View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Politics
  2. Education
13 September 2010

Tuition fee increase will hit middle-income graduates

Putting tuition fees up to £7,000 will leave middle-income graduates repaying up to £15,000 more tha

By Caroline Crampton

There has been concern expressed that raising tuition fees will deter students from applying to university, but new research suggests that a potential cutback on subsidised interest for student loans is where the real danger lies.

A report from the Social Market Foundation (SMF) has found that the proposed rise in tuition fees will leave middle-income graduates with much larger debts than their higher-paid contemporaries, as the increased fees bill will result in the government being forced to withdraw subsidised interest rates for student loans.

If, as expected, Lord Browne’s review of university fees and finances (due for publication on October 11) recommends lifting the cap on tuition fees from its current level at £3,290 to £7,000, the SMF research finds that the rise in fees will cost the government an additional £1.3bn a year under the current arrangement of subsidised interest rates on student loans.

As this is obviously unsustainable, the research predicts that interest rate subsidies and loan write-offs would have to be abolished in favour of commercial rates, which would penalise those middle-income graduates who take longer to pay back the entirety of their loan. The SMF estimates that it could leave some graduates paying back up to £15,000 more than their higher-earning counterparts, even if they originally did the same degree at the same university.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

In addition to the students and graduates who look likely to suffer under tuition fee increases, this issue is shaping up to be a major political challenge for the coalition. The publication of Lord Browne’s review on October 11 will be the first major test of its unity, for as my colleague Samira Shackle pointed out last week, opposing such an increase in the debt burden on students has long been a central policy for the Lib Dems. Their response to the publication of Lord Browne’s review will be a key indicator of how things stand within their party, and quite how long we might expect the coalition to hold up in its current form.

Content from our partners
The promise of prevention
How Labour hopes to make the UK a leader in green energy
Is now the time to rethink health and care for older people? With Age UK

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU