In light of the new concessions made shortly before MPs voted in favour of raising annual fees to up to ??9,000, The Higher Education Policy Institute (Hepi) re-evaluated the plans concluding that if any savings were made, they would be "marginal".
The plans which involve removing teaching grants and replacing them with higher student fees for students were voted in by MPs last week. Although the government claims the reforms are "affordable for the nation", Hepi re-examined government plans to change England's higher education system.
In short, fees would rise from around 3-9,000 per year. Students could take out government-funded loans which they would start to pay back once they reached the repayment threshold of earning 21K per year. One of the concessions was to annually increase this threshold rather than the original idea of doing so every five years. Hepi commented on this saying it will;
"add substantially to the cost, and we have calculated that on the basis of this further concession alone the government's assumed savings will be wiped out if graduate earnings increase by 3.75% per year instead of 4.47%."
"That is to say that if the earnings increase falls short of the government's assumptions by just 16%, there will be no savings."
With no controls to keep tuition fees at the lower end of the scale, Hepi have commented saying the average fee could be "considerably higher" than the government assumption of 7,200.
"This makes a large difference to the cost and savings that the government can expect, because the higher the level of the fee that is charged, the greater the loans that will be required, and because the loans are subsidised, the greater the cost to the government,"
