice for students with a stronger focus on high quality teaching.’

Student maintenance loans and grants to increase

As well as taking a loan to meet academic fees, most students borrow an additional sum to pay for their accommodation and maintenance costs. The government has agreed to increase, to £5,500, the amount that can be borrowed by those with family incomes of between £42,000 and £60,000. It has also agreed to increase non-repayable maintenance grants, to £3,250, for those with family incomes of £25,000 or less. Those with family incomes of up to £42,000 will be eligible for a partial grant. Despite these measures, many students will need additional funding to meet their living costs. Student bank accounts with interest-free overdrafts can be particularly useful in these circumstances. Not all banks offer the same deal, so it pays to shop around and compare overdraft limits.        

Post-graduate repayments

As previously announced, student loans will continue to be repaid after graduation. The threshold for repayments to start will rise from £15,000 to £21,000. Once graduates reach this level of income, repayments will start to be made at 9% of all additional income. 

From 2012-13, interest will be charged on the outstanding balance of student loan, at RPI plus 3%. This is an increase to the current rate of interest, which is linked to RPI or Bank of England Base Rate. During 2010-11 the rate of interest will be 1.5%.    

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