Universities call for rise in student tuition fees By Graeme Paton, Education Editor From: The Telegraph 18 May 2010

Leading universities are calling for a rise in student tuition fees, despite claims that it would saddle graduates with debts of up to .40,000.

For the first time, the elite Russell Group said the .3,225-a-year limit on fees should be abolished and universities left free to charge different amounts for different courses.

Such a move would pave the way for the introduction of a US-style system, where annual fees for sought-after degrees at the best universities can top .20,000.

The group, which represents 20 institutions including Oxford, Cambridge, Imperial and University College London, said the new coalition Government should not ―shy away from addressing the ―urgent problem of the under-funding of universities.

It also said interest rates on student loans should rise and middle-class graduates should make bigger contributions to fund bursary programmes for the poorest undergraduates.

That would enable the Government to provide loans to cover the full cost of fees even if they were almost tripled to .9,000 per year.

The recommendations were made in a submission to an independent review of student finance being led by Lord Browne, the former head of BP. Universities UK, which represents vice-chancellors, suggested that fees should ―increase over time.

Student leaders and trade unions condemned the suggestion, which they said risked ―pricing a generation out of higher education. They also warned that it could lead to a doubling of the average graduate debt, which now stands at .20,000.

Aaron Porter, the president-elect of the National Union of Students, said: ―The removal of the cap on fees would fully expose students and their families to the huge risks and potential calamities of the market, abandoning them to sink or swim.

―The Russell Group’s proposals would lead to many students leaving university with mortgage-style debts of more than .40,000 when times are already very tough for graduates and young people. Sally Hunt, the general secretary of the University and College Union, said raising tuition fees would be ―the most regressive piece of education policy since the war and put university ―out of reach for the majority.

Lord Browne’s review, which will be delivered to ministers in the autumn, is expected to prove divisive for the Government.

The Tories have refused to rule out a rise in fees, while the Lib Dems have called for student fees to be abolished.

In its submission, the Russell Group said an increase in graduate contributions represented the ―only viable option for ensuring sufficient funding for a world-class higher education system.

It insisted that funding from businesses, charitable contributions and international activities was not enough to meet the financial needs of universities.

Wendy Piatt, the Russell Group’s director-general, said the existing cap on fees should be lifted in stages.

―The most effective and efficient way of protecting the quality of UK higher education would be to allow institutions to exercise discretion over the level of graduate contributions they require, but any move to a fully differentiated market through removing the cap on fees should be incremental, she said.

Student loans are set at a low interest rate that is subsidised by the taxpayer. A significant rise in fees would put a huge strain on the public purse as students sought to borrow more money. The Russell Group’s contention was that fees could rise to £9,000 if accompanied by a rise in loan interest rates.

In its separate submission, Universities UK also backed an increase in fees. The group said an analysis carried out on its behalf by the Institute for Fiscal Studies suggested that fees could be raised to £5,000 per year — with a 2.2 per cent interest rate — without affecting students.