The consequences of the recent government’s reforms in higher education, namely the increase in tuition fees to a maximum of GBP 9 000/year (approx. EUR 11 190), have been addressed in various recent reports focusing on different perspectives of the issue: the financial consequences of the reforms for the government itself, the potential effects on student demand (applications to universities) and the effectiveness of new initiatives to support disadvantaged students’ access to higher education.

A report released at the end of October by the Higher Education Policy Institute (HEPI) argues that the government’s reforms will not result in taxpayer savings. Even though justifications for the introduction of the reforms in England included decreasing public expenditure and government borrowing, the authors of this report argue that the government revenue expectation “still depends on highly uncertain and optimistic assumptions” and that the justification for the introduction of the higher education reforms “does not stand up”. The report proposes that the new tuition fees policy will most likely not result in taxpayer savings and that probably one or more of the following situations will arise:  future tax payers will need to pay more, other parts of the higher education budget will need to be cut, student numbers will have to be further reduced, or former students will have to pay more. However, there are still not enough data to assess, unequivocally, the real costs of the government’s policies. The only hard data now available are the fees universities are charging. Data on the “exact distribution of fees, how many students take out loans and how much they borrow over their course” are not yet known as the first repayments only start in 2016.

Another recent report from the HEPI shows that there is no evidence yet suggesting that the tuition fee hike in England has resulted in a decrease in students’ university applications. Although a recent UCAS report estimated that less 15 000 of the expected 18 year-old student cohort applied to university, the HEPI report suggests this figure should be regarded as an “upper bound” and that the “temporary disturbances to the patterns of applications and entry” do not necessarily have predictive value on long-term changes in demand. The report argues that more data and more time are needed in order to have a full and reliable picture of the potential changes in demand.

Finally, a report issued this month by the Institute for Fiscal Studies addresses the potential effectiveness of a recent measure introduced by the government to offset the potential detrimental effects of the tuition fee hikes on university applications of disadvantaged students – the National Scholarship Programme (NSP). This programme was introduced for students starting university in the academic year of 2012/13. It replaces the old bursary system and aims to support students from disadvantaged backgrounds by providing fee waivers, cash bursaries and campus discounts. In its first year, the NSP will cost the government GBP 50 million (EUR 60 million). Drawing on information of tuition fees and financial support packages from 90 English universities, the authors show that the new programme is more complex than the previous one and that disadvantaged students are less likely to know in advance what kind of support they will receive. Such findings have led to the questioning of the effectiveness of the NSF in increasing the participation of students from poorer backgrounds. 

HEPI – The cost of the Government’s reforms of the financing of higher education

HEPI – The impact on demand of the Government’s reforms of higher education

Institute for Fiscal Studies