The Government published its plans to reform higher education on 8 January. The measures are designed to protect the poorest students and graduates, help parents of students, and give universities the investment and freedom they need to compete with the best in the world.
If the Higher Education Bill is approved by Parliament it will mean that from September 2006:
- Up front fees would be removed. No full-time undergraduate student, or parent of a full-time undergraduate student, would have to pay any fees before going to university or while studying;
- You would only start paying back your loan after you left university and when you started earning over £15,000 a year. The current repayment threshold is £10,000. This higher threshold would mean all graduates would repay £450 less every year;
- Repayments would be linked to earnings - the less you earned, the less you would pay: the more you earned, the more you would pay. If you didn’t work or your salary dropped below £15,000 a year or less you would not pay back a thing;
- Payments would be made through the tax system like National Insurance or pension contributions;
- Payments would not be based on what you owed; they would be based on what you earned. This means that higher debt would not translate into higher weekly repayments;
- If you were on the average starting salary of £18,000 you would pay back £5.19 a week. Currently, graduates earning that much repay their loan at £13.85 a week;
- If you were from a low income family you would get total government support of at least £2,125 per year which you would not have to repay;
- No real interest would ever be charged on your repayments. The government would subsidise the cost of borrowing so no-one would be penalised for career breaks or taking longer to pay back. The rate of interest would be linked to inflation only so that the amount you repaid would be equal in real terms to the amount you originally borrowed. This is not like credit card debt;
- Universities would be able to vary fees from £0 to £3,000 for any course. Variability would be between courses within universities, not simply between universities;
- Universities would have to sign an access agreement with the Office for Fair Access (OFFA) to be able to charge more than the current fee of £1,125 per year for their courses;
- The Office for Fair Access would protect and promote access by ensuring that any university charging higher fees would use some of the additional income for bursaries or other financial support for low income students.
The following table shows exactly how much students would repay on different salaries:
| Gross salary |
Weekley income (gross) |
Weekly repayments (now) |
Weekly repayments (new) |
|
£10,000 |
£192 |
£0.00 |
£0.00 |
|
£15,000 |
£288 |
£8.65 |
£0.00 |
|
£16,000 |
£308 |
£10.38 |
£1.73 |
|
£17,000 |
£327 |
£12.12 |
£3.46 |
|
£18,000 |
£346 |
£13.85 |
£5.19 |
|
£19,000 |
£365 |
£15.58 |
£6.92 |
|
£20,000 |
£385 |
£17.31 |
£8.65 |
|
£25,000 |
£481 |
£25.96 |
£17.31 |
|
£30,000 |
£577 |
£34.62 |
£25.96 |
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