THE Government is launching a review of the university funding system. Alison Kershaw looks at some of the key questions in the debate

Why is the Government reviewing university funding?

THERESA May announced a review of university finance at the Conservative Party conference last autumn, pledging to “look again” at the system. The Prime Minister’s announcement came amid growing debate about the current funding system, with concerns about issues such as whether students are getting value for money, and the impact of tuition fee debt on graduates.

The debate was sparked in part by a high-profile Labour Party general election pledge to scrap tuition fees for all future students.

What is the current system?

IN England, tuition fees stand at up to £9,250 a year for home and EU students.

Students can get government loans to cover their fees and living costs, which they repay after they have graduated and are in work. At the time she promised a funding review, Mrs May also announced plans to freeze tuition fees at the current level, rather than allow them to increase with inflation.

She also said that the salary threshold for graduates to begin repaying loans would rise from £21,000 to £25,000. Interest rates on loans now stand at up to 6.1 per cent – which has sparked concerns from some quarters.

What is the impact?

A STUDY published by respected economic think tank the Institute for Fiscal Studies (IFS) last summer, before the Government announced the fee freeze and repayment changes, calculated that fees of £9,250 and interest rates of up to 6.1 per cent would mean that the average student would owe more than £50,000 on graduation.

The IFS has also calculated that raising the repayment threshold to £25,000 will save some graduates up to £15,700 over a lifetime, but will add £2.3bn to the annual cost of the sector to the taxpayer over the long term.

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

How does our system compare to other countries?

WITHOUT a doubt, the move in 2012 to treble fees from £3,000 to a maximum of £9,000 pushed our funding system into a new arena – with costs becoming closer to that paid by students in countries such as the United States. Compared with some of our nearest European neighbours, the cost to an English student of going to a UK university is heavy.

In Germany, there are no tuition fees for public universities for both domestic and international students, while in Denmark, higher education is free for EU students.

Meanwhile in the Netherlands, standard fees start at around 2,000 euro (about £1,700).

In Canada, tuition fees can vary depending on where the student lives, what they study and which university they go to. According to one estimate, on average, undergraduate students at Canadian universities paid 6,373 Canadian dollars (about £3,600) in tuition in 2016/17.

In the United States, it is widely held that tuition in expensive, but in reality, the costs can vary enormously based on factors such as whether the student is attending a public or private university, if they are going to an institution in their home state, and if they receive a scholarship. Fees for public universities in 2017/18 ranged from an average of 9,970 US dollars (about £7,100) for in-state tuition and fees, to 25,620 dollars (about £18,300) for out-of-state tuition and fees, according to one estimate. Costs for private universities can be even higher.

What will the review look at?

THE Prime Minister has serious concerns with a tuition system that is “one of the most expensive” in the world. The review is likely to consider whether tuition fees could be cut or frozen, and whether changes could be made to interest rates on student loans.

But Universities Minister Sam Gyimah has warned that Labour’s plans to abolish fees would mean a cut in the number of students that universities could take – restricting access and making it increasingly exclusive.

What will it mean for students and universities?

THAT is the million dollar question, and rests on what the review finds. University leaders have warned that funding for higher education needs to be stable and sustainable. It has also been argued by some that any drop in funding – such as through a cut to tuition fees – would need to be made up from elsewhere. The Russell Group, which represents 24 of the UK’s leading institutions, has said that changes to the system need to be fair and affordable for students, and still meet the needs of taxpayers and universities in providing a high-quality education.