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Sunday, November 09, 2008

Some good news

If the Sunday Times is right then beleaguered students may have some good news next year. The paper reports on a speech by David Eastwood, the chief executive of the Higher Education Funding Council for England in which he urges universities to dampen their expectations with regards to the current £3,145 cap on University Tuition Fees.

Mr. Eastwood told HEFCE’s annual general meeting in London, that it is "inconceivable that the cap will rise significantly before 2013.”

Because raising the cap would require students to take out bigger student loans, this could result in a considerable extra cost to the Government because it subsidises the loans by pegging them to inflation.

The London School of Economics has estimated that if tuition fees and student loans were raised to £5,000 a year, the projected cost to the Treasury of subsidising student loans would increase to £1.5 billion. Fees of £8,000 would push the cost to £2 billion.

Professor Eastwood’s comments suggest that the Government would be unable to afford any extra subsidies while the conditions of the financial crisis remain. “Wider constraints make it unlikely that the cap would be raised in the near future,” he said. His comments provide the strongest suggestion yet that the 2009 review of tuition fees is unlikely to report until after the next general election, possibly in 2010. That would give the Government another three years to consult on and introduce legislation to increase fees by 2013.

Although this is a devolved issue such a decision in England will make life much easier for the Welsh Assembly Government as well. Fees do exist in Wales, it is just that the Government pay them on behalf of Welsh students attending Welsh Universities. If fees went up in England then it is inconceivable that Welsh HEIs would be prevented from following suit. After all half of their students come from the other side of Offa's Dyke and any attempt to restrict their income would prevent Universities here from keeping up with their English counterparts.

The dilemma facing the Welsh Government would be whether they could afford to keep the present regime by paying the increased amount on behalf of Welsh students. I would argue that they should but that decision may well be deferred now for another five years.

The other side of this coin is that a freeze on fees may well give the Welsh Government the opportunity to address the fact that Welsh Universities get £41 million a year less than their English counterparts with which to deliver education and research.

Meanwhile, we should not forget the bad news: a survey for NatWest bank has calculated that the actual cost of completing a degree is much higher than the £20,000 estimated by the National Union of Students, at about £33,500. This includes fees, rent, food and luxuries such as alcohol and cigarettes.


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