Students to face unlimited fees

Universities should no longer face limits on how much they should charge, says Lord Browne’s report

Universities in England should be able to charge unlimited fees, a major review of university funding has recommended.

Lord Browne’s review calls for the £3,290 cap on fees, which students borrow in loans, to be scrapped.

Instead it proposes a free market in fees – setting out models of charges up to £12,000 a year for a degree course.

The UCU lecturers’ union said the plan was “the final nail in the coffin for affordable higher education”.

However, Lord Browne’s review makes clear that universities that charge more than £6,000 a year would lose a proportion of the fee to help cover the cost of student borrowing.

Ministers will now have to the proposals for reforming university funding – with the threat of a Liberal Democrat backbench rebellion.

Increasing fees would mean a direct reversal of personal pledges made at the election by Liberal Democrat MPs – and will cause deep political difficulties for the coalition government.

The Liberal Democrats own youth section has branded the fee rise as a “disaster”.

The far-reaching proposals set out a system in which much of the cost of university places would be transferred from the taxpayer to the student.

It seeks to balance much higher charges with support for applicants from poorer families.

This more competitive market would also mean that for the first time universities could go out of business, says the report.

Universities must compete over students, fee levels and against new providers, says Lord Browne. “If they fail… they might ultimately close or be taken over.”

Lord Browne proposes that the government would guarantee to underwrite fees up to £6,000 per year – but universities would be allowed to charge any amount above that.

“There is no robust way of identifying the right maximum level,” says Lord Browne.

Universities would have to pay an increasing “levy” on fees above £6,000 – but even when charging £12,000, universities will be able to keep almost three quarters of the fee.

As now, students would not have to pay fees up-front, but would receive a loan.

But they would not have to start repaying it until their earnings reached £21,000 per year, up from the current level of £15,000.

Lord Browne outlines a competitive system in which universities could be taken over or shut down

The report recommends that students should pay higher interest rates on these loans, set at the government’s rate of borrowing – currently 2.2% – plus inflation.

All students will be able to borrow £3,750 per year – and young people from families earning less than £25,000 will receive a further £3,250.

There have been warnings that middle-income families will face a particular financial squeeze from such a fee hike.

“There is a feeling that the rich can afford it – and the poor will quite rightly be protected – but people in the middle could find themselves really penalised,” says Justine Roberts of the Mumsnet website.

There are also radical proposals to shake-up how higher education is administered.

Four separate funding bodies and regulators – including the higher education funding council and the fair access watchdog – should be merged into a single Higher Education Council, says the report.

This would take over responsibility for standards, strategic subjects, access for poorer students and resolving disputes with students.

There are also steps to ensure the quality of degree courses.

University lecturers should be required to have teaching qualifications – and students should reach a minimum threshold of qualifications before receiving student loans.

This summer saw an unprecedented demand for places – with thousands of well-qualified students missing out on places.

The report calls for the number of places to be expanded by 10% over three years.

But it calls for an end to across-the-board funding for more places – and says that extra places should be in response to demand.

There are also suggestions for a more diverse university system, which would encourage the introduction of new providers and different ways of studying.

Part-time students and those studying in private universities would be able to claim student support.

Paul Marshall, head of the 1994 Group of research-intensive universities, welcomed the review as “the first progressive step” towards increasing funding for universities and “targeting student support more effectively at those in most need”.

But the Million+ group of new universities says it will deter poorer students.

“Fees at this level – even if they are backed by state-funded fee loans – will undoubtedly mean that some students who would have gone to university will decide not to go,” said chief executive, Pam Tatlow.

The National Union of Students said students would be left with “crippling levels of debt and many universities face utter devastation as a result of horrific cuts”.

“To make the next generation pick up the bill for cuts and force students to pay even more for less would be both unsustainable and unjust.”

Elsewhere in the UK, Scottish students studying in Scotland do not have to pay any fees. In Northern Ireland and Wales, fees are charged up to a maximum of £3,290.

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