UK plans fee hike for varsities in 2025
The United Kingdom is set to see its first increase in university tuition fees in eight years, according to a report by The Telegraph on Monday.
The move, expected to come into “effect from September 2025, will impact current A-level students applying for university entry.”
The administration under Prime Minister Keir Starmer is poised to approve this increase, which will be announced by Education Secretary Bridget Phillipson.
This adjustment will align tuition fees with the Retail Price Index (RPI) inflation.
Tuition fees have been frozen at £9,250 since 2017, the agency reported.
While it remains uncertain which specific inflation figures the Labour government will use, matching the current rate of 2.7% would see fees rise to approximately £9,500 next year.
Past reports have indicated that fees could increase to £10,500 over the next five years.
However, The Telegraph notes that ministers are cautious about committing to further increases beyond the next academic year as they deliberate on a comprehensive reform of the system.
The anticipated fee increase is a response to mounting financial challenges within universities.
Currently, 40 per cent of English universities anticipate running a deficit this year.
The Coalition government last raised tuition fees in 2012, tripling them to £9,000, and subsequently increasing them to £9,250 in 2017. Despite significant inflation since then, fees have remained static.
The Russell Group of leading universities has argued that the current tuition cap results in a financial loss of approximately £4,000 per domestic student.
Additionally, university finances have been strained due to a notable decrease in international student numbers following the Conservative Party’s restrictions on dependent visas.
Home Office data highlighted “a 16 per cent drop in visa applications between July and September compared to the same period in 2023.”
Since international students often pay three to four times the tuition of domestic students, their reduced numbers have eliminated a vital source of income for universities, intensifying the call for immediate action.
Financial Times on Monday also reported that the Director of the Higher Education Policy Institute, Nick Hillman, said universities “need a fee rise that is significantly above inflation even to stand still”, adding the sector faces £400 million of extra costs as a result of increases in employers’ national insurance contributions.
“If the announcement is a rise of just 2 to 3 per cent, the worries about financial instability will continue,” he said.
“We also need to know what extra support there will be for students in maintenance support, as they are hurting just as much as institutions.”
Maintenance grants
Insiders have indicated that there was hope for a minor tuition fee increase announcement in the latest budget, underscoring the urgency of the financial situation.
However, Chancellor Rachel Reeves refrained from introducing “new higher education funding during her first budget.”
Reports suggest that significant pressure would accompany any fee increase to also reinstate maintenance grants, a move that could come at a substantial cost to the Treasury.
According to The Telegraph, Labour’s analysis indicated that reinstating maintenance grants at a raised rate of £4,009 could cost as much as £2.3 billion annually.
Announcing the tuition fee increase outside of a major fiscal event could allow the government more time to finalise its broader university funding reform.
Ms Phillipson is expected to position the inflation-linked fee rise as a “first step” toward overhauling the current system, potentially reopening discussions about reintroducing maintenance grants, which were eliminated by the Cameron administration in 2016.
The government is also reportedly considering changes to the tuition fee repayment model due to concerns that growing student debt disproportionately affects graduates from disadvantaged backgrounds.
Ministers have been in discussions with senior university officials over the past few months in response to urgent calls for support.
Chief Executive of Universities UK (UUK), Vivienne Stern, emphasised the need for immediate government action. “Just get on and index-link the fee— this cannot be allowed to continue,” Stern said in an interview with The Telegraph in September, describing it as a “necessary” measure.
She added, “That’s the bare minimum — you know, you can’t go on like this.”
According to UUK’s analysis, had university teaching investments kept pace with inflation, current funding per student would be in the range of £12,000 to £13,000.
As of now, the Department for Education has yet to issue a formal response.
Tosin Oyediran
Tosin, with over six years’ experience, conducts incisive interviews, pens engaging features, subedits and delivers impactful stories for the digital sphere.
