Sir Christopher Snowden, the president of Universities UK, is sceptical when asked about the recent call for significantly higher undergraduate tuition fees made by Andrew Hamilton, vice-chancellor of the University of Oxford.
“I would expect, perhaps, a vice-chancellor of Oxford or Cambridge to make those points,” Sir Christopher said.
The vice-chancellor of the University of Surrey added: “I don’t think £16,000 is a likely scenario in the near future.”
But although Sir Christopher – who as UUK president represents its member institutions in talks with the government – is not an advocate of such a huge jump, he does have a close interest in major reforms to fees and funding.
For him, there is a clear case for raising the £9,000 cap in line with inflation. And he has two options for further reform: either change the student loans system to inject more funding, after examining loan systems in nations such as the US, South Korea and Hungary; or reintroduce significant direct public funding for capital spending in universities.
“The whole issue is that fees can’t remain frozen for ever,” said Sir Christopher, who began his two-year term as UUK president in August. “In real terms by 2016, if you look at inflation rates, they will be worth about £8,250…The reality is, the money isn’t worth what it was.”
He said it was true that the present £9,000 cap is “simply not sustainable” for universities beyond Oxford and Cambridge. Surrey has “several subjects where we are losing substantial sums of money teaching UK and EU students”, he explained. These include science, technology and engineering courses.
“On aggregate, the £9,000 was perhaps a reasonable starting point, but it really needs to have a sensible indexing linked to it,” he continued.
“The question is, is there the scope to look at some different way of funding the fee? Because the RAB charge [the proportion of student loans that will never be repaid] will obviously go up if you increase the £9,000.”
Figures from the Office for Budget Responsibility show that the impact of student loans on public debt will peak at 6.7 per cent of gross domestic product (£103 billion in today’s terms) in the early 2030s. “That’s a sobering thought. And that’s on £9,000, of course,” Sir Christopher said.
So although increasing fees in line with inflation “offers stability”, there would still have to be “other models looked at” in terms of “how you fund students and the student loan system”, he argued.
“As a starting point it’s worth looking at what other countries do,” he suggested, noting that the US federal government’s Stafford loans include “a means of subsidising the interest for students – some but not all”.
“Hungary has a fees system and South Korea has a fees system. They are both different to the US’. It would be interesting to compare what we now know happens with ours with what other countries do,” Sir Christopher said.
“It makes complete sense that before we change anything, we need to understand the relative merits of those [loan systems].”
Of the US, Hungary and South Korea, he said: “All of them have different interest rate models. Which is important because that affects both the growth of the debt and the way that students manage it. It does impact on what sort of fee level you might start with.”
UUK is shortly to publish an analysis of future funding options, including studies of other nations’ loans systems.