Letter from Bill Rammell MP, Minister of State for Lifelong Learning, Further and Higher Education

Thank you for your email of 29 January, enclosing a copy of the NUS Briefing, 'The future sustainability of the higher education sector'. You also copied your email and the Briefing to David Amess MP, who in turn wrote on your behalf to Alan Johnson. I have recently replied to that correspondence on the secretary of State's behalf in my capacity as Minister for Lifelong Learning, Further and Higher Education.

I do appreciate that the NUS is concerned about any increase in the £3000 cap on tuition fees and its impact on thoses planning to attend university in the future. As you will be aware Charles Clarke, when Secretary of State for Education and Skills, announced in in January 2004 during the passage of the Higher Education (HE) Act that an Independent Commission would look at all aspects of the new fee arrangements based on the first three years' operation of the policy and report to Parliament. The main areas that the Commission's review will cover are: the impact of the new arrangements on Higher Education Institutions (HEIs); the impact of the new arrangements on students and prosepective students; and the scope for future policy changes to the graduate contribution scheme and the upper limit for variable tuition fees.The Commission itself has yet to be established but once a Head of Commision and other Commission members have been appointed, they will decide upon the way which they will take evidence to inform their independent review. We anticipate that the commision willl report to Parliament in 2009.

In the meantime, let me assure you that there is absolutely no prospect of the fee cap for United Kingdom (UK) and European Union (EU) full-time undergraduates being lifted before 2010 at the earliest. Other than the annual adjustments for inflation to the current fee cap of £3000 for new students (and of £1200 for continuing students), the present arrangements will be maintained as they are until at least 2010 to allow time for the 2009 independent Commission to report to Parliament on what it sees as the best way forward. The government will then consider the Commission's recommendations; and Parliament will then decide whether there should be any change in the fee cap.

Higher Education in this country is worth about £50 billion to the economy and well over two million students now benefit from the opportunities it offers. In supporting a mass higher education system the Governement and the taxpayer need to share the costs with the immediate beneficiaries, the graduates. After all, graduates can still expect to enjoy lifetime earnings of well over £100,000 greater than those with only A levels or equivalent. Yet we provide a generous level of student funding. Recent UK research has shown that, on average, the changes to the student package have actually made students better off. Upfront tuition fees have been abolished, graduates only need to repay their student loans once they start to earn over £15,000 a year: and around half of full-time students starting in 2006/07 are benefitting from HE maintenance or special support grants coupled with institutional bursaries.

I am particularly concerned to ensure that the chance to participate in HE should not be denied to those from poorer backgrounds. Your NUS Briefing Paper suggests that student debt is increasing significantly and affects the poor disproportionately. We have consistently said that we expect student debt to average out at about £15,000 after the introduction of variable fees. However, their eligibility for grants and bursaries worth at least the tuition fees cost means that lower income students need not be deterred by the prospect of debt.

Indeed, the data on full-time applicants for 2007 from UCAS published in February shows that, following the expected fall in 2006, numbers are up by 7.1% -and by 2.4% since 2005, confirming a continuing rising trend - and there is no indication that the proportion of new students from non-traditional backgrounds has declined. I am delighted that we are seeing a big increase in applicants. The decision to no longer ask students to pay for fees before university has really helped, effectively creating a graduate repayment system. Restoring non repayable grants for poorer students and introducing bursries to the less well off has made the new package rightly progressive. These highest ever figures show that tuition fees are not putting sudents off applying to going to University as many predicted. The critics of the new system are being proved emphatically wrong.

Of the extra £1.35 billion that was raised from tuition fees, about £350 million will be ploughed back by institutions as bursaries to support students from less well-off families and we have of course abolished up front tuition fees and replaced loans with grants for poorer students. These are not just for the brightest or very poorest.

Finally, we are determined to ensure that the HE system in this country remains world class. At the moment, about half of the funding for HEIs comes from central government, around a quarter comes from regulated and unregulated tuition fees, and the remaining quarter comes from the income earned from business, research charities, local authorities and other employers. About 1% comes from the income from endowments but this is starting to increase. We want to ensure that institutions continue to be successful in raising extra income from these sources while we maintain core funding per student in real terms in making Government grants available.

I do hope this information clarifies the position for the NUS in relation to HE support system.

Yours sincerely,

Bill Rammell MP