Bulletin 02/04: 27 May 2004 

 

UK TRAINING NEWS

Have you been following the top up fees story?

This is an outline of how some of the UK Government’s key proposals for funding higher education would affect full-time undergraduate students, potential students, their parents and quite probably companies since the latter will want to ensure there is an adequate supply of good graduates.  These changes are subject to parliamentary scrutiny and an approval process that will not be complete until the summer.  It is therefore important that students make sure that they know the final position on these proposed changes before making firm decisions about the future.

What costs do students face? 

There are two main costs that students need to consider:

  1. The tuition fees charged by the university or college and accommodation costs.  The proposed changes would affect both of these.
     

  2. Deferred tuition fees.  At present students have to pay their tuition fees in advance. The proposal is that students would not have to pay until they are working and earning over a certain amount; and more financial support to students from the poorest families, in the form of a non-repayable grant.  The bulk of the cost of higher education is met by the Government.  What an Individual student has to pay would depend on their financial circumstances and those of their family.

Here is a breakdown of how the system will work in future if the Government’s proposals are accepted.

From September 2004

  1. A full-time undergraduate will have to pay up to £1,150 a year towards their tuition fees. For students from low income households most - if not all - of this will continue to be paid by the Government.
     

  2. New full-time undergraduate students from lower income households will be eligible for a new Higher Education Grant worth up to £1,000 a year.  Students from a household with an income of £15,200 a year or less will get the full grant of £1,000.

Will anyone get a grant? 

  1. Income of the natural parent’s spouse (husband or wife) or cohabiting partner will be assessed for new students starting in 2004/2005.  This will allow for a more accurate reflection of any changes to the household in the case of separation or divorce.
     

  2. For part-time students there will be a new student financial package, which includes fee support of up to £575 and a grant of up to £250 towards books, travel and other course costs.
     

  3. The salary level at which student loans start to be paid back will go up from £10,000 to £15,000.  This applies to all students with income-contingent loans – including those currently being repaid.

From September 2006 

  1. The requirement to pay tuition fees up-front is to be abolished for full- time undergraduate students.  Instead, students will be able to defer paying their tuition fees until after they leave higher education, by taking out a loan from the Student Loans Company in much the same way as they take out a maintenance loan now.  Students who start their courses before 2006 can also be able to defer their fees by taking out a fee loan if they wish.
     

  2. The Government propose to allow universities to charge tuition fees of up to £3,000 per year.  The £3,000 a year cap will apply until at least 2010.  This will only affect new full-time undergraduates. Students, who start their course before 2006, would not be affected.
     
  3. For new full-time undergraduate students from lower income households, the Government will provide a means-tested grant (not repayable) of up to £2,700.  This grant will only be made available to new full-time undergraduates who commence study in September 2006.  Those students, who commence their studies in 2004 and 2005, will be eligible for the grant at the previous rate of up to £1,000 and not at the higher rate of £2,700.  Repayable maintenance loans would continue to be available.
     
  4. Universities will only be permitted to charge variable fees of up to £3,000 if they sign an Access Agreement with the new Office for Fair Access (OFFA), showing how they will ensure that disadvantaged students are not deterred from their chosen university because of the higher fees.  All universities charging the full £3,000 fee will have to provide a bursary of at least £300 to students who receive the full grant of £2,700.
     
  5. The Government propose raising the maximum rate of the student Maintenance loan, which is administered by the Student Loans company, to match the average student's expenditure on basic living terms from 2006. The biggest increase will be in London.  Loans are to continue to be means tested, as at present, for those from higher family income backgrounds.
     
  6. For students starting their course in 2006, the Government proposes to write off the balance of their student loan after 25 years.  (Arrears owing at the 25 year cut off point would not be written off.)

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