Increased student fees will force national debt to rocket, warns report

18 May 2012

The government's reforms of higher education funding, including fees of £9,000, will force public sector debt to increase by as much as £100bn over the next 20 years, warns a report released today.

UCU said the report's warnings proved the government's university funding plans were based on ideology and had nothing to do with tackling the national debt.
 
From September students at English universities will borrow up to £9,000 a year loans to cover the cost of their tuition, following huge cuts in government funding.
 
The research, from the Intergenerational Foundation (IF), predicts the cost to public finances of higher loans could rise above the Office of Budget Responsibility's current forecast of £50bn to as much as a £100bn in twenty years' time.
 
According to the IF, the rise in annual student loans costs will be between £5-6bn a year - far more than the £3bn annual savings achieved through cuts to universities' teaching grants.
 
The study also criticises the government for not realising that higher student loans will lead to a rise in the Consumer Price Index (CPI) that could add £2.2billion to the social security budget by 2016.
 
UCU general secretary, Sally Hunt, said: 'This report confirms that the government's punitive budget cuts have absolutely nothing to do with reducing the national debt and everything to do with their desire to shift the funding of higher education from the state to the individual.
 
'Instead of being guided by ideology and adding billions to the national debt ministers should follow the example of other countries and invest in higher education.'

Read the IF report here.

Last updated: 14 March 2019

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