UK undergraduate tuition may need to rise to £12,500 per year to break even

Tuition fees in England would need to rise to £12,500 per year to break even, according to an analysis presented to vice-chancellors.

This was discussed among higher education leaders who attended the recent Universities UK (UUK) annual conference, amid growing concerns over the deepening financial crisis facing universities.

The leaders were cautioned that requesting a 35% increase in undergraduate fees from the current £9,250 would make them appear “out of touch.” Consequently, a UUK task force is likely to propose a smaller increase.

Shitij Kapur, the vice-chancellor of King’s College London, explained that the last time universities in England managed to break even on undergraduate teaching costs was in 2015-16 when tuition fees stood at £9,000. Adjusted for inflation, this figure would now amount to £12,000-£13,000.

Kapur acknowledged that while £12,500 per year might accurately reflect the true cost of an undergraduate degree, it was unrealistic to expect the government or the public to agree to such an increase.

A spokesperson for Universities UK (UUK) argued that if teaching investment had kept pace with inflation, funding per student would now range between £12,000 and £13,000.

However, UUK is not proposing an increase in tuition fees to this level but are emphasising that a growing share of the financial burden is falling on graduates, making the UK increasingly unusual in comparison to other countries in its reliance on students to fund higher education.

“If we suddenly say we’ll go from £9,250 to £12,500, might we seem so out of touch and clueless that we would lose?” Kapur said.

Meanwhile, David Willetts, a former Conservative universities minister and member of the UUK commission, expressed his belief that the new government was open to negotiating a deal with universities in England for increased funding.

“There’s genuine anxiety in government about universities going bust. Nobody wishes to face that crisis, and the person who has that ministerial responsibility has had that at the back of their minds, along with a ‘risk register’ of problem cases.

“And I think that risk register is looking riskier and more exposed than for a very long time,” Willetts said.

“Secondly, we need to get on with it because students are getting a very raw deal. Setting aside financial crisis, it’s just gradually eroding the quality of the student experience – lectures become more crowded, labs are less well equipped with up-to-date kits. Those are ways in which the education of the next generation is suffering.”

The debate surrounding tuition fees has intensified as several universities face significant financial pressures, with rising costs such as staff salaries further eroding the value of current tuition fees. The Conservative government initially raised the fee cap in England to £9,000 per year in 2012, but it has remained frozen at £9,250 since 2017.

Against this backdrop, research published by Universities UK (UUK) revealed that only 16% of the cost of a university degree is funded by the government, with the remaining 84% being shouldered by graduates. Moreover, the research estimates that for every £1 the government invests, an additional £14 is generated through graduates’ economic activity.