Long-awaited higher education reforms leave universities facing funding squeeze

The government has announced a package of higher education reforms, which it claims will provide a fairer deal for students, graduates, universities and the taxpayer. However, critics argue that changes to student loans will hit new graduates on lower and middle incomes, while universities are faced with further financial pressures, as tuition fees are frozen for another two years.

The long-awaited reforms are in response to the Augar review of post-18 education published in May 2019. For new student loans, the government will increase the repayment term from 30 to 40 years and lower the repayment salary threshold to £25,000 from £27,250. It will also lower interest rates, so loan balances increase only with the retail price index of inflation from the academic year 2023–24.