Post-18 education funding announcements
25 February 2022
Dear colleagues,
Almost three years since of the release of the Augar Review of post-18 education and funding in England, the government has now announced several important changes to student finances.
New students enrolling in university from the 2022-23 academic year will see:
- their repayment term for students loans extended from 30 to 40 years
- a lower student loan repayment threshold, from £27,295 to £25,000
- a cut in interest rate on repayments to the Retail Price Index only, rather than the current RPI plus up to 3%.
At the same time, the government also launched two consultations on:
-
considering the introduction of minimum eligibility requirements and student number controls
-
plans to deliver the Lifelong Loan Entitlement (LLE) worth the equivalent of four years of post-18 education.
Despite the reduction in the interest rate, I feel immense sympathy for prospective students, who will understandably be concerned about the implications of these changes for their financial future as they bear an ever greater burden from the marketisation agenda. The changes also reinforce ongoing issues of inter-generational fairness.
At Reading, we are unlikely to face significant impact from the outcome of the announced consultations on minimum entry requirements, that is for students to achieve grade 4 English and maths GCSEs, or two A-levels at grade E, in order to access student loans. However, the cap on fees, and potentially also on student numbers, represent very real financial pressures for the University, in addition to existing challenges like increasing inflationary burdens and the ongoing impact of COVID. All of this inhibits our ability to reinvest to the extent we should, including in those facilities and services that benefit our colleagues and students.
Behind these announcements, of course, are the ongoing and frequently vociferous disagreements about the marketisation of the higher education sector. I have made no secret of the fact that it is not an agenda of which I am a fan. In effect, this current set of proposals means that students will be paying more for a (in real terms) cheaper education.
Whatever our views on those issues, however, the reality remains that changes such as these do have a meaningful impact on our ongoing financial sustainability and our ability to deliver quality for our students. And this is why the proactive work we are doing to implement the University Strategy – on our own terms and based on our own principles – is so important so that we are less vulnerable to outside influences and better able to determine our own future.
Kind regards,
Robert
Professor Robert Van de Noort
Vice-Chancellor