The case for fairer fees

Sir Peter Lampl, Chairman of the Sutton Trust, explores the student finance crisis and how we could make the system fairer.

England is facing a student finance crisis. Disillusion with the fee system has been building for some time. Since the £9000 fees were introduced, Sutton Trust research has found that English students have by far the highest levels of debt in the English-speaking world, owing around £46,000 when they graduate.

When the government revised the system, turning maintenance grants into loans, this increased debt at graduation to around £50,000 on average – £57,000 for the poorest students. In turn, our research highlights that most graduates will not pay back this debt until well into middle age, with many never paying it back in full at all.

It is very welcome therefore, that there is now demand amongst the wider public, and in Westminster, for radical change. It is a scandal that a student from a council estate leaves university with higher debt than someone who went to a top boarding school. The current tuition fees regime simply isn’t fair and our young people deserve better.

However, no-one should be under any illusions that solving this issue is easy. The structure of university funding in this country is designed to share costs between the taxpayer and graduates, and between the present and the future. The loan system means that the costs of higher education are kept away from the nation’s balance sheet, and deferred 30 years into the future for another government to deal with. Constant changes to the terms of student loans have shown this to be an unpredictable and unsustainable arrangement.

While the Exchequer ostensibly benefits from a system where vast amounts of debt are imposed on young people which will never be paid back, we need to move towards a system where students come first. Better access to university should be at the heart of any system of student funding. That is why we want to tackle debts by lowering fees and increasing maintenance support for those who need it most.

Our latest research shows that student debt could be slashed by a half, with most benefits going to the least well-off, by introducing a fee system that fairly reflects ability to pay, and by restoring recently abolished maintenance grants. Means-testing would remove fees entirely for most households earning below average household income, and lead to lower fees for all but the highest earners. This would mean those from the poorest households would leave university with the lowest debt, turning the current situation on its head, and giving these young people a fairer deal.

The time has come for a change. It is right that graduates should contribute to the cost of their education, and they should share that cost with government. Means-testing fees and bringing back maintenance grants would offer an affordable and fair alternative both to the current system and opposition proposals to abolish fees outright.