Student tuition fees could rise again, warns former Universities Minister David Willetts

Willets argues that universities should be allowed to increase fees in line with inflation for the lifetime of this Parliament

A warning that student fees could rise again was delivered by former Universities Minister David Willetts as he insisted the ceiling of £9,000 a year could not be held indefinitely.

In a pamphlet published by the Policy Institute at King’s College London, Mr Willetts - who was minister when the current system was introduced - argues that, as a first step universities should be allowed to increase them in line with inflation for the lifetime of this Parliament.

In addition, he wants the level at which students have to repay loans for their fees to be frozen at the current level of £21,000 - again for the lifetime of this Parliament.

Under an agreement with the Liberal Democrats at the time of its introduction, the ceiling was allowed to increase every year in line with inflation.

His comments come as financial experts warn up to 45 per cent of student debt will remain unpaid when the 30-year period during which debts can be repaid comes to an end - costing billions of pounds.

However, Mr Willetts acknowledges in the pamphlet that universities have not won the argument for higher fees and indicates they must be made to provide clear evidence of how they will spend fee income before they are allowed to charge beyond £9,000 a year.

On the repayment threshold, he argues that lower than expected wage inflation has made the £21,000 a year ceiling appear higher than was expected.

“The high repayment threshold was seen as a generous and attractive feature of the Coalition Government’s arrangements - whereas we have learned that slow pay back is not particularly popular,” he says.

Asked whether they preferred the previous threshold for repayment of £15,000 a year, 44 per cent of parents said they did as against 36 per cent who did not.

Mr Willetts also argues that there should be a five-yearly review of student finance at the start of each government - which could decide issues like reducing the threshold for repayment and/or increasing fees.

In addition, he wants to see increased spending on student maintenance arguing: “In my experience they (students) are far more worried about the cash they need to live on now than about repaying through PAYE at a rate of nine per cent of their earnings above a high threshold.”

To cushion the blow for the exchequer, this extra funding could be provided through loans - rather than a cash grant.