Higher education: Funding and affordability

Minister of State for Universities and Science, Government of the United Kingdom

©Reuters/Luke MacGregor

The coalition government of the UK is seeking to achieve two main goals by reforming funding of higher education in England.

The first focuses on making sure that the finances of diverse institutions across our world-class sector are sustainable for the long term. In the face of a huge deficit reduction programme, it is impossible to increase university funding solely from the public purse. We therefore decided to require a greater contribution from graduates–the clearest beneficiaries of higher education, as OECD research demonstrates.

The second goal, however, concerns the affordability, accessibility and quality of higher education. Under the system which comes into force later this year, domestic and EU undergraduates will not be required to pay any tuition fees up front. Instead, they will begin to repay the cost of their education only upon earning more than £21,000 (about $33,000) per year. At the same time, any institution wishing to charge its students more than £6,000 per year for any degree can only receive authority to do so once it has provided a credible plan to grow its intake from less privileged parts of society (or can demonstrate that it already performs strongly in this regard); by the 2015/16 academic year, universities are set to spend more than half as much again as they currently do to attract disadvantaged students. So far as teaching is concerned, every university is now under greater pressure to convince potential applicants about the value of its courses, as more discerning students look harder for evidence of regular contact with lecturers, modern facilities and strong employment outcomes.

These benefits extend to adult learners. First-time undergraduates of any age are eligible for loans to cover their fees, as well as scholarships and bursaries from individual institutions. As important, we have broadened eligibility to include part-time students, so that parents and adults already in work have a real chance to fulfil their ambitions. One quarter of our students pursue their courses on a part-time basis, a proportion we expect to increase.

We are also exploring ways to ensure that the skills of graduates accord with what businesses need–a vital consideration for older students, for whom a decent job is all the more urgent. A review into business-university links will report imminently, with recommendations on co-designed courses, work experience opportunities and employer sponsorship.

It will obviously take time before we can accurately assess the impact of our reforms. The most recent higher education application figures suggest that demand among people from the most disadvantaged backgrounds remains strong, with a 0.2% decrease on the previous year, but we have seen a drop in applications to full-time courses from would-be mature students. This may well reflect understandable concerns about the current position of the labour market–and such individuals now have part-time study as a viable alternative. Others may view England’s massively expanded apprenticeship programme as a more attractive route to advanced skills and rewarding careers.

England is far from alone in changing the way it funds higher education. According to the OECD’s Education at a Glance 2011, 14 out of 25 countries (for which data is available) have reformed tuition fees and support for students since 1995. Tuition fees, for example, have been introduced or increased in Australia, Austria, Japan, the Netherlands, New Zealand, Portugal, and the US.

Yet perhaps the more significant trend is the growing recognition, in all parts of the world, of the value of universities to national success and well-being. In an ever more competitive and international higher education system, we have taken the necessary steps to give our universities and colleges the resources to underpin worldleading teaching and research, and to give our graduates–adults included–every advantage in the global marketplace.

OECD (2011), Education at a Glance, Paris.

Directgov UK: University and higher education

©OECD Observer No 287 Q4 2011




Economic data

GDP : +0.5%, Q4 2014
Employment rate: 65.9%, Q4 2014
Annual inflation : 0.60% Mar 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 6.993% Feb 2015
More moderate expansion ahead? Composite leading indicators
Updated: 12 May 2015

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