Tuition fees should reflect value to society – Hinds

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University tuition fees should reflect the economic benefit graduates will have to the country, the Education Secretary said ahead of a sweeping review of higher education funding.

Damian Hinds suggested the fees charged should reflect the cost of delivering a course and future earnings – potentially signalling a cut in how much arts and humanities students are charged – as well as the needs of the country.

Theresa May will set out further details of the review of the system in England in a speech on Monday, and Mr Hinds said it would examine all aspects of tertiary education.

The review will examine the current system of fees, which currently cost up to £9,250 a year in England.

Mr Hinds said: “I don’t think politicians are going to be setting the cost and the prices for different courses.

“All forms of education, all courses, all subjects have great value, have great worth.

“What we need to look at is the different aspects of pricing – the cost that it is to put on the course, the value that it is to the student and also the value to our society as a whole and to our economy for the future.

“There are some subjects, some areas both in higher education and technical education where we are going to need more of those coming forward in the future because of the changes, because of the new challenges in the world economy.”

The panel carrying out the review could look at all aspects of tertiary education finance including the interest rate on student loans, he suggested.

The influential Commons Treasury Select Committee said the high interest rates – currently  6.1% – on student loans were “questionable”.

“The panel can look at these different aspects,” Mr Hinds said. “We absolutely can’t look at one aspect of the situation in isolation from the others.”

Asked if the review could cover the possibility of a graduate tax rather than the existing system he told the BBC’s Andrew Marr Show it would “look at alternatives”.

But he added: “We think it’s right that if you benefit from a university degree you should make a contribution.

“That is what this current system does. What we are doing in the review is looking at how that system works, making sure there are alternatives, making sure there is more variety.

“That could include lower-cost ways of delivering education, it might mean shorter courses – which also means less time out of the labour market – more opportunities to be able to study while you work.”

Education Secretary Damian Hinds (Stefan Rousseau/PA)
Education Secretary Damian Hinds (Stefan Rousseau/PA)

The review comes amid growing debate about university finance, including student debt and whether students are getting value for money.

The announcements are likely to be met with close scrutiny by university leaders, as some warned that finding the right balance on tuition fees and university finance is likely to mean a “series of difficult trade-offs”.

A spokesman for the Russell Group, which represents 24 of the UK’s most selective universities, said: “Any changes to the current funding model need to be fair and affordable to students, while still meeting the needs of taxpayers and universities in providing students with a high-quality education and experience.”

Sally Hunt, general secretary of the University and College Union (UCU), said the review needed “to be radical and explore genuine alternatives to the current system, not just tinker at the edges of the current failed system”.

Shadow education secretary Angela Rayner (Gareth Fuller/PA)
Shadow education secretary Angela Rayner (Gareth Fuller/PA)

“Another review isn’t going to solve the problem of the hike in interest rates which this Government has done and the tripling of tuition fees.

“Most students have said that the removal of maintenance grants is one of the biggest barriers to them at the moment and the Government has said nothing on that.”

But Mr Hinds defended the decision to scrap grants and replace them with maintenance loans, saying it allowed students to have access to more cash to cope with living costs.

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