Labour hikes tuition fees to £9,535

Labour today announced the first rise in university tution fees in eight years.

Amid fears of a growing financial crisis in the sector, the Government is hiking charges for students from next year.

In a statement to the House of Commons, Education Secretary Bridget Phillipson revealed domestic students will now face maximum fees of £9,535 per year.

Tuition fees had previously remained frozen at £9,250 per year in England since 2017.

Ms Phillipson said the tuition fees cap was being increased by £285 per year due to the 'severe financial challenges' facing universities.

She said there had been a 'significant real-terms decline in their income' due to rampant inflation in recent years.

The Education Secretary blasted the Tories for having failed to take action on university funding.

She said the previous government 'ducked' tough decisions 'time and again' while in power.

In her statement, Ms Phillipson also announced she is increasing the maximum maintenance loans available to students by up to £414 per year from next year.

Laura Trott, the Conservatives' newly-appointed shadow education secretary, said Labour was hiking tuition fees 'when students can least afford it'.

She also attacked Sir Keir Starmer over his previous pledge to 'abolish' tuition fees when he was campaigning to be Labour leader in 2020.

'Perhaps we should start putting sell-by dates on statements the Prime Minister makes,' Ms Trott told the Commons.

How much does university currently cost in the UK? 

The current maximum annual cost for UK students varies depending on where you live and study.

Studying in England: £9,250

Studying in Wales: £9,250

Studying in Northern Ireland: £4,750 for Northern Irish students or £9,250 for other UK students.

Studying in Scotland: Free for the majority of Scottish students and £9,250 for other UK students.

In her statement to MPs, Ms Phillipson said the changes to tuition fees were needed to secure universities' financial future.

'We will fix the foundations, we will secure the future of higher education so that students can benefit from a world-class education for generations to come,' she told the Commons.

'That is why I am announcing today that in line with the forecast set out in the Budget last week, from April 2025 we will be increasing the maximum cap for tuition fees, in line with inflation, to £9,535, an increase of £285 per academic year.'

She added: 'Increasing the fee cap has not been an easy decision, but I want to be crystal clear that this will not cost graduates more each month as they start to repay their loans.

'Universities are responsible for managing their own finances and must act to remain sustainable. But members across this House will agree that it is no use keeping tuition fees down for future students if the universities are not there for them to attend.'

Ms Phillipson added that a lower fee limit of £5,760 will be introduced for foundation degrees. 

The Education Secretary promised to publish proposals on 'major reform' of the universities sector in the coming months.

Ms Trott claimed Labour had 'declared war' on students and pointed out there was 'no sign' of a tuition fees increase in the party's general election manifesto.

She told the Commons that 'students haven't had a chance to prepare for this rise'.

Fellow Conservative MP Richard Holden, a former Tory chairman, said Labur had now 'shafted' students, pensioners, farmers and workers since taking office.

'Ten million pensioners, almost 30 million workers – the IFS say now we are getting less wages because of national insurance tax rises – tens of thousands of farmers, hundreds of thousands of small businesses seeing business rates rising, today: millions of students,' he said.

'Is there anyone that this Government told before the general election 'don't worry', that they haven't since shafted?'

University leaders had been calling for ministers to help institutions struggling financially due to high inflation and a fall in international students.

Due to inflation eroding the real-terms value of domestic fees, universities have been left increasingly reliant on foreign students, who can be charged significantly higher fees than UK students.

In its assessment of university finances in May, the higher education regulator the Office for Students (OfS) said 40 per cent of universities in England were predicted to be in deficit in 2023/24. 

Universities UK (UUK), which represents 141 universities, recently called on the Government to increase funding for teaching in England by linking tuition fees to inflation and restoring the teaching grant.

The blueprint from UUK, published in September, warned that teaching funding per student in England was at its 'lowest point since 2004' and the current £9,250 fee would have been worth £5,924 in 2012/13.

It added that any rise should be accompanied by additional support to help with the cost of studying – including restoring grants for the poorest students.

Tution fees timeline 

From 1962 - University study is effectively free as local education authorities paid fees and offered maintenance grants

1998 - £1,000 fees are introduced in England

2006 - Variable 'top-up' fees of up to £3,000 are introduced in England

2012 - Fee cap is increased to £9,000 in England

2017 - Fee cap is increased to £9,250 in England

2025 - Fee cap to rise to £9,535 in England 

Responding to todays' announcement, UUK chief executive Vivienne Stern said: 'A decade-long freeze in England has seen inflation erode the real value of student fees and maintenance loans by around a third, which is completely unsustainable for both students and universities.

'Keeping pace with inflation stops the value of fees going down year after year.

'Importantly, this change will not see students paying more to study upfront; repayments are linked to earnings above a £25,000 threshold.

'The increase in maintenance loans is also very welcome and important.'

But the University and College Union (UCU) described the tuition fees hike as 'economically and morally wrong'.

General secretary Jo Grady said: 'Taking more money from debt-ridden students and handing it to overpaid, underperforming vice-chancellors is ill-conceived and won't come close to addressing the sector's core issues.

'As Keir Starmer himself said last year, the current fees system doesn't work for students and doesn't work for universities.

