Education Financing Doesn’t Always Add Up for Students

| March 24, 2015

The cost of education is not a trivial expense for most families. So despite the importance of higher education, students are finding a hard time covering England’s university fees. And though there are limits imposed on publicly funded universities in England and Wales, meeting the current tuition thresholds still requires substantial financing from students and their parents.

There is a movement under way to make university tuition more affordable, in hopes of restoring the promise of accessible education for each UK citizen. But during contentious economic times, even well-meaning education funding comes under close scrutiny. The future of university tuition is uncertain, but detractors point to an affordability gap that leaves many students on shaky financial ground.

Public University Tuition Fees

Tuition in the UK is governed by two distinct scales; covering home students at one level and international students at another, higher rate. Home fees encompass EU students, who benefit from resident tuition rates.

The future of university tuition is uncertain, but detractors point to an affordability gap that leaves many students on shaky financial ground.

Home students pay a maximum of £9,000 annually to attend publicly funded universities. Though institutions have discretion on the amounts charged, many bill the full allowable amount. The figure is limited to around £3,600 per year in Northern Ireland, and university education is largely free in Scotland. There is an important distinction present in Scotland, however, which considers “home” students to be only those from Scotland herself. Welsh students also benefit from specific tuition relief, with their contribution capped at less than £4,000 each year. The government funds the balance for study conducted anywhere in the UK.

Time for Reform?

Labour’s Ed Miliband sees the £9,000 annual tuition charge as too high, so he is getting a lot of attention for his steadfast pledge to reduce rates. Mr. Miliband would like to see students pay no more than £6,000 a year for university tuition in the UK. And he hopes to see the change enacted as soon as 2016.

Of course, paying for the reductions is a hotly contested issue. Mr. Miliband proposes adjustments to tax relief for pensioners earning substantial incomes. Opponents call it unfair to pension holders, but education advocates point to high-levels of student debt upon graduation and other negative economic ripples extending from the current tuition levels. The data bears hopeful returns, however, as some studies show how taxpayers and universities will ultimately benefit from the new terms put-forth.

Maintenance Loans Don’t Make Ends Meet

Under current financing options available through student finance, loans are available to cover the entire cost of tuition for most students. The money must ultimately be repaid, however, so the tuition rate has a substantial impact on post-graduate debt. The deferred nature of tuition payments can be misleading, as students are not reminded of the massive debt until graduation. Daily living expenses, on the other hand, cannot be swept under the rug.

In addition to loans earmarked for university tuition, students are also eligible for funding designed to cover living expenses. Unfortunately, the maximum loan levels are falling far short of actual expenses, calling on students and parents to make up the out-of-pocket difference. Requiring additional annual resources in the thousands, many university families are buckling under the pressure of day to day cost of living.
Rent, food, transportation and other university costs are offset by government loans. London students qualify for nearly £8,000 each school year, while students in areas outside London are eligible for slightly more than £5,500 annually. These maintenance loans provide essential higher education financing, but are falling short in practice. To make up the difference, students are turning to private loans and counting on parents for extra support.

Even with grants and various available loans, the cost of higher education quickly climbs beyond affordability for many students. And while tuition is itself a substantial part of the equation, daily living expenses pose even greater problems for some students. A current campaign for tuition reductions may very well bring relief for struggling students and parents, but additional funding options are also required to fulfill the government’s promise of accessible higher education.


Category: Education, Student Loans

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