The Government has confirmed that university tuition fees will not rise next year and the repayment threshold for graduate earnings will be increased.
Minister for Universities, Jo Johnson said: “Maximum tuition fee caps will be maintained at 2017/18 academic year levels in the 2018/19 academic year”, meaning from Autumn 2018 fees will be frozen at £9,250.
From April 2018, graduates will also not have to start loan repayments until they are earning a minimum of £25,000, an increase from the current £21,000 threshold. From 2019 it will be adjusted annually in line with average earnings.
In 2018-19 about 600,000 borrowers will benefit from the threshold changes, Mr Johnson said.
This announcement comes after Theresa May’s 2017 Tory party conference promise to “look again” at student finance.
This announcement, which will not apply to students who have started this month, was met with contempt from Shadow Education Secretary Angela Rayner who said the move “shows just how out of touch Therersa May is”, adding: ” Another commission to look at tuition fees is a desperate attempt by the Tories to kick the issue into the long grass because they have no plans for young people and no ideas for our country. They are yesterday’s party.”
The freeze at £9,250 means that the Government will be discontinuing its policy to allow tuition fees to rise in line with inflation, announced last year.
The Institute for Fiscal Studies said that the freeze will only benefit the very highest-earning graduates, as 4 in 5 (83%) will never pay off the their loan.
They added that freezing fees at £9,250 will reduce the debt of students coming into the system by just £800 and will save the Government £300 million. While raising the repayment threshold to £25,000 will save some graduates up to £15,700 over a lifetime, it will add £2.3 billion to the annual cost of the sector to the taxpayer over the long-term.