"The report acknowledges that the new market regulator for higher education in England, the Office for Students, has competition, choice and student interest at its heart. However, the report seems to forget that the growth in competition in the market has only just been allowed to accelerate as result of the implementation of the new regulatory framework, which only comes fully into force in August this year. The benefits of the new regulatory regime to improving widening participation, quality of provision and student outcomes cannot yet be quantified. It would seem premature to further the Augar recommendations without any parallel evaluation of the effectiveness of the new regulatory framework so that a holistic approach can be taken," she said.
Universities in England can currently charge domestic students on their courses up to £9,250 per year in tuition fees. Students are entitled to a government loan to cover their tuition fees and maintenance costs, and graduates begin to repay these loans, with interest, on earnings above £25,000 a year. Payments cease 30 years after the period of study, regardless of whether any debt remains.
The review recommends the reduction of the fee cap for university-level courses to a flat £7,500 per year from 2020-21 until at least 2022-23, after which it would increase in line with inflation. Maintenance grants, which were abolished in 2016, should be reintroduced for students from low-income households. The report also recommends reforms to student loans including an extended repayment period to 40 years, reduced interest rates while borrowers are studying and a lifetime repayment cap.
The proposals recommend that the new student finance package should be renamed a "student contribution system", to reduce the current emphasis on loans and debt, according to the review. Under the new system courses would be funded through a combination of government teaching grant, varying with the "reasonable costs" and "social and economic value" of each course; maintenance costs by way of parental contribution or maintenance grant; and student contribution.
Education finance expert Pippa Whitmore of Pinsent Masons said that while the recommendations seemed "on the face of it to be drastic", the proposals appear to be a "rebalancing where the funding is coming from rather than cutting budgets".
"My biggest concern is that a future government decides to lower the fees cap but not replace the shortfall with teaching grants, which would be a drastic change which a number of institutions couldn't weather," she said.