Top-up fees

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Top-up fees (not their official name) are a new way of charging tuition to undergraduate and PGCE students who study at universities in England and Wales from the 2006-2007 academic year onwards. Students who started degree courses before this year continue to pay the old fees.

1 How the fees will work
2 Introduction of top-up fees
3 Controversy
4 Arguments for and against
5 See also
6 External links

[edit] How the fees will work

Previously, most British students (except Scottish students studying in Scotland) pay a contribution towards their tuition fees (anything from £0-£1,250 a year). The amount they pay is based on their or their parents' income (called means-testing) in the tax year preceding each academic year. The fees are paid up front during each academic year. In addition, students are entitled to a means-tested student loan of up to around £4,000. The loan is separate from the tuition fees and is paid back by the student after they have graduated. It is repaid at the rate of 9% of gross income over £15,000 a year (different limits apply to unearned income and non-residents). The interest rate on loans is changed on 1 September each year and the annual rate is set to the Retail price index increase the previous April (making the loans interest-free in real terms).

The new top-up fees will operate as follows (figures are given for the academic year 2006-2007, and may rise by no more than the inflation rate until 2010):

Universities will be able to charge students anything from £0 up to a maximum of £3,000 per year. In order to charge more than a basic £1,250 fee universities must satisfy a new Office for Fair Access (OFFA) that their admissions policies are equitable. Nearly all universities have chosen to charge the full £3,000. All Scottish universities will charge £1,700 per year (£2,700 for medical courses), but only to non Scottish students (see below).

Rather than pay the fees up front (as is the case now), they will usually be paid by the government-owned Student Loans Company (SLC), the same body that currently provides student loans. The exception to this is for those undertaking a second course of Higher Education in their lifetime, if the previous course was a successfully attained Honours degree, save for a few 'Professional' qualifications where only Maintenance Loans will be made available. For those who have previously studied partway through a course, or studied for ordinary degrees etc., a minefield of special rules and calulations awaits.

The SLC will also continue to pay means-tested Student Maintenance Loans directly to students. Students will repay their loans and tuition fees after graduation in the same income-dependent way as at present. Interest on the loans will still be tied to inflation, so they have a zero 'real' rate of interest.

In addition to student loans, new means-tested grants will be available to students from lower-to-mid-income families, and universities will start to offer a range of bursaries for students. The Training and Development Agency for Schools will partially pay the fees of PGCE students.

Whether the new fees apply varies depending on where the student is from and where they go to university:

English and Northern Irish students will pay top-up fees wherever they study in the UK

Welsh students will pay top-up fees in England, Scotland or Northern Ireland, but only the current £1,250 a year fee if they remain in Wales or study a course elsewhere that is not available at any Welsh university

Scottish students will pay top-up fees in England, Wales or Northern Ireland; if they remain in Scotland, they will pay a £2,145 endowment upon graduation (as is the case now)

EU students will pay fees as if they came from the nation they are studying in (in other words, always the lowest amount)

International students will continue to pay their university's international fees, which are typically even higher than top-up fees

Many perceive the charging system to be unfair and possibly even racist. It has been suggested that the Welsh system in particular, where the National Assembly for Wales partially pays for only Welsh students' fees, could be ruled illegal [1].

[edit] Introduction of top-up fees

Legislation to enable the introduction of top-up fees was proposed by the Labour Party Secretary of State for Education, Charles Clarke and became law in the Higher Education Act 2004. The law will come into effect for the 2006-2007 academic year.

[edit] Controversy

This became law despite the Labour manifesto 2001[2] promise reading: "We have no plans to introduce University top-up fees, and have legislated to prevent their introduction." The Labour Party has publicly defended this decision, by saying that the manifesto commitments only apply to the 2001 - 2005 Parliament, and that the legislation introducing top-up fees will not take effect this Parliament. However, many members and supporters of the Labour Party, as well as many Labour Members of Parliament, are angry at this mechanism of defence.

In the key vote in the House of Commons, the Government (which at the time had an overall majority of some 160 seats out of 660) only barely managed to contain a rebellion among its own MPs - the voting was a mere 5 votes in the Government's favour, and was the closest it had come to defeat in the Commons since being elected in 1997. The vote attracted further controversy because 46 Scottish Labour MPs - to whose constituents the fees would not apply - had voted with the Government [3] (see West Lothian question).

[edit] Arguments for and against

A poster advertising an anti-fees demonstration in January 2004

Since each institution will be able to vary the fee they charge and be able to keep the revenue raised this way, the Government claims this means that over-subscribed and popular universities can charge more money, while institutions that may be struggling can charge less to attract more students. Supporters say that the abolition of upfront fees should encourage more young people to apply.

However, due to the current funding crisis in UK higher education, it is likely that many institutions will be forced to charge the full fee, removing this incentive. Instead, critics claim students will be put off from studying due to the large amount of debt they will have to incur to study, with only rich families being able to afford this amount of debt, thus making higher education less widely available. As evidence in support of this theory, UCAS have reported a fall of 12,000 applicants for the year 2006-2007. It has transpired that almost all universities in England will charge the full £3,000 for all their courses, with the market being made in the nature and size of the various 'access' bursaries that are offered.

There is also the problem that higher income families will not necessarily fund their children in university, which means extra debt for the student. Many students have to try to work almost full time jobs to help pay their tuition costs and live, which gives them much less effective time to study.