A review into further education has called for a reduction in tuition fees and interest rates, to be combined with a lengthening of the loans payback window beyond 30 years.
The review calls upon the government to reduce the annual university tuition fee from £9,250 to £7,500, as well as to reduce the level interest rate on student loans from 6.3% to 1.5%.
The Augar review, which is being led by banker and visiting fellow at Cranfield School of Managment Philip Augar, has made 40 recommendations to government, including the return of means tested grants, more support for part-time students and the lengthening of the loans payback window beyond 30 years.
The review was commissioned following a speech by Theresa May in February 2018, where she announced “a wide-ranging review into post-18 education.” The review considers the nature and extent to which students over 18 are expected to fund their education, including the “level, terms and duration of their contribution.”
The review follows criticism of the current student loans system. According to research from the Institute for Fiscal Studies, it is projected that only 17% of students will be able to pay off their student loans in full before they are written off, meaning that 83% of students will not pay their loans off in full. This is significantly greater than the government projections of 30% when the new loans system was introduced in 2011.
Founder of Money Saving Expert Martin Lewis has said that the current loans repayment system, which allows for students to pay off their loans early, is “just flushing money down the loo.
“For those on lower earnings, overpaying some of your loan is often futile as it won’t alter what you repay in future.”
Analysis released Education Secretary Damien Hinds shows that in 1 in 10 university courses, 3 in 4 students earn less than £25,000 five years after graduation. Hinds commented that the data show that some universities are “more focused on getting ‘bums on seats’ than getting students into courses worth paying for.”
Oxford University has been contacted for comment.
