Fury over proposed cut to tuition fees amid claims the highest earners will benefit most

Backlash over proposed cut to tuition fees amid claims the highest earners will benefit most from the move

  • An official review says that the annual fees should be cut from £9,250 to £7,500 
  • Report recommends debts be wiped after 40 years rather than the current 30
  • However, critics now say that the planned changes will benefit highest earners 

Proposals to cut tuition fees have been hit by a furious backlash after it emerged the highest earners will benefit most.

An official review says annual fees should be cut from £9,250 to £7,500, and those taking out student loans should pay back over a longer period.

The report recommends debts be wiped after 40 years rather than the current 30 – meaning middle and low-earning borrowers would carry on repaying almost until retirement.

An official review into university tuition says annual fees should be cut from £9,250 to £7,500 (file photo)

The reductions, which could be introduced by 2021/22, would see less initial debt taken out, but students would pay back a larger proportion of their debt before it is wiped.

But it also means high earners, who earn enough to repay in full, would be better off under the proposals, while middle and low earners would be worse off, since they will end up paying off a larger chunk of their debt. Yesterday, it emerged the highest five per cent of earners would face total student loan repayments of £37,323 under the new proposals, compared with £55,452 at present.

The middle earners, such as teachers and nurses, who make between £30,000 and £40,000 mid-career, would end up repaying £26,667 compared with £14,844 currently. Today, graduates repay 9 per cent of their income above a salary threshold of around £25,000, for 30 years, but the review suggests reducing it to £23,000.

Now critics have lined up to attack the proposals in the report by ex-banker Philip Augar. 

Former universities minister Joe Johnson said he was ‘concerned’ because ‘lower and middle earners will repay the totality of their loans over a longer period, and that is regressive’. He added that the loss of tuition fee revenue would ‘destabilise university finances, imperil many courses and reverse progress in widening access’.

And Robert Halfon, chair of the Commons education committee, said he was ‘cautious of subsidising lower fees which might help the middle classes, when this money could instead be used to promote and support degree apprenticeships’.

Prime Minister Theresa May, who commissioned the report, welcomed the review into tuition fees

Prime Minister Theresa May, who commissioned the report, welcomed the review into tuition fees

But Mr Augar hit back at critics, telling the BBC’s Today Programme: ‘This is a progressive system. The more you earn, the more you pay. The whole system depends on those higher earners paying back their loans. If they don’t do that the thing just would not be affordable.’

Yesterday Theresa May, who commissioned the report, welcomed the review.

The Prime Minister said: ‘I’ve seen how young graduates starting out in their adult lives feel weighed down by the burden of student debt.’

But Ryan Shorthouse, of the Bright Blue think tank, said: ‘The headline reforms to student loans are expensive, regressive and pointless.’

Low value degrees are a waste of money and must be ‘driven out’, Theresa May has said. 

Speaking at the launch of the Augar review, she warned that the courses, which have included ‘tournament golf’ and ‘fashion journalism’, offer poor value to both the taxpayer and students.

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