Tuition fees: are students right to be protesting?

Get the data behind the decisions to hike up tuition fees. What's the real reasoning behind the policy?
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A student jumps a fence to join students occupying Oxford University's Radcliffe Camera building.
A student jumps over a fence to join other students occupying Oxford University's Radcliffe Camera building. Photograph: David Moir/Reuters

Whether your heart goes out to the students taking to the streets or not you will probably be wondering where all the trouble began.

Since Lord Browne laid out his recommendations for sustainable funding of higher education, the coalition government have been palpably keen to implement almost everything he suggested.

Lord Browne took the view that, with more and more people enjoying a higher education, the government should not keep footing the bill for the research grants and other hand outs to universities.

The argument is that graduate students are more likely to succeed in life, so they could afford to fund universities off the back of the benefits of their higher education. This way the education system will be sustainable, meaning that university funding will grow as the number of high achieving graduates grows.

But Browne wasn't specific about the amount of money needed to make this new sustainable system tick over. The government are left having to pick figures such as what is the upper limit on the tuition fees?

In David Willetts' speech he announced £9, 000 is to be the upper limit for tuition fees, £6, 000 a year the expected average.

Why pick the figure of £9,000 a year for fees? How much do universities look to again in tuition fees after the law goes through? How long, roughly, will it take before universities become sustainable, if student numbers continue to grow and they continue to earn at the rate they currently do?

We have some data that will help to explain the funding of higher education as it was and how it will be.

Are the students right to be protesting? You decide.

Where did the £9,000 a year tuition fees figure come from?

When David Willetts announced that the limits to the tuition fees he failed to mention why this figure was picked.

The answer, though, is found in the Sutton Trust response to the Browne report. The Sutton Trust found from their own research that students from poorer backgrounds would be put off higher education if tuition fees were allowed to climb higher than £9,000.

How much can universities expect to make on tuition fees now?

It's complex to calculate the effects of the tuition fees as so much depends on the future success of graduates and the number of future graduates for generations over time.

Let's do a simple back of envelope calculation of the money expected by universities in the first year of the new tuition fees. There are three pieces of information that are useful:

1. The latest research by Prospects shows that 89.1% of graduate students earn over £22,000 on graduating. This data also shows the expected salaries for graduates in their first year of employment.

2. There are about 500,000 students per year, according to Ucas.

3. On page 9 of the Browne report a table lays out what is expected for students to pay relative to their salary.

Unfortunately the salary bands for the actual earnings of new graduates and the salary bands what graduates will be required to pay under the Browne recommendations are not the same. However, with this data it is possible to make a sensible estimate of the expected tuition fees, as you can see in the 'student graduate salary' sheet in the spreadsheet associated with this post.

That estimate is a total of £412m per year to universities.

How much do we currently spend on higher education?

If we take Tertiary education for the UK in 2009-10, from the Public Expenditure Statistical Analysis or PESA data set, table 6.4 to be exact, we get a total cost of £13bn for this year.

Incidentally, if all 500,000 expected graduates completed a three year course and were charged £9,000 per year in tuition fees, and they then paid back the full £27,000 in their first year of employment, then universities would receive just over £13bn a year.

How much does current higher education cost each taxpayer per year on average?

We know that when public money is spent it isn't entirely accurate to say it is tax payer's money, as public funds come from a mixture of taxation and borrowing. However, to get an idea of the costs of higher education, in a way that is meaningful to people, it is sometimes useful to consider the cost as a proportion of the money an average person pays in tax.

So, if we take the cost of Tertiary education from the Public Expenditure Statistical Analysis or PESA of £13bn, then dividing this into the whole country population (let's say 62m) we get around £200 per person per year.

However, if we say there are 33.3m individuals who paid income tax in 2008/09 (from table 1.4 - number of taxpayers on HM Revenue and Customs stats site), and given that income tax makes up the largest part of national income, then we can say that:

£12.8bn divided into 33.3m income tax payers is about £400 per person per year.

How much has spending on higher education been increasing?

If you are wondering how this funding has changed, then you can see below that higher education funding has been growing relatively steady over the last 5 years.

How much has been cut from the spending review under the coalition government?

Until the Higher Education White Paper is published, it is not certain what public funding cuts universities face. The predications are for a cut of £4bn-5bn from a current funding level, so reducing the budget to about £11.5bn.

You can see from the figures here, universities are looking to be quite severely underfunded, particularly if the implementation of legislation to increase the amount universities can charge in tuition fees is delayed to a year or two down the line. The results of would be quite devastating to students from poorer backgrounds who are the most affected by the fluctuations in funding.

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Data summary

spending on higher education

Click heading to sort

New graduates salary £
% of employees
Number of students (assuming total graduates is 500,000)
Estimate of amount paid in tuition fees in first year of graduation (£)
Amount universities are estimated to receive (£)
16,000 - 19,000 3.6 18000 0 0
19,001 - 22,000 7.2 36000 360 12960000
22,001 - 24,000 31.4 157000 360 56520000
24,001 - 27,000 26.3 131500 360 47340000
27,001 - 31,000 9.8 49000 816 39984000
31,001 - 36,000 11.3 56500 1716 96954000
More than 36,001 10.3 51500 3066 157899000


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