Funding Factsheet

Higher Education Funding is a big issue, even when you just focus on Undergraduate Students from the UK there are still a lot of factors to consider and a lot of jargon to understand. Fortunately we’ve put together a handy fact sheet that outlines the three main proposed models for Higher Education Funding for Home UG students.

  Free Education Tuition Fees Graduate Tax
Description
Free Education is in many ways exactly what it suggests; Higher Education that is free to the student and is paid for entirely from State Funding. Tuition Fees is the system that we currently have whereby there is a set price for University with a government cap on the maximum fee. Students are able to get a loan to cover this cost which is paid back only after their salary exceeds a certain amount. A Graduate Tax is a proposed system where those that graduate from University would pay a fixed additional percentage of their income over a certain value for a set number of years to pay the government back for covering the cost of education.
Pros
  • No fee paid by the student
  • No financial barrier to entry
  • Lower financial burden on state/taxpayer
  • Portion of fees must be used for 'Widening Access'
  • Universities forced to compete for top students
  • No upfront payment required from student
  • Lower financial burden on state/taxpayer
  • No upfront payment required from student
  • Most of the benefits of Tuition Fees with less perception of debt
  • No 'growing interest' on debt
Cons
  • Significant cost to the state/taxpayer
  • Set number of places at universities funded leading to potential stagnation
  • Students may leave University with large debts
  • Fees have increased 3 fold and may rise higher
  • Hard to administer particularly people leaving the country
  • Potential significant 'unseen' cost of degree
Discussion
Many people would argue that free education is the only really fair way to guarantee access to everyone, however others would say it is far too expensive to the nation. It can also be said that with the fixed number of places funded at universities, institutions will not feel the need to compete for top students – only to fill their allocated spaces leading to less Universities offering a top education. It can be argued that Tuition Fees have broadened access to education significantly. Though that may be to do with a change in attitude more than Fees. What is clear is that with £9000 tuition fees many students will end university with over £50,000 of debt. And if fees became uncapped this would be even more. The repayments of loans have also always failed to meet government targets so it continually costs more than expected. Graduate Tax is intended to have most of the benefits of Tuition Fees with less perception of debt. Proponents of the system will say that there is no fixed price tag and you only pay for it if you can afford to. However, detractors will point out that it leaves you open to a large ‘debt’ that you can’t know the size of and that the system will likely be even harder to forecast than the Tuition Fee System.
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