{"id":74764,"date":"2024-11-05T22:59:45","date_gmt":"2024-11-06T03:59:45","guid":{"rendered":"https:\/\/world.edu\/?p=74764"},"modified":"2024-11-05T22:59:46","modified_gmt":"2024-11-06T03:59:46","slug":"english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis","status":"publish","type":"post","link":"https:\/\/world.edu\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\/","title":{"rendered":"English tuition fees rise \u2013 but it\u2019s nowhere near enough income to solve universities\u2019 financial crisis"},"content":{"rendered":"<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter size-full wp-image-74765\" src=\"https:\/\/world.edu\/wp-content\/uploads\/2024\/11\/UKUniStudents.jpg\" alt=\"\" width=\"680\" height=\"409\" srcset=\"https:\/\/world.edu\/wp-content\/uploads\/2024\/11\/UKUniStudents.jpg 680w, https:\/\/world.edu\/wp-content\/uploads\/2024\/11\/UKUniStudents-250x150.jpg 250w\" sizes=\"(max-width: 680px) 100vw, 680px\" \/><\/p>\n<p>UK education secretary Bridget Phillipson has announced that university tuition fees in England are\u00a0<a href=\"https:\/\/educationhub.blog.gov.uk\/2024\/11\/04\/student-fees-and-maintenance-loan-increase-what-you-need-to-know\/\">set to rise<\/a>\u00a0next academic year, with the maximum fee increasing by\u00a0<a href=\"https:\/\/www.gov.uk\/government\/news\/higher-education-reform-to-back-opportunity-and-protect-students\">\u00a3285 to \u00a39,535<\/a>. This will be the first increase in university education for domestic undergraduate students since 2017, when fees were raised to \u00a39,250.<\/p>\n<p>The additional income is sorely needed. Data from the\u00a0<a href=\"https:\/\/ifs.org.uk\/sites\/default\/files\/2024-06\/Higher-education-finances.pdf\">Institute for Fiscal Studies<\/a>\u00a0shows that the money spent on undergraduates\u2019 education has been declining in real terms. On average, \u00a39,600 was allocated per UK undergraduate student in 2023-24, compared to almost \u00a312,000 in 2012-13. On the other hand, other educational stages \u2013 early years and primary education \u2013 have seen real term increases since 2012.<\/p>\n<p>Had fees been linked to inflation since their raise to \u00a39,000 in 2012, they would have reached nearly\u00a0<a href=\"https:\/\/www.bbc.co.uk\/news\/live\/c0qdgndz5wzt?post=asset%3A175195fc-32c7-4ee9-a240-b1c40a8f43f1#post\">\u00a315,000<\/a>\u00a0by now.<\/p>\n<p>At some point, fewer resources translate into lower quality. Universities have continually been asked to do more with less.<\/p>\n<p>As such, they have adapted to the conditions of the market by increasing recruitment of international students, whose annual fees often exceed \u00a320,000. This was a rational response to domestic capped prices. But recent visa restrictions and shifting international policies have affected this strategy.<\/p>\n<h4><strong>Financial struggles<\/strong><\/h4>\n<p>At the same time, continually rising operational costs due to inflation, staff salaries and increased pension payments have, as of November 2024, led to over 70 UK universities announcing\u00a0<a href=\"https:\/\/qmucu.org\/qmul-transformation\/uk-he-shrinking\/\">staff restructuring and redundancies<\/a>. Next year\u2019s increase in employer national insurance contributions will raise costs further.<\/p>\n<p>In the academic year 2022-23, a\u00a0<a href=\"https:\/\/www.hesa.ac.uk\/data-and-analysis\/finances\/kfi\">third of higher education providers<\/a>\u00a0had ready funds to last them less than 100 days. A similar number\u00a0<a href=\"https:\/\/www.hesa.ac.uk\/data-and-analysis\/finances\/statements\">brought in less money<\/a>\u00a0than they spent over the year.<\/p>\n<p>The next survival step is likely institutional mergers and closures. But these are steps that are often poorly received politically \u2013 and with good reason.<\/p>\n<p>Universities are anchoring institutions in the towns and cities where they are located. They are often among an area\u2019s largest employers and contribute to local economies by bringing students and their spending to local shops and services. A university closure would have huge potential economic ramifications for an area. Avoiding this is a key concern for any government.<br \/>\n<center><\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">We&#39;re fixing the foundations of higher education to deliver change for students. <a href=\"https:\/\/t.co\/xKimhh1nSY\">pic.twitter.com\/xKimhh1nSY<\/a><\/p>\n<p>&mdash; Bridget Phillipson (@bphillipsonMP) <a href=\"https:\/\/twitter.com\/bphillipsonMP\/status\/1853481526790422588?ref_src=twsrc%5Etfw\">November 4, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/center><\/p>\n<p>Current and prospective students are unlikely to be enthusiastic about increased fees, minor as they are. Perhaps better news is that maintenance loans are also set to increase by 3.1%, adding an extra \u00a3400 per year to maximum loan amounts. This means students can borrow more to cover their living costs.