UNI BLOW
Keir HIKES university tuition fees to whopping £9.5k a YEAR in shock U-turn years after promising to axe hefty bill
It will see tuition fees rise in line with the Retail Price Index inflation
UNIVERSITY fees will be hiked by hundreds of pounds a year in Sir Keir Starmer's latest screeching U-turn.
Despite the PM previously pledging to scrap fees altogether, for the first time in eight years the cost of studying will rise in line with inflation.
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The move, coming into force in April 2025, will see the cost of an undergraduate degree shoot up from £9,250 to £9,535 per year.
Maximum maintenance loans will rise from £10,227 to £10,544 for poorer students to help cover the cost.
A lower fee limit of £5,760 will be introduced in 2025 for foundation years in classroom-based subjects, including business and humanities.
Announcing the hike today in the Commons, Education Secretary Bridget Phillipson said: "Increasing the fee cap has not been an easy decision, but I want to be crystal clear that this will not cost graduates more each month as they start to repay their loans.
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"Universities are responsible for managing their own finances and must act to remain sustainable.
"But there is no use keeping tuition fees down for future students if the universities are not there for them to attend."
While running to replace Jeremy Corbyn as Labour leader in 2020, the PM stood on a platform vowing to end fees, which he slammed as "unfair and ineffective".
In May 2023 he dropped the promise, blaming the economy and insisting the need to prioritise the NHS.
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But in June last year Ms Phillipson wrote an article for The Times pledging that ";graduates, you will pay less under a Labour government".
Blasting the U-turn on her first day in the job, Shadow Education Secretary Laura Trott accused the PM of "declaring war" on business, farmers and now students.
She said: "We should start putting a sell-by doubt on Keir Starmer's promises."
Shadow Education Minister Neil O'Brien said: "Starmer says one thing then does another.
"A couple of months ago the Education Secretary said Labour had 'no plans' to increase tuition fees.
"You can't rely on anything they say."
Analysis
By JACK ELSOM, Chief Political Correspondent
RAISING tuition fees by around £300 a year may not seem like much in the grand scheme of things.
But for years the issue has been a politically-loaded timebomb that successive governments have dodged.
It is especially awkward for Sir Keir Starmer, who ran his Labour leadership campaign on a ticket to axe the £9,250 student payments altogether.
Four years later and now he’s ushering in the first increase since 2017.
He need not be reminded how a similar u-turn ended for Nick Clegg. Remember him?
Ministers believe they were left with no choice: many universities have been warning they are teetering on bankruptcy.
And letting them charge more in tuition is surely better than using taxpayer cash to bail them out at a later stage.
But it won’t stop many students feeling they are getting a duff deal compared to previous generations. It is less than 30 years since £1,000 fees were first introduced in 1998.
Critics also want universities to look at themselves: many are promoting “Mickey Mouse degrees” with dire job prospects.
And despite claiming to be broke, more than 10,000 university fat cats raked in six-figure pay packets last year.
Time will tell how this increase is received.
Industry body Universities UK this evening welcomed the fee rise as "the right thing to do".
UUK chief executive Vivienne Stern said: "Thriving universities are essential to a thriving UK, delivering stronger growth, better public services and improving individual life chances.
"A decade-long freeze in England has seen inflation erode the real value of student fees and maintenance loans by around a third, which is completely unsustainable for both students and universities.
"Keeping pace with inflation stops the value of fees going down year after year."
Research by the Institute for Fiscal Studies said that if the current cap is unfrozen in the next financial year, tuition fees could rise to £9,450.
By the end of the current term, the cap would stand at around £10,500 on current forecasts.
Students are eagerly awaiting their A-Level results today with thousands set to get top marks & avoid clearing
How do tuition fees work?
Tuition fees are usually covered by a tuition fee loan from Student Finance.
This loan is paid directly to the university or college on your behalf.
Repayments start from the first April after you finish or leave your course, but only if your income exceeds a certain threshold.
