Tuition fee rise fails to address financial instability in higher education, critics argue

A modest increase in tuition fees in England, announced by Education Secretary Bridget Phillipson on November 4, has sparked debate about its efficacy in tackling the mounting financial challenges faced by the higher education sector.

While the rise will link fees to inflation for the first time since 2017, critics argue that this move does little to address the sector’s deep-rooted financial instability.

The increase will see tuition fees rise by £285 annually, bringing the total fee to £9,535.

However, this modest uplift is dwarfed by the escalating costs universities face, including a £400 million burden resulting from higher national insurance contributions, announced in the latest budget.

Limited Financial Relief for Universities

Nick Hillman, director of the Higher Education Policy Institute, warned that the fee rise is insufficient for universities “even to stand still – unless there are also to be extra government grants via the Office for Students.”

Without additional support, concerns about financial instability are likely to persist, he added.

For institutions like the University of the West of England, the numbers highlight the insufficiency of the increase.

Vice-Chancellor Sir Steve West revealed that while the fee rise might generate £1.5 million in its first year, the university faces an additional £4 million in national insurance costs.

This leaves a significant shortfall, forcing the institution to find an additional £2.5 million in savings and halt projects such as a £120 million health facility.

The Long Freeze and Its Consequences

Tuition fees in England have been frozen at £9,250 since 2017. Adjusted for inflation, this amount is now worth just £5,924 in 2012-13 terms.

Universities UK had earlier proposed linking fees to inflation and gradually increasing them to £10,500 by the end of the Parliament.

However, such increases remain politically contentious, with fears of student backlash and affordability concerns dominating the discourse.

The steady increase in participation rates following the 2012 fee hike suggests that higher fees alone do not necessarily deter students.

However, this trend may face challenges amid the current cost-of-living crisis.

Projections of a 350,000 increase in student numbers by 2035 have been described as "unrealistic," with growing financial pressures likely to influence decisions about pursuing higher education.

Broader Implications and Sector Reforms

Diana Beech, chief executive of London Higher, welcomed the fee increase as a step in the right direction but cautioned that it risks being overshadowed by rising costs for employers, particularly the hike in national insurance contributions.

She emphasised the importance of ensuring that prospective students do not feel “priced out of the opportunity to embark on higher education.”

While the increase in fees is accompanied by a rise in maintenance loans, even small additional costs could dissuade some applicants from enrolling.

Dr. Beech stressed the need to consider the impact on accessibility and to avoid undermining participation in higher education.

Sir David Bell, vice-chancellor of the University of Sunderland, described the announcement as a “positive development” but acknowledged its limitations.

He called for a substantial rethink of the higher education system to ensure it works effectively for students, universities, and society. Such reforms are expected to be outlined in the spring.

Demands for universities to do more

The government’s announcement also included an expectation that universities deliver more in areas such as widening access, civic engagement, and value for money.

Jess Lister, associate director at Public First, noted that while the fee increase provided “a little,” it also demanded “a lot” from universities, requiring a re-evaluation of their approach in several key areas.

If you are interested in letting your property to students, accommodationforstudents.com is the no.1 student accommodation service in the UK.