• Student finance reform

David Willetts is live on The Student Room today at 5:30 to answer your questions. Submit your questions here

A clip showing highlights from Young Voters' Question Time featuring David Willets:

Details of the Government's plans for reform of higher education and student finance:

Graduate contribution

  • Any university or college will be able to charge a graduate contribution of up to £6,000.
  • In exceptional cases, universities will be able to charge higher contributions, up to a limit of £9,000, subject to meeting much tougher conditions on widening participation and fair access. It will be up to the university or college to decide what it charges, including whether it charges at different levels for different courses.
  • Any university or college will be able to charge below £6,000. Universities and colleges wanting to charge above £6,000 a year will have to show how they will spend some of the additional income making progress in widening participation and fair access. The Office for Fair Access will be able to apply sanctions in cases where universities do not deliver on the commitments in their access agreements, up to and including withdrawing the right of the university to charge more than £6,000.

Loans and maintenance grants

  • The Government will lend any eligible student the money to pay the university or college for tuition costs. For the first time, part-time students will be entitled to a loan and no longer forced to pay up-front costs, so long as they are studying for at least one third of their time.
  • A new £150m National Scholarships Programme will be targeted at bright potential students from poor backgrounds. It will guarantee students benefits such as a free first year or foundation year.
  • Students from families with incomes of up to £25,000 will be entitled to a more generous student maintenance grant of up to £3,250 and those from families with incomes up to £42,000 will be entitled to a partial grant.
  • Maintenance loans will be available to all irrespective of income.
  • Further details of loan rates for students living at home, those living away from home and studying in London, and loans for longer courses will be provided in due course.
  • Students deferring from 2011/12 to 2012/13, will be able to apply for loans and grants at the 2012/13 rates. Tuition charges for 2012/13 will be determined by individual universities. Details will be available here.

Repayment system

Graduates who have completed their studies and are among the country's higher earners will make a higher contribution towards the cost of their education. As their earnings increase, so will their contributions.

Graduates will not make a contribution towards tuition costs until they are earning at least £21,000, up from the current £15,000. The repayment will be on 9% of income above £21,000, and all outstanding repayments will be written off after 30 years. This means all graduates will pay less per month than they do under the current system.

In order to make the system financially sustainable, a real rate of interest will be charged on loan repayments, but with a progressive taper:

  • For graduates earning below £21,000, there will be no real rate of interest applied to their loan.
  • For graduates earning between £21,000 and around £41,000, a real rate of interest will start to be charged, reaching a maximum of RPI plus 3%.
  • Above £41,000, graduates will repay at the full rate of RPI plus 3%.

For more information visit:

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