The prime minister is to call for better value for students in England, admitting they face “one of the most expensive systems of university tuition in the world”.
Theresa May will announce an independent review of fees and student finance on Monday.
She will also argue for an end to “outdated attitudes” that favour university over technical education.
Labour says it would abolish fees and bring back maintenance grants.
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Mrs May, announcing the year-long review of student finance and university funding, will warn that the current system has failed to deliver sufficient competition on price – with almost all courses being charged at the maximum £9,250 per year.
For many students, the prime minister will say, “the level of fees charged do not relate to the cost or quality of the course”.
There are “serious concerns” about the cost of university, among parents and grandparents as well as students, Mrs May will say.
There is currently a temporary freeze on fees at £9,250, but that is now likely to be extended for at least another year while the review is conducted.
‘Value for money’
The review will consider ways of reducing costs such as cutting interest rates on loans – currently at 6.1% – and reintroducing maintenance grants for disadvantaged students, as well as examining the level of fees.
But there have been no suggestions so far of scrapping fees or replacing a system in which graduates are expected to pay back for the benefits of gaining a degree.
Mrs May will say the review needs to make sure poorer students can have an “equal chance”.
Students from poorer families are offered bigger loans for living costs than better-off students, who are expected to be partly supported by their parents.
But it means that the poorer students graduate with bigger debts.
Mrs May says this means the funding system “leaves students from the lowest-income households bearing the highest levels of debt, with many graduates left questioning the return they get for their investment”.
Restoring maintenance grants for poorer students, scrapped last year, would reduce their level of borrowing.
The government will promise that the independent review will consider “the whole system of student funding”, looking at whether there is “value for money” for students and taxpayers and how fees and repayments cover the cost of courses.
The review will look more broadly than university fees and will consider support for vocational training and apprenticeships in “post-18 education”.
Mrs May will say there should be an end to “false boundaries” and perceptions of different status between vocational and academic study.
There should be better careers advice to help young people make better-informed choices about a wider range of jobs and qualifications, Mrs May will say.
‘Patchy’ technical training
“For those young people who do not go on to academic study, the routes into further technical and vocational training today are hard to navigate,” the prime minister will warn.
“The standards across the sector are too varied and the funding available to support them is patchy.”
Labour’s shadow education secretary, Angela Rayner, has called for education services, in further and higher education, to be free at the point of delivery.
“It’s time the Tories just accepted their tuition fee system is unsustainable, scrapped fees entirely and brought back maintenance grants and the Education Maintenance Allowance, as Labour has promised to do,” said Ms Rayner.
Ahead of Mrs May’s speech, the Treasury select committee, chaired by former education secretary Nicky Morgan, raised concerns about the high level of interest rates.
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This review is already facing criticism – for pushing the issue of how to pay for degree-level study into the long grass.
The government says graduates will be expected to contribute somehow, but otherwise has given little indication of what it expects from the review.
It’s likely to propose solutions just in time to allow the Conservatives to formulate a policy ahead of the next election.
Education Secretary Damian Hinds says he wants the different routes to getting a degree to be explained more effectively to prospective students – including shorter degrees, or degree-level apprenticeships.
He thinks ministers should consider extra support for university courses that are expensive to deliver.
The Institute for Fiscal Studies says students in England face more than £5,000 in interest charges before they have even left university – contributing to average graduate debts of over £50,000.
Former Conservative and Labour education ministers Ms Greening, Lord Willetts, Lord Adonis and Charles Clarke have all raised concerns about the level of interest charges.
‘Variety’ of fee levels
Education Secretary Damian Hinds, speaking on the Andrew Marr Show, suggested there should be a greater “variety” in levels of fees.
But there have been warnings against different levels of fees for sciences or humanities and arts, or for different types of university.
Lord Willetts said higher fees for courses with the highest graduate earnings would become a “reverse pupil premium”, giving even more money to the most advantaged courses and institutions.
Sir Anthony Seldon, vice-chancellor of the University of Buckingham, backed calls for more flexible approaches – such as two-year degree courses – but warned that setting different fee levels would be a “bad idea”.
Dame Janet Beer, president of Universities UK, said the current system needed to be “better understood and feel fairer to students”.
The priorities should be support for disadvantaged students and reversing the collapse in numbers of part-time and mature students, said the university group leader.