- Video report by ITV News National Editor Allegra Stratton
University tuition fees should be cut from £9,250 to £7,500 per year to give students better value for money, an independent education review has recommended.
The Post-18 Education and Funding review, led by Philip Augar, also recommended the reintroduction of maintenance grants to less well-off students.
Overall sector income could then be protected by an increased contribution by the government to teaching costs.
In a wide-ranging look at England and Wales' higher education system, the panel found student loans are not well understood by pupils, and that the name of the system should be changed to the Student Contribution System.
It said the system should be overhauled to reduce in-study interest charges but to increase the proportion of loans that is eventually repaid.
ITV News National Editor Allegra Stratton explained tuition fees was very much a political hot potato for the next prime minister.
- ITV News National Editor Allegra Stratton provides an analysis of the review
The report also suggested the repayment period of student loans should be increased from 30 to 40 years - meaning graduates will end up paying more over time.
Proposals for disadvantaged students include the reintroduction of maintenance grants of at least £3,000 a year, which was scrapped by the Conservative government in 2016.
The recommendations have been advised to come into force for 2021/22 and would not be applied retrospectively.
This means students in higher education now would not be effected by the proposed recommendations if there were applied.
So what are the main recommendations?
- Cap tuition fees at £7,500 a year
- Fee cap should be frozen until 2022/23, then increased in line with inflation from 2023/24
- Reintroduce maintenance grants for poorest students to at least £3,000 a year
- Change the name of student loans to "student contribution system"
- Withdraw financial support for foundation years attached to degree courses after an "appropriate notice period"
- Lower the repayment threshold where people start paying back student loans from £25,725 - meaning graduates will contribute more back each year
- Loans should be wiped after 40 years instead of 30 years
- Remove in-study interest, so that loan balances track inflation during study
Martin Lewis, the founder of MoneySavingExpert.co.uk, wrote on his website that the current system of student finance was "broken" and welcomed the review.
But Mr Lewis, who gave evidence to the Augar report, said the proposal to lower the repayment threshold and the decision to lengthen the repayment period will mean graduates will end up repaying more over time.
He said: "Thankfully, unlike most politicians, Augar and his committee do actually understand how student finance works, and he’s produced a cohesive plan based on his and the government’s set aims.
"I’m happy that a few of his proposals are specifically based and sometimes attributed to my and MSE’s suggestions."
Despite praising the report's intentions, Mr Lewis described some of the proposals as "regressive".
He said: "Overall, the student finance system is progressive – a no-win, no-fee system – meaning those who earn more after university will repay more.
"But these changes, compared to the current system, are regressive meaning they disproportionately help higher earning graduates."
Labour's shadow education secretary, Angela Rayner, said the review was "all talk, empty promises and very little action."
She said: “It means nothing without Government action – which will not be forthcoming while the Conservatives are locked in an internal conflict over their leadership and are incapable of governing."
She added: “The report alone does nothing to address the burning injustices facing our education system.
Green MP Caroline Lucas said the government should commit to plugging the gap in funding, should tuition fees be reduced to the recommended £7,500 level.
- Government backs report's proposals
Prime Minister Theresa May is expected to welcome a number of the recommendations in a speech on Thursday.
However with a change of Conservative leader expected within weeks, there is no guarantee the recommendations will be followed.
She said: “I was not surprised to see the panel argue for the reintroduction of means-tested maintenance grants both for university students and those studying for higher technical qualifications.
“Such a move would ensure students are supported whichever route they choose, and save those from the poorest backgrounds over £9,000.
“It will be up to the Government to decide, at the upcoming Spending Review, whether to follow this recommendation.
“But my view is very clear: removing maintenance grants from the least well-off students has not worked, and I believe it is time to bring them back.”
Mrs May also called for reform to tuition fees to ensure value for money for students and the taxpayer.
She said that while the majority of courses provide good outcomes for students, this is no longer true across the board, and many courses do not cost £9,000 per student per year to teach.
Despite the Government boosting education or training places for every 16 to 19-year old, rolling out T Levels, and creating high-quality apprenticeships, the Prime Minister saidmore must be done for the 50% of young people who do not go to university.
Dr Augar, chairman of the panel, said: “Our work revealed that post-18 education in England is a story of both care and neglect, depending on whether students are amongst the 50% of young people who participate in higher education or the rest.
“The panel believes that this disparity simply has to be addressed.”
"For too long, we've had a system that works for half the population whilst neglecting the other half," said David Hughes, chief executive of the Association of Colleges.
A total of 53 recommendations for Government cover the 50% of young people who do not attend higher education, as well as the 50% who do.
Tuition fees in England were trebled in 2012, and the vast majority of courses now cost the maximum, £9,250 per year.
According to estimates by the Institute for Fiscal Studies (IFS), the average student can now leave university owing more than £50,000.
But the panel is recommending the cap on the fee chargeable should be reduced to £7,500 per year, and could be introduced by 2021/22.
Responding to the review, the Fair Access Coalition said: “A lot of progress has been made in widening access to higher education, but we need to be careful that these gains are not sent into reverse.
“There is a lot to be welcomed in the Augar recommendations.
“An increase in maintenance support, more support for part-time degrees, greater flexibility to gain a degree through bitesize courses, a funding boost for further education, are all welcome steps.
“But they will do nothing to improve social mobility overall if the funding for widening participation activity is cut.”
- What do students think?
ITV News correspondent Rupert Evelyn has been speaking to students at the University of Exeter on Thursday, following the publishing of the report.
The students which sat down with Rupert agreed the reintroduction of maintenance grants for the poorest students was a good thing.
However there were some disagreements about the increased longevity over which students would have to pay back their loans.
Jeeves Sidhu, a second year politics student, said: "I would choose 30 years, 100 per cent.
"I think the way that this review has been spun is that it is better for students because its cheaper, but if you have a look at what Martin Lewis, on average students will have to pay back £180 more a year, so I think its completely psychological, it's not going to help many students."
He added: "I think its quite important that we have tuition fees and I know its a massive issue for young people... but personally, I think it's really important that we have tuition fees, maybe not to the level that we have at the moment, but it makes you have a stake in your education."
Ben Sturt, a philosophy and politics student, said: "I think in terms of reducing tuition fees from £9,250 to £7,500, perhaps it would be a psychological thing.
"I know many people who could have come to university, should have come to university, would have got a lot from coming to university, but are put off by the numbers and the cost."