Tuition Fee Rise Caused Bump Of Up To 74% In Student Debt

Higher tuition fees led to an increase in student debt of as much as 74%, according to new research.

And while students from higher income backgrounds have been able to turn to their families for help with the debt, those from more disadvantaged backgrounds are increasingly having to work to pay their way through university, or opting not to go in the first place.

A survey of income and expenditure among students has, for the first time, captured in detail the impact of the U.K. government’s controversial decision to lift the cap on tuition fees.

While fees had previously been limited to a maximum of £3,325 ($4,715) a year, they were raised to a maximum of £9,000 ($12,760) with effect from September 2012, and now stand at £9,250 ($13,115) in all but a handful of universities, making U.K. students the most indebted in the world.

The survey found that while first year students had an average net debt of £5,933 ($8,411) in 2011/12, by 2014/15, after the cap on tuition fees was raised, that figure had risen to £10,300 ($14,600), an increase of 74%.

Second year students saw their net debt increase by an average of 65% to £21,361 ($30,287) and third years by 63% to £28,811 ($40,851), according to the survey of more than 5,000 students.

Although student debt was expected to rise once the cap was lifted, the scale of the increase still comes as a surprise.

While the survey was carried out in 2014/15, the findings have only just been released by the Department for Education.

Continuing controversy over the level of student debt and fees has prompted the government to open a review into tuition fees and university funding, although prime minister Theresa May has ruled out scrapping the fees altogether.

One option floated by government is to tie the level of fees universities are allowed to charge for each course to the average salary of graduates, although this has been criticized for penalising universities for offering humanities and social science courses.

Publication of the survey on student income coincides with research looking at the role of financial factors on student decisions around higher education.

Around 2,500 applicants for higher education and first year students were surveyed on issues including how their attitude to university was affected by tuition fees and student loans.

Although financial factors were not the biggest influence on a student’s decision whether or not to apply for university, applicants from lower socio-economic groups did put greater importance on the availability of grants and bursaries and the impact of living costs than their peers from more affluent backgrounds.

Only 5% of applicants said the introduction of student loans meant they would not apply to university, among lower socio-economic groups that figure rose to 8%.

And while applicants from higher socio-economic groups were more likely to envisage relying on their parents or savings to make up the shortfall in the move from a grants-based to a loans-based system, those from lower socio-economic groups were more likely to say they would use paid work as a source of replacement funding.

https://www.forbes.com/sites/nickmorrison/2018/03/27/tuition-fee-rise-caused-bump-of-up-to-74-in-student-debt/?ss=education#769d57367927