Deferred fees for universities:a UK proposal

The issue of university fees and financial support for students is both complex and divisive. The need for some original but well-thought-through ideas has never been greater. The UK is also re-assessing its system of student financing. A recent proposal by Neil Shephard (Oxford University) is worth looking at. Its recommendations are below:

1. Make student financial support available to cover all tuition and a modest cost of living.
2. Allow graduates to repay according to earnings with protection for poorer graduates.
3. Call HEFCE teaching grants “scholarships” and make students aware of their value.
4. Cap the level of funded fees plus HEFCE grant at the current level.
5. Allow universities to charge deferred fees.

• When they are paid the money goes to the student’s university not to the state. These
• fees have no fiscal implications.
• Bring some of the cash flow from deferred fees forward by working with a bank.

6. In the long-run move to making the cost of living support simpler by

• Providing more realistic cost of living support for all students.
• Removing means-tested university bursaries for cost of living expenses.
• Removing means-tested grants to students provided by the state.