You repay 9 per cent of your income above the repayment threshold.
This means that the majority or basic-rate taxpayers lose 37p for every £1 they earn above the threshold - 20p as income tax, 8p as national insurance and 9p for a student loan.
Your repayment threshold will vary depending on when you studied at University.
Interest is charged on your loan from the day you receive the first payment until it is repaid in full.
However, it's important to note that any remaining debt can be written off after a set number of years, even if you haven't repaid the total amount.
How have student loan repayments changed?
STUDENT loan repayments are based on your earnings and not the size of the debt.
However, when you start making repayments or when your student loan amount is written off will depend on when you went to University.
Plan 1 - 1998-2012
If you took out a student loan between 1998 and 2012, you'll be bound by the Plan 1 repayment rules.
These students only start repaying their loans when their salary breaches the threshold of £24,990 a year.
You'll pay 9 per cent back once your salary breaches this threshold.
The interest rate charged on these loans is based on either RPI or the Bank of England rate - whichever is lower - plus one percentage point.
These loans are written off after 25 years.
Plan 2 - 2012-2023
If you took out a student loan between 1998 and 2012, you'll be bound by the Plan 2 repayment rules.
These students only start repaying their loans when their salary breaches the threshold of £27,295 a year.
You'll pay 9 per cent back once your salary breaches this threshold.
The interest rate charged on these loans is based on RPI plus up to three percentage points - dependant on your income.
These loans are written off after 30 years.
Plan 5 - 2023-present
If you took out a student loan from 2023 onwards, you'll be bound by the Plan 5 repayment rules.
These students only start repaying their loans when their salary breaches the threshold of £25,000 a year.
You'll pay 9 per cent back once your salary breaches this threshold.
The interest rate charged on these loans is based on RPI only.
These loans are written off after 40 years.
What about maintenance loans?
In addition to tuition fee loans, students can also receive a maintenance loan worth up to £13,348 to help with everyday living costs.
Like a tuition fee loan, maintenance loans must be repaid following the same repayment rules outlined above.
It's understood that ministers are exploring potential policies, including reinstating maintenance grants for students from low-income families.
However, nothing has been confirmed as of yet.
A maintenance loan is paid directly into your bank account at the beginning of each term.
This means typically you'll receive three payments a year.
The loan is meant to cover your living costs during your studies and most people use it to help pay for rent.
You won't need to use this money on your tuition because that is paid for separately.
However, your household income during the application process could affect how much you're entitled to.
For example, depending on household income, those living at home can get a maintenance loan worth between £3,790 and £8,610.
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If you're living away from home and not in London, you could receive a total of between £4,767 and £10,227.
And if you're living away from home and in London, you could be eligible for a maintenance loan between £6,647 and £13,348.
Check for student loan overpayments
MILLIONS of people who went to university have overpaid their student loan and could be due money back.
It's not just recent graduates affected, and many could now be in their 30s and 40s.
You're only supposed to start paying back your loan once you earn above a certain amount.
This amount depends on when you started your course, and thresholds have increased over the years as average salaries have risen.
However, many graduates have been caught out repaying loans even though their earnings weren't high enough.
Repayments are automatically taken through work payroll systems – usually when monthly income suggests that yearly salary will be over the threshold.
But if you earn more in a month – because of bonuses, overtime or irregular hours – it can wrongly trigger repayments.
Other system errors might also have meant you overpaid.
You shouldn't have any payments taken until April after you've graduated, even if you’re over the earnings threshold, but mistakes can occur.
You might also have been put on the wrong loan repayment plan or had money deducted after you've paid off your loan.
Dig out your payslips to check if you're owed a refund on some of your student loan repayments.
Then, check your total annual income and look at when your loan repayments started in case they began too soon.
You can also cross-check this information with your paper statements from the Student Loan Company online.
If you're due a refund, you can complete an online request form on the government website.
Find out more by visiting www.gov.uk/repaying-your-student-loan/getting-a-refund.
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