Squeezing our Students? An English/OECD comparison of the student finance burden

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Author:

Josh White

Date:

15 July 2013

The post-2010 reforms to the financing of higher education at English universities have proved extremely controversial. Students on most courses now face the prospect of being charged tuition fees that can cost up to £9,000 per year, and having to pay a higher interest rate on the debt than previous generations of graduates.

But how does the new student finance burden in England compare with what students in other countries have to face? IF has undertaken a major international comparison that examined the levels of fees that students can be charged at higher education institutions in other OECD member states, in addition to comparing the student finance systems in these countries and the amount of interest charged on student debt.

This revealed that under the new English system, students are now being charged the highest headline tuition fees of any public university system in the world, in addition to the third-highest rate of interest on government-backed student loans. People who graduate under the new system are also likely to be severely disadvantaged in the future, as they face the prospect of having to repay 9% of all income above the repayment threshold – effectively a graduate tax – and the government has retained the power to adjust their repayment terms at any point in the future. IF calls for urgent debate among the higher education sector and education policy-makers about whether this system will really benefit Britain in the long term.

Posted on: 15 July, 2013

3 thoughts on “Squeezing our Students? An English/OECD comparison of the student finance burden

  1. Steve Kemp- king

    I’ve just read John White’s excellent paper “Squeezing Our Students” and he seems to make the same small error all writers on the subject make namely: he does not factor interest into the amount of debt students face on leaving. If we take the debt on fees alone then if, as he rightly points out, interest is charged at 6.6% while they are still students then as interest kicks in from day one of the loan the first year’s fees will have grown to £10,227 after 3 years, the second year debt to £10,227 and the third year well be £9594 after one year giving a total of£ 30,143 on fees alone.

    I have used three full years for my figures as graduation dates differ.
    £9,000 @6.6% = £9,594 after one year, £10,227 after two years and £10,922 after three years, ie late Sept/early Oct of the year they graduate.

  2. Josh White

    Hi Steve – thanks for reading! Interest rates on fees don’t take effect until after a student has graduated, at which point interest is calculated on the £27,000, rather than at the end of each year of their study. A (rather tiny) bit of good news in a messy policy!

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