<\/p>\n<p>However, maintenance loans have also not kept up with inflation. Accommodation costs have increased drastically and consume a large proportion of the maintenance budget, especially for those in university cities such as Bristol, Leeds and Nottingham where\u00a0<a href=\"https:\/\/www.hepi.ac.uk\/wp-content\/uploads\/2023\/10\/Student-accommodation-costs-across-10-cities-in-the-UK.pdf\">rent prices exceed \u00a37,500<\/a>\u00a0a year.<\/p>\n<p>This leaves very little to live on even if a student qualifies for the highest maintenance loan available for those studying outside London. This was \u00a310,227 in 2024-25 and will rise to \u00a310,544 in 2025-26.<\/p>\n<h4><strong>Student debt<\/strong><\/h4>\n<p><a href=\"https:\/\/researchbriefings.files.parliament.uk\/documents\/SN01079\/SN01079.pdf\">Average student debt<\/a>\u00a0\u2013 calculated as three years\u2019 worth of fees and three years\u2019 average maintenance loans \u2013 would rise, by my calculation, from \u00a349,000 to \u00a351,000 under the proposed changes.<\/p>\n<p>The government currently\u00a0<a href=\"https:\/\/explore-education-statistics.service.gov.uk\/find-statistics\/student-loan-forecasts-for-england\">forecasts that 65%<\/a>\u00a0of students starting a course in 2023-24 will repay their loan in full. If fees rise but monthly repayments stay the same, and no further changes are made, fewer students will repay their loans in full.<\/p>\n<p>Perhaps the greatest danger of rising tuition fees, now and in the future, is that higher lifetime debt repayments will\u00a0<a href=\"https:\/\/www.jstor.org\/stable\/26362000\">put people<\/a>\u00a0from disadvantaged backgrounds off going into higher education.<\/p>\n<p>With a lower repayment threshold and (<a href=\"https:\/\/www.theguardian.com\/money\/2022\/feb\/24\/students-in-england-to-pay-back-loans-over-40-years-instead-of-30\">since 2022<\/a>) a 40-year repayment period, some students from disadvantaged backgrounds may be put off by the risk of carrying debt for most of their working lives, as\u00a0<a href=\"https:\/\/www.jstor.org\/stable\/26362000\">some evidence<\/a>\u00a0suggests may have already happened since the introduction of tuition fee loans. They may baulk at a reduction of their disposable income and possibly limited opportunities for upward mobility. The psychological impact of the fees might be much more adverse than the financial impact.<\/p>\n<p>However, graduating continues to have a substantial\u00a0<a href=\"https:\/\/assets.publishing.service.gov.uk\/media\/5b1906e540f0b634b73dbeb6\/The_relative_labour_market-returns_to_different_degrees.pdf\">earnings benefit<\/a>. This is not only for those from traditional university-going, wealthier backgrounds, but also for students\u00a0<a href=\"https:\/\/assets.publishing.service.gov.uk\/media\/605c82eb8fa8f545d701e70e\/The_returns_to_undergraduate_degrees_by_socio-economic_group_and_ethnicity.pdf\">from disadvantaged groups<\/a>\u00a0with the lowest earnings.<\/p>\n<p>The value of education, including going to university in particular, has been shown\u00a0<a href=\"https:\/\/openknowledge.worldbank.org\/entities\/publication\/604f36b2-3890-5fbe-929c-6576f29dd109\">time and time<\/a>\u00a0again to have strong positive effects on earnings.<\/p>\n<p>The uncomfortable truth is that an additional \u00a3285 on tuition fees in September 2025 is little more than a temporary solution until a longer-term, urgently needed, plan is put in place. This is something the government is\u00a0<a href=\"https:\/\/hansard.parliament.uk\/Commons\/2024-11-04\/debates\/76221982-95A9-4F6F-854A-CBFA301F35C8\/HigherEducationReform\">promising will be announced<\/a>\u00a0in the coming months.<\/p>\n<p>The choice of policy options for such a long-term plan remains the same as before. The government could increase tuition fees further and link them to inflation directly. It could increase direct grants to universities through more taxation. It could loosen migration policy to encourage higher overseas fee-paying students. Or do some combination of the above.<\/p>\n<p>In the modern developed world, a healthy supply of graduate labour and a thriving higher education sector are vital for a prosperous and growing developed economy. The government\u2019s announcement is a start in safeguarding both, but much bigger decisions will need to be taken in the near future if the higher education sector is to get back to a firm financial footing.