No rise in university tuition fees next year, minister confirms

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University tuition fees will not rise next year, the Government has confirmed.

Graduates will also not have to start repaying loans until they are earning at least £25,000 - up from the current £21,000 threshold, Universities Minister Jo Johnson said.

Confirmation that tuition fees will be frozen at £9,250 for next autumn comes the week after the Prime Minister announced the plan on the eve of the Conservative Party conference.

Jo Johnson
Minister of State for Universities Jo Johnson has confirmed tuition fees will not rise next year (Stefan Rousseau/PA)

In a written statement on Monday, Mr Johnson said: "Maximum tuition fee caps will be maintained at 2017/18 academic year levels in the 2018/19 academic year."

On the repayment threshold, he said: "The earnings threshold will be increased from April 6 2018. From its current level of £21,000, the threshold will rise to £25,000 for the 2018-19 financial year. Thereafter it will be adjusted annually in line with average earnings.

"The new threshold will apply to those who have already taken out and will take out loans for tuition and living costs for full-time and part-time undergraduate courses in the post-2012 system, and those who took out or will take an advanced learner loan for a further education course."

In 2018-19 about 600,000 borrowers will benefit from the threshold changes, Mr Johnson said.

Tuition fees for English universities trebled to a maximum of £9,000 a year in 2012 and were fixed at that level.

Last year, the Government announced fees would be allowed to rise with inflation, initially increasing to £9,250 for this autumn. The announcement of a fee freeze for next year means that policy has not continued.

As her party converged on Manchester last week for its conference, Theresa May pledged to "look again" at student finance.

Theresa May
Prime Minister Theresa May has vowed to look at student debt (Matt Dunham/AP)

She said: "We know that the cost of higher education is a worry, which is why we are pledging to help students with an immediate freeze in maximum fee levels and by increasing the amount graduates can earn before they start paying their fees back, amounting to a saving of £360 a year, while the Government looks again at the question of funding and student finance."

University funding has been in the spotlight since the general election when Labour made a high-profile promise to scrap tuition fees - a pledge that was credited with winning the party support among young voters.

Since then there has been continuing debate about the current funding system, with growing concerns from some quarters about student debt.

The independent Institute for Fiscal Studies (IFS) has said raising the repayment threshold to £25,000 will save some graduates up to £15,700 over a lifetime, but will add £2.3 billion to the annual cost of the sector to the taxpayer over the long-term.

Recent change means cost to taxpayer of HE greater than pre-£9k fees. High earning grads also pay more. Low earners and universities win. pic.twitter.com/tdh5SueYHQ

-- Paul Johnson (@PJTheEconomist) October 8, 2017

Freezing fees at £9,250 will reduce the debt of students coming into the system by just £800 and will save the Government £300 million.

The benefit will be felt only by the very highest-earning graduates as the vast majority (83%) will never pay off their loans in full, the IFS said.