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7 November 2014updated 09 Jun 2021 2:14pm

What’s behind the surprising success of raising tuition fees?

Disadvantaged pupils are not put off by the rise in fees; demand for studying at university is now at a record high.

By Tim Wigmore

Four years ago, tuition fees were trebled. Effigies of Nick Clegg, the man who broke his promise and made university the preserve of the rich, were burned.

Today, Clegg is more unpopular than ever. Yet his most derided policy has been vindicated. Fears that disadvantaged students would be priced out of university have emphatically not materialised.

As a new UCAS analysis of the effects of the tuition fee rise asserts, demand for studying at university is now at a record high. That is also true of the most disadvantaged pupils – including at the best-performing universities, which are most likely to charge students the full £9,000 a year.

UCAS entry rates to higher education for 18 year-olds from the most disadvantaged neighbourhoods of England have now reached 17 per cent. Those from the most advantaged neighbourhoods remain 7.5 times more likely to go to elite universities (around the top 40) than those from the least disadvantaged neighbourhoods, but the gap has never been lower. However slowly, the best universities are being opened up.

One explanation is that a combination of the economic crisis and wider socioeconomic trends mean young people judge that it has never been more difficult to find a good job without a degree. Decades of university access work are also paying off. Research from the Office for Fair Access has emphasised the importance of targeted, sustained outreach from an early age in boosting application rates. 14,230 students on free school meals in England applied for a place on a degree course in 2014, compared with 8,720 six years ago. Perhaps surprisingly, increased bursaries have not been behind the increase.

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In an important respect, the new fees system is more progressive. Loans for tuition fees are now only paid back on annual income above £21,000, compared to £15,000 under the old regime. To an extent doing a degree has therefore become less of a financial risk – if it doesn’t help you get a decent job you don’t have to pay back. A new graduate on a salary of £21,000 would have paid back £540 a year under the old system, but would not pay anything back today.

Despite this surprising success, considerable problems still exist with tuition fee policy. The system is only progressive up to a point. Because interest rates of up to three per cent above inflation are added onto loans, someone whose salary rises to £50,000 a year would have to pay over £30,000 more over their careers than someone who earns £100,000 a year, and can pay off their loan far earlier.

On its own terms, the tuition fees policy is perilously close to failing. It was sold partly as a necessary cost-saving measure in an age of austerity, but it could turn out to be more expensive than the previous system. The original funding model forecast that 28 per cent of student loans would never be paid back. The latest estimates are that 45 per cent of loans will not be, because graduates have found it harder to get well-paid employment than envisaged. If that figure reaches 47 per cent, the government will lose more money under the new system than the previous one.

While the tuition fee reforms have proved more profligate than expected, they can be considered a modest progressive success. The doom-mongers have been proved wrong. If the Lib Dems did not consider any mention of tuition fees off limits, after the song mocking Clegg’s tuition fees apology two years ago received nearly three million views, they would be shouting about it.

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