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Students entering HE from September 2006

This factsheet outlines how some of the Government’s new arrangements for funding higher education will affect full-time undergraduate students, potential students and their parents.

In summary, the new system will mean:

• No upfront tuition fees. At present students have to pay their tuition fees in advance. From 2006 students will be able to defer paying their fees until after they leave higher education. They will be able to take out a fee loan in much the same way as they take out a maintenance loan now.
• More financial support to able students from lower income households, in the form of non-repayable grants.

The bulk of the cost of higher education is met by the Government. What an individual student has to pay will depend on their financial circumstances, and those of their household.

Here is a breakdown of how the system will work from September 2006:

• The requirement to pay tuition fees up-front will be abolished for all full-time undergraduate students. Instead, students will be able to defer paying their tuition fees until after they leave higher education, by taking out a fee loan from the Student Loans Company in much the same way as they take out a maintenance loan now. (Students who start their courses before 2006 will also be able to defer their fees by taking out a fee loan if they wish).
• The Government will allow universities to charge tuition fees of up to £3,000 per year. This will only affect new full-time undergraduates. (Students who start their course before 2006 will not be affected). The maximum universities can charge will be capped at £3,000 a year until at least 2010 (apart from an adjustment to take account of inflation).
• For full-time undergraduate students from lower income households, the Government will provide a means-tested maintenance grant (non-repayable) of up to £2,700 a year. Repayable maintenance loans will continue to be available.
• Universities will only be permitted to charge variable fees of up to £3,000 if they sign an Access Agreement with the new Office for Fair Access (OFFA), showing how they will ensure that disadvantaged students are not deterred from their chosen university because of the higher fees. All universities charging the full £3,000 fee for a course will have to provide additional support worth at least £300 to students on those courses who receive the full grant of £2,700.
• The Government will raise the maximum rate of the student maintenance loan, which is administered by the Student Loans Company, to match the average student's expenditure on basic living items from 2006. The biggest increase will be in London. Loans will continue to be partially means tested, as at present, depending on a student’s income and that of their household.
• For students starting their course in 2006 or later, the Government will write off the balance of their student loan after 25 years. (Arrears owing at the 25-year cut-off point will not be written off).