University Fees Set to Rise, Leaving Students to Struggle with Higher Debt

With much talk surrounding the recent Autumn Budget centred on the planned increase in employers’ national insurance contributions, there has been little concentration placed on the topic of higher education. Whereas Starmer’s predecessor as Labour Party leader spent a great deal of time articulating his plans to scrap university tuition fees, Education Secretary Bridget Phillipson has remained tight-lipped on the subject. Indeed, there was little expectation the Budget would touch upon the issue of tuition fees; this omission signified an impending increase in how much university students will have to pay shortly.

A freeze on tuition fees, introduced by the May government in 2017, is set to come to an end, meaning that university tuition will rise in line with RPIX inflation. OBR forecasts suggest a 3% increase for students starting university in the 2025-26 academic year, resulting in fees around the £9,500 mark, a figure expected to rise to £10,500 by 2029. Students enrolled on a university course before the start of the 2025-26 academic year are set to continue paying the £9,250 figure.

Whilst an increase is on the cards, this would still fall short of the figure suggested by Universities UK (an organisation comprising 142 universities) who estimate that around £12,000-£13,000 of funding is required per student. It is worth noting that Universities UK has not explicitly argued for a rise in tuition fees, instead suggesting the £12,00-£13,000 figure as a guide to illustrate the financial challenges faced by various institutions within the UK. One possible solution touted by Universities UK is for tuition fees to remain at the £9,250 figure, with the financial gap filled by government funding. According to Universities UK, the government contributes 16% towards higher education costs, placing the UK at the bottom of the developed world.

The Student Loans Company has suggested that average debts for graduates studying in England amount to £48,470, a figure set to rise for future graduates if tuition fees are to increase from the 2025-26 academic year onwards. The current threshold for graduates beginning to repay their loan remains at £25,000 in England (in Wales, it sits at £27,295) and is written off after 40 years (30 years in Wales).