'The model is broken; it has saddled students with decades of debt, turned universities from sites of learning into corporations obsessed with generating revenue, and continually degraded staff pay and working conditions.'

Professor Shitij Kapur, vice-chancellor of King's College London (KCL), had previously suggested that universities in England needed between £12,000 and £13,000 per year in tuition fees to meet costs.

Kate Ogden, senior research economist at the Institute for Fiscal Studies, said: 'University vice chancellors will be breathing a sigh of relief that the Government is not extending the tuition fee freeze, sparing universities a further real-terms cut to resources of around £390 million next academic year.

'Of course, higher fees today mean higher student loan repayments in the long run – with graduates eventually repaying around three-quarters of the extra borrowing resulting from today's announcement.

'Living cost support for students will also be protected in real terms.

'But crucially, the Government has decided not to reverse the substantial real-terms cuts in the generosity of support seen in recent years.

'Even after the uplift, the poorest students will be entitled to borrow around 9 per cent less next academic year than an equivalent student 5 years earlier.'

Jeremy Corbyn, Sir Keir's predecessor who pledged to abolish tuition fees when he was Labour leader, branded the rise in fees as a 'disgrace'.

He said: 'Government ministers might not be in Parliament today had they not benefited from free tuition.

'Now, they are lumping the next generation with even more student debt. Young people deserve better. Abolish tuition fees now.'

Zarah Sultana, who was suspended as a Labour MP in July for voting against Sir Keir over the two-child benefit cap, branded the rise in fees as 'wrong'.

'The Government's increase to tuition fees is wrong,' the Coventry South MP said. 'Students shouldn't have to pay tuition this year, or any year.'

'It's time to abolish tuition fees and cancel student debt because education is a public good, not a commodity.'

Money saving expert Martin Lewis said the decision to raise tuition fees is 'necessary' but 'relatively trivial' for most students, and that the maintenance loan increase 'isn't enough'.

He told Times Radio: 'I think the tuition fee rise was a necessary change because the funding of universities has been so dire. It is also a relatively trivial change for most students.

'For the last few years, maintenance loans, living loans in England have been going up by far less than inflation. They've been decimated.

'It means many people, especially from non-traditional university backgrounds, cannot afford to live while at university, and that is tragic for social mobility.

'This rise isn't enough, but it's better than we have been having over the last few years.'

Education policy analyst Tom Richmond, host of Inside Your Ed podcast, said - if Labour continued with yearly fees hikes in line with inflation - then 'we'll hit £10,000 tuition fees in this Parliament.'

Dani Payne, senior researcher at the Social Market Foundation, said: 'The announcement this afternoon for a one-off inflationary rise to tuition fees and maintenance loans is a sensible and necessary step given the financial pressures facing institutions and students, but must come hand-in-hand with greater financial accountability from universities.

'With over a third of providers reporting deficits, and growing concerns about the potential of institutions collapsing entirely, it is right that the Government has stepped in to stabilise the sector.'

Iain Mansfield, head of education at Policy Exchange, said: 'It is hard to justify heaping additional debt upon young people before requiring corresponding reforms on teaching quality, high standards and contact hours, to ensure every student gets the high quality experience they deserve.

'In their manifesto, Labour said 'The current higher education funding settlement does not work for the taxpayer, universities, staff, or students.'

'Today's decision simply reinforces the current debt-fuelled system that neither supports young people nor delivers the skills that the economy needs.'

When he was campaigning to be Labour leader in 2020, Sir Keir pledged to 'support the abolition of tuition fees' but later rowed back on that promise.

During the general election campaign this year, the Labour leader said he had abandoned his pledge in order to prioritise tackling NHS waiting lists. 

Speaking in August, Ms Phillipson said raising tuition fees would be 'really unpalatable' but did not rule out Labour doing so.

The previous government raised the cap on university tuition fees in England to £9,000 a year in 2012, but it had been fixed at £9,250 since 2017. 

Asked whether tuition fee caps would be increased in the next five years, Ms Phillipson told Sky News this summer: 'I do recognise the challenge, and I hear that message from institutions as well, but I think that's a really unpalatable thing to be considering.

'Not least because I know that lots of students across the country are already facing big challenges around the cost of living, housing costs, lots of students I speak to who are already working lots of jobs, extra hours, in order to pay for their studies.'

Less than a month earlier, the Education Secretary told the BBC that Labour had 'no plans' to increase fees.

What has Labour previously said on tuition fees? 

2020 - 'Support the abolition of tuition fees'

When he was campaigning to be Labour leader in 2020, Sir Keir Starmer said he would 'support the abolition of tuition fees' among his 10 key pledges.

22 July, 2024 - 'No plans' to increase tuition fees

On 22 July, little more than two weeks after winning power, Labour's Education Secretary Bridget Phillipson said there were 'no plans' to raise tuition fees.

She told BBC Radio 4: 'We have no plans at this stage, we want to look right across the board to make sure we are putting our universitites on a stable footing.'

15 August, 2024 - Tuition fees rise 'really unpalatable'

Speaking to Sky News on A-Level results day on 15 August, Ms Phillipson said a tuition fees rise would be 'a really unpalatable thing to be considering'.