HE in England from 2012: Funding and finance - Commons Library Standard Note

Published 31 October 2014 | Standard notes SN06206

Authors: Paul Bolton

Topic: Higher education, Students

The Government raised the cap on tuition fees for new student to £9,000 in 2012/13 and cut most ongoing direct public funding for tuition in England. This shifted the balance of higher education funding further away from the state and further towards the individual who benefits. Students can take out publicly subsided student loans to pay these higher fees. There is uncertainty about the final size of this subsidy and the Government’s estimate of it has increased considerably since the reforms were first announced. This also affects the size of any saving in public expenditure and the extent of the shift in costs from the state to the individual beneficiary.

This note looks at the impact of these changes and subsequent announcements on public expenditure on higher education in England and on funding available for higher education institutions in England. It builds on the analysis of funding in Changes to higher education funding and student support in England from 2012/13. That note summarises the Government’s reforms and looks at the potential impact on graduates, universities and public spending. It looks in detail at a number of areas which are only touched on in this note, including, the possible impacts on graduate repayments by income decile, the earnings assumptions behind the loan repayments model and the effect of different average fee levels.

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