University tuition fees set to increase to £9,535 annually
Bridget Phillipson assured graduates that their repayments would not increase once they start working and reach the income threshold.
Undergraduate home tuition fees in England will increase in line with inflation to £9,535 a year from April 2025, confirmed Secretary of State for Education Bridget Phillipson.
Phillipson made this announcement in the House of Commons, stating that the £285 per academic year increase was necessary to “fix the foundations” and “secure the future of higher education.”
This marks the first tuition fee increase in eight years, following a freeze at £9,250 in 2017 by the Conservatives under Prime Minister Theresa May.
To help students with living costs, the maximum maintenance loan will also increase in line with inflation, potentially providing an extra £414 per year for students from low-income families, according to the Department for Education.
A lower fee limit of £5,760 will be introduced for foundation degrees in classroom-based subjects like business, social sciences, and humanities.
Phillipson addressed the Commons, emphasizing the importance of not only keeping tuition fees low but also ensuring students can afford to support themselves while studying.
No Higher Monthly Payments
Ahead of the fee increase announcement, Downing Street highlighted the severe financial challenges faced by universities.
The prime minister’s spokesperson noted, “Universities have experienced a significant real terms income decline, with the gap between disadvantaged students and their peers reaching record levels.”
“The government is committed to making tough decisions to secure universities’ financial stability, which in turn will create more opportunities for students and drive economic growth,” the spokesperson added.
Addressing concerns about the fee hike, Phillipson assured that graduates would not face higher repayment amounts once they reach the £25,000 income threshold for repayments.
She pledged, “When you start repaying your loan, you will not experience increased monthly repayments due to these fee and maintenance loan changes.”
Phillipson further explained, “Student loans do not operate like consumer loans; monthly repayments are based on earnings, not just the borrowed amount or interest rates. Any outstanding balance, including accrued interest, will be written off at the end of the loan term.”
“Raising the fee cap was a challenging decision, but graduates will not pay more each month when they start repaying their loans,” confirmed Phillipson.
‘Debt-Fuelled System’
Universities are under financial strain, with predictions of closures and mergers becoming commonplace in the future.
Given the sectorwide challenges, the new government has assigned the Office for Students the task of monitoring the financial sustainability of higher education providers.
Phillipson emphasized that universities must manage their finances responsibly to ensure sustainability.
Universities UK (UUK) welcomed the fee increase, calling it a necessary step.
UUK Chief Executive Vivienne Stern stated that the freeze on fees for nearly a decade had significantly eroded the real value of student fees and maintenance loans, making it unsustainable for both students and universities.
While Iain Mansfield from the Policy Exchange think tank questioned the rationale behind increasing student debt without reforms in teaching quality and contact hours.
“Today’s decision reinforces the current debt-fuelled system that fails to support young people or provide the necessary skills for the economy,” Mansfield remarked.
‘War’ on Students
In the Commons, shadow education secretary Laura Trott criticized the announcement as another attack by the Labour government on taxpayers.
Trott expressed concerns about the inflationary impact on students, especially at a time when they can least afford it.
“Once again, this was not mentioned in the Labour manifesto,” added the shadow minister.
PA Media contributed to this report.
