Report proposes scrapping Uni fees cap

12th Oct 2010 14:50

The keenly awaited review on university funding has recommended that universities in England should be allowed to charge what they like in tuition fees, though any university charging more than £6,000 a year would be subject to a government levy on the excess.The study, headed by former BP boss Lord Browne of Madingley, proposed a free market model in which the current £3,920 cap on fees is scrapped. Any university charging more than £6,000 a year, however, would pay a levy towards the cost of higher loans, starting at 40% for the first £1,000 above £6,000 and rising to 75% for fees of £12,000."Under these plans universities can start to vary what they charge but it will be up to students whether they choose the university," Lord Browne said. The report said that under its proposals it is entirely possible that a university could go out of business if it failed to offer value for money. "The money will follow the student, who will follow the quality. The student is no longer taken for granted, the student is in charge," claimed Lord Browne, adding that he expected very few universities would actually charge more than £6,000 a year.The review also proposed changes to the student loan system, with graduates not liable to repay their loans until they start earning £21,000 or more a year. The current threshold is £15,000; the Browne report envisages the threshold rising in line with average earnings so as to not unduly penalise graduates on lower incomes.Loan repayments would stay at 9% of income and would be paid off over a maximum of 30 years, but the study recommends that high earners should pay a higher interest rate of 2.2 percentage points above inflation, which is equal to the government's cost of borrowing. The report proposes a simplification of the student support fees, with a flat living loan of £3,750 for all undergraduates and maintenance grants of up to £3,250. Students whose family income is less than £25,000 would receive a full grant, whereas those whose family income exceeds £60,000 would receive no maintenance grant at all.