Tuition fees in the United Kingdom
Tuition fees were first introduced across the entire United Kingdom in September 1998 under the Labour government of Tony Blair to help fund tuition for undergraduate and postgraduate certificate students at universities; students were required to pay up to £1,000 a year for tuition.[1][2] However, only those who reach a certain salary threshold (£21,000) pay this fee through general taxation. In practice, higher education (HE) remains free at the point of entry in England for a high minority of students.
The state pays for the poorest or low income to access a university, thus university attendance remains high.[3] There are record levels of disadvantaged students accessing a university in England.[3] As a result of the devolved national administrations for Scotland, Wales and Northern Ireland, there are now different arrangements for tuition fees in each of the nations. The Minister of State for Universities has oversight over British universities and the Student Loans Company.
Interest fees
Students and graduates pay interest fees on student loans. Interest starts being added to the student loan from when the first payment is made.[68] In 2012 this rate was set at the Retail Price Index (RPI) plus up to 3% depending on income. Students who started university between 1998 and 2011 pay Bank of England base rate plus 1% or RPI, whichever is lower. Students who started university before 1998 pay interest set at the RPI rate. As a consequence of the 2012 change, students who graduated in 2017 pay between 3.1% and 6.1% interest, despite the Bank of England base rate being 0.25%.[69] In 2018, interest fees rose again, this time to 6.3% for anyone who started studying after 2012.[70]
If those who have taken out a student loan do not update their details with the Student Loans Company when receiving a letter or an email to update their employment status, or upon leaving the UK for 3 or more months, start a new job or become self-employed, or stop working, then they can possibly face a higher interest rate on their loan.[71]
In June 2019, the Brexit Party stated it would scrap all interest paid on student tuition fees and has suggested reimbursing graduates for historic interest payments made on their loans.[72] In August 2019, government figures uncovered by the Labour Party showed that "students will owe a staggering £8.6bn in interest alone on their loans within five years ... almost double the current debt".[73][74]