Tuition fees announced to rise from 2017

Tuition fees have been announced to rise from 2017 by Universities and Science Minister, Jo Johnson. This change in the fee rate is expected to apply only to universities which offer high quality teaching, however.

The institutions which this is applicable to shall be announced over the next academic year. What the government considers to be high quality teaching will be in line with the yet unreleased Teaching Excellence Framework (TEF), something which the government hopes to introduce over the next four years.

Johnson suggests that TEF assessments may be made with reference to a peer review panel, evidence submitted by the provider, and results from the National Student Survey, retention, the number of graduates who have been employed or sought further study, and a high skilled employment metric. It was also stressed that assessments “will explicitly take into account outcomes for disadvantaged groups”.

The government white paper, Success as a Knowledge Economy, has said that a fee raise in line with inflation shall incentivise high quality teaching within higher education, and will help to project the financial stability of the sector.

In 2014/15, the University of Kent received a total income of £234.7m, and in 2015, had a surplus of £11.7m. This was an increase of £5m on the 2013/14 academic year.

These fee changes are also expected to bring the sector £1b per year over the course of the first ten years the TEF system is in place.

Supporting the white paper, Dame Julia Goodfellow, Vice-Chancellor of the University of Kent, but speaking in her role of President from Universities UK, said:

“We support the government’s aim to protect the interests of students, increase fairness and demonstrate the value of a university education. The university sector is an international success story in terms of the quality of teaching and research. It is important that any reforms recognise this and build on that strength.

“We are pleased that government has listened to the views of universities on their plans for a Teaching Excellence Framework. Universities will work with the government to see how this can best add value to all students, whatever their choice of subject or university.”

Justifying the fee rise, the paper includes, “TEF is intended to generate reputational as well as financial incentives. The reputational advantage that will accrue to providers achieving the highest TEF ratings will be substantial, particularly given this Government’s removal of student number controls. But we think that teaching excellence should be recognised by providing for the best providers to maintain their tuition fees in line with inflation. The higher tuition fee cap was set at £9,000 per year for full time students in 2012, which is now £8,546 in real terms. It remains at that level, which means that in real terms its value to providers – and thus their ability to fund excellent quality teaching for students – has decreased.”

This means that universities will undergo ratings akin to those of schools through the Ofsted system; the argument presented being that universities will be able to hold a TEF rating of ‘meets expectations’, ‘excellent’ and ‘outstanding’ alongside university league table rankings. Once more like Ofsted, universities will be rated under TEF every three years.

Furthermore, to encourage high levels of teaching, universities will be able to increase the £9,000 tuition fees charged to students in line with inflation. This is something which will become particularly significant for students starting university in 2019 when the government plans to implement more significant financial incentives.

Any university when reaches a ‘meets expectations’ rating will benefit from “50% of the inflationary uplift”, while institutions with rankings of ‘excellent’ or ‘outstanding’ will gain “100% of the inflationary uplift”. Should a university’s rating fall, the university will be forced to lower the fees charged to existing students in accordance with the inflation charges allowed by the particular ranking. Any university which falls below the baseline quality threshold will lose any TEF ranking. This will allow universities to charge different levels of fees.

One important point in the government’s changes to fees, is that this proposal will only allow universities to charge more in line with inflation as raising the fee cap of £9,000 would require proposed changes to pass through Parliament. Page 52 of the paper does, however, succinctly state, “we will shortly announce the fee caps for 2017/18”.

On the changes to fees, NUS VP (Higher Education), Sorana Vieru, said: “Students will understandably be outraged at any suggestion universities could be allowed to put fees up even higher in order to improve teaching quality. It was only four years ago tuition fees were trebled and students now face debts up to £53,000 when they graduate.

“Universities, students and staff have all been very clear the proposed Teaching Excellence Framework should not be linked to any rise in fees and the influential BIS Select Committee urged the government to do some serious rethinking before taking this forward. The government should urgently reflect on this and drop this muddled proposal.”

Beyond raising tuition fees, the white paper has also proposed the creation of new universities. Johnson argues that the current higher education system “protects incumbent providers from competition” and that new institutions are forced to wait too long to gain degree awarding powers based.

Instead, under these proposals, new institutions would be streamlined into achieving university status and be able to award degrees to their students. These new universities would face ‘proportionate oversight’, and should the quality of teaching fall, regulatory action would take place. Johnson takes the position that this would give students more choice, fair access and value for money in higher education through the introduction of innovative and flexible institutions.

He stated: “Our universities are engines of economic growth and social mobility, but if we are to remain competitive and ensure that a high-quality education remains open to all, we cannot stand still. Making it easier for high-quality challenger institutions to start offering their own degrees will help drive up teaching quality, boost the economy and extend aspiration and life chances for students from all backgrounds.”

Three tiers of universities would be introduced. The first, ‘registered’ status universities, would be recognised as a higher education institution, but would not be able to access government funding, student support, of a tier four licence (which relates to international students). These institutions would have to meet the academic standards described withing the Framework for Higher Education Qualifications, and subscribe to the Office of the Independent Adjudicator (who is the student complaints body).

The second tier, ‘approved’ status institutions, would allow universities to set their fees at any level, but students would only be able to access £6,000 in tuition fee loans each year. The institutions would have to meet the standards of the Quality Assurance Agency, FSMG checks, the requirements of the Competition and Markets Authority, and adhere to the OIA framework.

The third and final tier is the one which is currently in operation. ‘Approved fee cap’ status universities have a maximum fee cap of £9,000, and as explained above, will benefit from TEF ranking financial incentives. Loans will be available to students to cover all fees, and institutions will be able to access grants from the government. The third tier status universities will also have to have to meet more stringent FSGM requirements than exist at present.

On this proposal, Dame Julia Goodfellow cautioned, “Established universities are not standing still and are always seeking to improve what they offer to students. Providing a high-quality, world-leading experience for all students is central to what our universities do. It is important also that any new higher education providers awarding their own degrees or calling themselves ‘university’ meet these same, high standards.”

Vieru was more explicit in her concerns, stating: ““The government has serious questions to answer before it can make it easier for new providers to enter the sector. We need to know what protections they will be required to give to students, to ensure they are not left in the lurch and ripped off by institutions that may be focused on shareholders rather than students’ interests.”

Tuition fee rises and the introduction of addition universities are a primary focus of Johnson’s white paper, but it also covers the establishment of an Office for Students and a plans to increase access to higher education.

The 85 page white paper is available here to read.