Graduates hit by hidden cost of fees
- Dec. 1, 2010
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Keywords:
- cost
- fees
- graduates
- hidden
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According to the Institute for Fiscal Studies (IFS), the plans put forward by the Coalition are going to cost the Treasury billions of pounds more than the original proposals set out by Lord Browne’s review last month.
It is planned that from 2012, universities will be able to charge almost triple the current rate for tuition fees, totalling at up to £9,000 a year.
Ministers have said that graduates would start paying back their loans once they began to earn £21.000 a year; with a higher 3 per cent interest rate to be introduced for those earning above £41,000 a year.
It has been assumed that thresholds for repayments would rise every year in accordance with inflation and salaries, as proposed by Lord Browne.
The Department for Business, however, have claimed that the thresholds would rise only every five years – meaning that many more graduates would be forced to begin repayments sooner as salaries rise.
Ministers had hoped that by asking students to pay a higher share of the cost of their degrees, the burden on the taxpayer would be reduced.
However, Professor Loraine Dearden of the IFS has claimed that “the Government’s plans meant only about 10 per cent of graduates would pay back the full cost of their loans.”
