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Policy

Making the higher education system more efficient and diverse

Issue

The government wants to ensure the system for funding universities is financially sustainable. We think this can be achieved by asking graduates - the people who benefit most from higher education - to pay more towards their education than they have in the past.

We also want to ensure higher education institutions provide innovative, high quality learning. We believe the way to do this is by making institutions compete to attract students and the funding they bring with them.

Actions

We are:

Background

In May 2010 the government’s coalition agreement stated our aim to create a more sustainable way of funding higher education.

The Independent Review of Higher Education Funding and Student Finance identified 3 problems with the existing funding system: the need for financial sustainability, wider participation and higher quality. Its report, Securing a Sustainable Future for Higher Education, published in October 2010, looked at the case for a number of possible solutions.

The options considered were:

  1. do nothing (keep current system with no reduction in government funding)
  2. cut the number of students
  3. reduce government funding

The June 2011 Impact assessment: higher education - students at the heart of the system gives full details of these options.

Also in June 2011 we ran a consultation, Higher Education: Students at the heart of the system, on proposals to create a more sustainable way of funding higher education.

And in June 2012 we published our response to the consultation: Government response to consultation on students at the heart of the system.

Who we’re consulting with

We have been consulting on applying student number controls to alternative providers with designated courses. The deadline for responses was 23 January 2013.

Bills and legislation

The Higher Education Act 2004 enabled universities to set their own tuition fees, known as ‘variable tuition costs’, which were introduced from academic year 2006 to 2007.

The Teaching and Higher Education Act 1998 gives the Secretary of State power to make annual regulations setting out the support available to students going into higher education, and how and when student loans will be repaid.

Since academic year 2006 to 2007 a loan to cover the full cost of tuition has been available to eligible students studying at publicly funded providers, which is repaid only after the student has secured employment. This means that no eligible student is required to pay for their tuition up front.

Impact

In 2010 we carried out an impact assessment on our proposals for higher education funding and student finance: Interim impact assessment: urgent reforms to higher education funding and student finance.

Partner organisations

The Office for Fair Access (OFFA) - an independent body that promotes fair access to higher education by monitoring ‘access agreements’. All English universities and colleges that want to charge higher fees must have an ‘access agreement’, which outlines what each institution will do to attract and support students from disadvantaged backgrounds

Higher Education Funding Council for England (HEFCE), which administers public money for higher education teaching and research to universities and colleges. HEFCE helps ensure accountability and promotes good practice in the sector.

Student Loans Company (SLC) - a non-profit making organisation that provides loans and grants to students in universities

The Office of the Independent Adjudicator for Higher Education (OIA) - an independent body that runs a student complaints scheme in England and Wales

UCAS, which manages applications to higher education courses in the UK

The Quality Assurance Agency for Higher Education (QAA) - an independent body that assures standards and improves the quality of higher education

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