All university graduates should repay at least £10 a week under a reformed student loan system, according to a former government adviser. Tim Leunig, an economist and adviser to the Treasury and the Department for Education under the Conservatives, has put forward a 10-point plan to address weaknesses in the student finance system in England. In a paper published by the Higher Education Policy Institute (Hepi), Mr. Leunig advocates shortening the repayment term on student loans from 40 to 20 years, ensuring the debt does not increase. He suggests that all graduates, regardless of income, repay a minimum of £10 a week to enhance the system’s financial stability.
University leaders have expressed concerns due to frozen tuition fees for domestic students and a decline in overseas student numbers. The cap on tuition fees in England was raised to £9,000 a year in 2012 and has since remained at £9,250 as of 2017. Universities UK (UUK) recently proposed that students pay higher tuition fees, and additional government funding is required to address funding shortfalls in English universities.
Other recommendations in Mr. Leunig’s paper include a 1% “surcharge” for employers when hiring graduates, new maintenance grants of about £11,000 for students from families earning less than £25,000, and a £2,000 increase in government-funded university funding per student. Professor Eric Neumayer from the London School of Economics (LSE) praised the costed and principled nature of Mr. Leunig’s proposal, highlighting the urgent need for extensive student finance reform.
Education Secretary Bridget Phillipson previously acknowledged the sector’s challenges, promising to give attention to these issues. UUK is set to release its blueprint with recommendations for a reset of the university sector. A UUK spokesperson emphasised the importance of linking fees to inflation, reintroducing grants for low-income students, and increasing maintenance loans to support students during their studies.
The Department for Education assured a commitment to ensuring the sustainability of universities as drivers of growth and opportunity. They expressed readiness to explore all options and present proposals to enhance the higher education funding system. With growing pressures on both universities and students, stakeholders are calling for swift action to stabilise finances and address pivotal issues in the education sector.