The new system

The Coalition Government is proposing changes to how higher education in England is funded.

• The upper limit on tuition fees will be raised to £9,000 with a lower threshold of £6,000. Courses charging between £6,000 and £9,000 will be subject to new requirements on widening access to the poorest students.
• Tuition fees will not be paid upfront by either students or their parents. Graduates will make a contribution after they have left university.
• The earnings threshold for graduate contributions will be raised from £15,000 to £21,000. The repayment rate will remain at 9 per cent. This means that no one earning under £21,000 will pay anything and graduates earning over £21,000 will pay back £45 less each month.
• All outstanding contributions will be written off after thirty years. Over half of graduates will have at least some of their contribution written off. The poorest quarter of graduates will pay less over their lifetimes with the new system than they do under the old system.
• There will be more support for students on low incomes: there will be a new £150 million National Scholarships Programme to help the poorest students into the top universities; maintenance grants for students from lower-income families will increase from £2,906 to £3,250; and partial maintenance grants will be available to students from families with incomes between £25,000 and £42,000.
• Real rates of interest will be applied to student loans in order to ensure the system is fair and affordable. Graduates earning less than £21,000 will be protected as under the present system, but interest rates will gradually rise to a maximum of RPI (Retail Price Index) + 3 per cent for those earning £41,000 or more. This will provide extra revenue from better-off graduates, ensuring other aspects of the new system, such as raising the earnings threshold for repayment to £21,000, are affordable for the taxpayer.
• Although reductions in government spending on higher education will help reduce the budget deficit, there will continue to be substantial public funding for universities. The balance of university funding will shift from 60 per cent government, 40 per cent private to approximately 40 per cent government, 60 per cent private.
• For the first time, part-time students will be eligible for student loans. Until now, part-time students have had to pay fees upfront. Part-time students on their first degree will no longer have to pay anything until they have graduated and entered well-paid work, so long as they are studying a quarter as much as a full-time student.

Promoted by Alan Mabbutt on behalf of the Conservative Party, both at 30 Millbank, London, SW1P 4DP