The UK government, under Prime Minister Keir Starmer, will implement a rise in university tuition fees for the first time in eight years, according to a report from The Telegraph published on Monday.
Education Secretary Bridget Phillipson is set to announce the increase, which will align tuition fees with the Retail Price Index inflation.
This change is anticipated to take effect in September 2025, impacting current A-level students applying to universities.
Since 2017, tuition fees have been fixed at £9,250. While it remains uncertain which month’s inflation rates Labour will use to adjust the fees, applying the current rate of 2.7% could raise tuition to approximately £9,500 next year.
Earlier reports indicated the government might increase fees to £10,500 over the next five years.
However, ministers are hesitant to commit to any future increases while they contemplate a comprehensive overhaul of the existing system.
This decision comes amid rising concerns that many universities are experiencing financial difficulties, with 40% of English institutions expecting to operate at a loss this year.
In 2012, the Coalition government tripled tuition fees to £9,000, which later rose to £9,250 in 2017. Despite significant inflation in recent years, the fees have remained unchanged.
The Russell Group, representing elite universities, argues that the current cap on tuition fees leads to losses of about £4,000 for each UK student.
Furthermore, university finances have been negatively impacted by a sharp decline in international students due to recent visa restrictions.
According to Home Office statistics, there were 16% fewer visa applications from July to September compared to the same period in 2023.
International students, who typically pay significantly higher fees, have been a vital source of funding for universities, and their decline has intensified calls for prompt action from the government.
Sources informed The Telegraph that a minor increase in tuition fees was anticipated in last week’s Budget as a recognition of the urgent situation.
However, the Chancellor did not announce any new funding for higher education in her inaugural Budget.
It is believed there was considerable pressure to link a temporary tuition increase with the restoration of maintenance grants, which would have substantial costs for the Treasury.
Previous analyses suggested that reinstating grants at an enhanced rate of £4,009 could cost up to £2.3 billion annually.
By announcing a tuition fee increase outside of a fiscal event, the government aims to gain time to finalize reforms to the university funding structure.
Ms. Phillipson is expected to present the inflation-adjusted fee rise as an initial step towards a comprehensive overhaul of the current system, potentially reopening discussions about the return of maintenance grants, which were eliminated in 2016.
The government is also reportedly exploring changes to the tuition fee repayment system, addressing concerns that escalating student debt disproportionately affects less advantaged graduates.
In recent months, ministers have engaged with key figures in the university sector in response to growing demands for immediate support.
Vivienne Stern, CEO of Universities UK, emphasized the need for government intervention to stabilize the sector and called for fee increases in line with inflation starting from 2025/26.
Stern stated, “It is essential to index-link the fee; this situation cannot continue. This is the minimum requirement; we cannot persist in this manner.”
Proposals from Universities UK indicate that if university funding had kept pace with inflation, funding per student would now be approximately £12,000 to £13,000.
The Department for Education has yet to respond to inquiries regarding these developments.
