Lord Browne’s Higher Education review puts students up against unlimited fees and higher interest rates

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Universities may be able to charge unlimited fees from their students in years to come according to a new proposal laid out by Lord Browne in his long awaited review of Higher Education funding.

Lord Browne, the former chief executive of BP, said universities that charged the highest fees would have to demonstrate they are widening access to students from poorer homes.

Lord Browne’s review calls for the £3,290 cap on fees, which students borrow in loans, to be scrapped. Instead it proposes a free market in fees – setting out models of charges up to £12,000 a year for a degree course. “There are a variety of things they can do in that area, including offering scholarships for living expenses,” Browne told The Guardian.

Graduates will start repaying the cost of their degrees when they start earning £21,000 a year, up from £15,000 under the current system, the review recommends.
Institutions charging more than £6,000 will have to pay a rising percentage of each additional £1,000 as a levy to government. So a university that charges £7,000 will receive 94% of this fee, while one that charges £10,000 will receive 81%. At £6,000, the university receives the full fee.

The far-reaching recommendations set out a system in which much of the cost of a degree would be transferred from the taxpayer to the student.

The review also calls for the merger of a super quango (quasi non-governmental organisation) for higher education. The Higher Education Funding Council for England, which distributes funding on behalf of the government, would be combined with the sector’s watchdog for fair access, its quality regulator and its complaints watchdog.
This more competitive market would also mean that for the first time universities could go out of business, says the report.

Universities must compete over students, fee levels and against new providers, the review panel recommends: “If they fail… they might ultimately close or be taken over.”
Lord Browne said today (Wednesday 13 October) that he did not expect students to be deterred by debt. “There is a lot of evidence that students don’t just look at debt, but at the prize at the end as well, which is significant earning potential. If you look at the 40% of students who study part-time, we don’t offer them anything, but they still come and study part-time.”

The report comes ahead of next week’s comprehensive spending review, in which major cuts to higher education funding are expected.

Student response to the proposals put forward by the review has been highly critical. Aaron Porter, NUS president, said: “If adopted, Lord Browne’s review would hand universities a blank cheque and force the next generation to pick up the tab for devastating cuts to higher education. The only thing students and their families would stand to gain from higher fees would be higher debts”.

He went on to argue that “there is no clear assurance that a hike in fees would improve student choice or quality and the evidence since fees tripled four years ago shows that neither student satisfaction nor quality has improved.”

LUSU President Robbie Pickles released a statement commenting “Lord Browne’s review has certainly provided food for thought for many organisations, but it is important to remember that it is not a government proposal yet.” He argued that “attempts to spin this as a ‘progressive step’ will fall flat. Students are not stupid, and neither are their parents. They will struggle under increased debt and our communities will struggle if less people can afford the education needed to fulfil a valuable role in society. Where will the teachers, doctors and nurses of the future come from?”

Paul Wellings, the Vice-Chancellor of Lancaster University and Chair of the 1994 Group of leading research-intensive universities has been a central figure in the recent row over tuition fees. He commented on the release of the Browne review, calling it “the first progressive step in a long process to address the important issue of university funding”. Wellings holds the view that “everyone’s priority has to be to reassure students of all backgrounds that they will be able to attend a university with the resources necessary to offer academic excellence and the very best experience. Wellings asserted that “most importantly, the impact of the Comprehensive Spending Review later this month must not be allowed to detract from the gains offered to universities by the Browne Review.“

The official statement on the events from the government Business, Innovation and Skills (BIS) press office took a positive view of the proposals. In it, Secretary of State for Business Vince Cable, argued that “They [Lord Browne and the review team] have taken evidence from a wide range of people including students, the higher education sector and business. We will judge their recommendations against the impact on student debt, ensuring a properly funded university sector, improving the quality of teaching, increasing social mobility and attracting a higher proportion of students from disadvantaged backgrounds.”

At the time of the election, all sitting Lib Dem MPs, including Nick Clegg and Cable, signed up to a pledge to vote against any increase in fees. The coalition agreement allows the Lib Dems to abstain.

However Cable gave official governmental approval to the proposals, telling the BBC the proposals were “probably on the right lines” and that he would look to implement the price hikes in 2012, meaning that current Year 12s would be the first to face the blow.

In the same BIS statement Minister for Universities David Willetts was quoted as saying “the current system of funding for higher education is no longer fit for purpose. Any new funding settlement must promote world class competitiveness in teaching and research, with better quality for students.”

Lancaster students appear to hold opposing views. Jon Wilby, of Lonsdale College, said “I am sickened by the shameless way in which students are now unprotected from the money grabbing administrative side of universities. We are now essentially held to ransom by universities and the best and brightest kids from poorer backgrounds will be put off coming to the detriment of society in general.”

However, Liam Shepherd of Bowland College disagreed. “I wouldn’t mind paying more money for a better quality degree. I don’t think it’s fair that top flight universities are limited, despite offering so much more for your money. The idea that students can now dictate how much a uni should charge will hopefully result in a more competitive education system.”

The Browne Report in a nutshell

  • No limit on tuition fees. At the moment they’re capped at £3,290 per year. They could increase to £12,000.
  • A 10% increase in the number of places universities can offer.
  • Graduate loan interest rates would rise to the government’s cost of borrowing (2.2%) on top of inflation.
  • Graduates would begin to repay the cost of their fees when their earnings reach £21,000 instead of £15,000.
  • The government would set an minimum entry requirement each year, effectively moving UCAS point standards to reflect demand for places and that year’s available budget. Students with results beneath that requirement wouldn’t be able to apply for financial support.
  • Unpaid debt will take longer to be written off. At present it takes 25 years, proposed to be upped to 30 years.
  • Part-time students would be allowed to pay fees when they graduate instead of up front as they do now.
  • Universities wouldn’t have a limit on the amount of students they could admit.
  • The teaching grant given to universities would be cut by 80%, meaning with the proposed £6000 charged to each student teaching income would drop slightly. It would rise slightly if each student was charged £7,000.
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