Education Secretary Bridget Phillipson announced the maximum cap on tuition fees in England will go up in line with inflation from April 2025.
There will also be a rise in maximum maintenance loans to increase in line with inflation, giving an increase of £414 a year to help students with living costs.
And now, Money Saving Expert founder Martin Lewis has had his say – and it’s not all doom and gloom.
IMPORTANT PLS SHARE. It’s rumoured the English £9,250 tuition fee cap may be raised this pm for the 1st time in 8yrs, as University’s finances are strained. As student finance misunderstandings abound, I’ve bashed out a few notes to help…
1. Higher tuition fees WON’T change…
— Martin Lewis (@MartinSLewis) November 4, 2024
Martin posted on X, formerly known as Twitter: “IMPORTANT PLS SHARE. It’s rumoured the English £9,250 tuition fee cap may be raised this pm for the 1st time in 8yrs, as the University’s finances are strained. As student finance misunderstandings abound, I’ve bashed out a few notes to help…
“1. Higher tuition fees WON’T change what most pay each year. For most, they’re paid for you by the student loans company and you repay afterwards only if you earn over the threshold. The amount you repay each year (9% over the threshold) solely depends on what you earn not on what you borrow.
“2. Increasing tuition fees will only see those who clear the loan in full over the 40 years pay more. That is generally mid-high to higher earning university leavers only, so the cost of increasing them will generally be born by the more affluent. Most lower and middle-earning university leavers will simply pay 9% extra tax above the threshold for 40 years (and higher tuition fees won’t change that).
“3. The rise is tuition fees is likely to be trivial compared to the changes the last govt made for 2023 starters. 2023 starters had their repayment thresholds dropped to £25,000 (from £27,295/yr) and had the time they had to keep repaying for (unless cleared) extended to 40 years from 30 years. So these higher annual repayments for longer, increased by over 50% the amount many graduates will eventually have to pay back for going to university.
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“Yet they were almost stealth changes because people can’t intuitively feel the seismic impact. Changing tuition fees is a more obvious rise, but in reality has far less of an impact on the amount most will repay (though combined with the 2023 changes it does certainly up the cost).
“4. The biggest practical problem for students isn’t tuition fees (even if raised) its the fact maintenance loans aren’t big enough. English maintenance loans have not kept pace with inflation. I’d urge the govt to couple the tuition fee loans with bigger living loans – if not it is a real risk to social mobility, with those from the poorest backgrounds likely to be worse affected.
“I could write more, but will stop here, hopefully this gives an idea the issues are less straightforward than many feel.”
