Government confirms rise in tuition fee cap

03 Nov 2010

The Universities Minister, David Willetts, has confirmed that the cap on tuition fees in England will be lifted to £9,000 a year. The change will come into effect from the academic year 2012-13.

In the Commons, he also confirmed that there will be a 'more progressive' arrangement for the repayment  of student loans.

Graduates will only have to start repaying their loans after they start earning over £21,000 a year. They will then have to repay at a rate of 9% of their income above the £21,000 threshold.

Any loan remaining unpaid after 30 years will be written off by the Treasury.

There will also be a real terms rate of interest added to the amount owed by students. Whilst their earnings are below £21,000, their debt will increase only in line with inflation. But when they are earning above that amount their debt will grow by a rate of interest that will taper steadily until, after they are earning above £41,000, they will be paying  'inflation plus 3%'.

The government is going to consult on whether there should be a penalty payment on graduates who repay their loan early.

All universities that charge fees above £6,000 a year will have to invest in schemes to assist poorer students. They will be subject to 'tougher sanctions' by the Office for Fair Admissions (OFFA) if they fail to do so. Indeed, OFFA will be able to redirect some of their fee income above the £6,000 level to activities designed to ensure fairer access for students from poorer homes. .

Student living grants will rise from £2,900 to £3,350 for those from families on the lowest incomes and there will be at least partial grants available for those from families with incomes up to £42,000 a year.

Part-time students will be entitled to tuition loans  if they are studying for at least one-third of their time.

Universities will be able to charge differential fees for different courses.


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