<\/p>\n<p><em><strong>Author Bio:<\/strong> Franz Buscha is Professor of Economics at the University of Westminster<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>UK education secretary Bridget Phillipson has announced that university tuition fees in England are\u00a0set to rise\u00a0next academic year, with the maximum fee increasing by\u00a0\u00a3285 to \u00a39,535. This will be the first increase in university education for domestic undergraduate students since 2017, when fees were raised to \u00a39,250. The additional income is sorely needed. Data from [&hellip;]\n&hellip; <a href=\"https:\/\/world.edu\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\/\" class=\"more\">learn more&rarr;<\/a><\/p>","protected":false},"author":33,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[29],"tags":[1996],"coauthors":[11733],"class_list":["post-74764","post","type-post","status-publish","format-standard","hentry","category-higher-education","tag-financial-crisis"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>English tuition fees rise \u2013 but it\u2019s nowhere near enough income to solve universities\u2019 financial crisis - World leading higher education information and services<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/world.edu\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:locale\" content=\"en_US\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:type\" content=\"article\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:title\" content=\"English tuition fees rise \u2013 but it\u2019s nowhere near enough income to solve universities\u2019 financial crisis - World leading higher education information and services\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:description\" content=\"UK education secretary Bridget Phillipson has announced that university tuition fees in England are\u00a0set to rise\u00a0next academic year, with the maximum fee increasing by\u00a0\u00a3285 to \u00a39,535. This will be the first increase in university education for domestic undergraduate students since 2017, when fees were raised to \u00a39,250. The additional income is sorely needed. Data from [&hellip;]\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:url\" content=\"https:\/\/world.edu\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:site_name\" content=\"World leading higher education information and services\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"article:published_time\" content=\"2024-11-06T03:59:45+00:00\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"article:modified_time\" content=\"2024-11-06T03:59:46+00:00\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:image\" content=\"https:\/\/world.edu\/wp-content\/uploads\/2024\/11\/UKUniStudents.jpg\" class=\"yoast-seo-meta-tag\" \/>\n\t<meta property=\"og:image:width\" content=\"680\" class=\"yoast-seo-meta-tag\" \/>\n\t<meta property=\"og:image:height\" content=\"409\" class=\"yoast-seo-meta-tag\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" class=\"yoast-seo-meta-tag\" \/>\n<meta name=\"author\" content=\"Kevin\" class=\"yoast-seo-meta-tag\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" class=\"yoast-seo-meta-tag\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kevin\" class=\"yoast-seo-meta-tag\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" class=\"yoast-seo-meta-tag\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" class=\"yoast-seo-meta-tag\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/world.edu\\\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/world.edu\\\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\\\/\"},\"author\":{\"name\":\"Kevin\",\"@id\":\"https:\\\/\\\/world.edu\\\/#\\\/schema\\\/person\\\/42c1c1d5ff7ffbdf0bd50ed94c6ae6ee\"},\"headline\":\"English tuition fees rise \u2013 but it\u2019s nowhere near enough income to solve universities\u2019 financial crisis\",\"datePublished\":\"2024-11-06T03:59:45+00:00\",\"dateModified\":\"2024-11-06T03:59:46+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/world.edu\\\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\\\/\"},\"wordCount\":920,\"image\":{\"@id\":\"https:\\\/\\\/world.edu\\\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/world.edu\\\/wp-content\\\/uploads\\\/2024\\\/11\\\/UKUniStudents.jpg\",\"keywords\":[\"financial crisis\"],\"articleSection\":[\"Higher Education\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/world.edu\\\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\\\/\",\"url\":\"https:\\\/\\\/world.edu\\\/english-tuition-fees-rise-but-its-nowhere-near-enough-income-to-solve-universities-financial-crisis\\\/\",\"name\":\"English tuition fees rise \u2013 but it\u2019s nowhere near enough income to solve universities\u2019 financial crisis - 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This will be the first increase in university education for domestic undergraduate students since 2017, when fees were raised to \u00a39,250. The additional income is sorely needed. 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