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Top-up fees
- What are top-up fees?
- Before September 2006, students paid a flat-rate tuition fee (of £1,175 in the year 2005/06). Since September 2006, we have faced variable fees, popularly known as “top-up” fees, because they make up for the shortfall in funding the actual cost of certain degrees. This meant that universities can charge students anything from £0 up to a maximum of £3,225 per year (as you’d expect, most universities choose to charge students the full amount). The maximum amount that students have to pay is called the ‘cap’ and is set by the government (it changes every year due to inflation).
At the moment most Warwick students prefer to pay the fees through the Student Loans Company (which is government owned). Means tested Maintenance Loans are also available; this loan is intended to go towards living costs.
- Do you have to pay the money straight after you graduate?
- No. Loans and tuition fees have to be paid after you start to earn above £15,000. The repayment is based on (a minimum of) 9% of your monthly earnings over this benchmark. So if you were earning the average graduate starting salary of £18,000 a year, you’d pay back £5.19 a week.
The interest paid on these loans is directly tied to inflation so there is a zero ‘real’ rate of interest. Be wary about what this means though because, since inflation is increasing, you are paying more than you actually borrowed. However, they are low-interest compared with bank loans and if you ever start to earn below the £15,000 mark again you stop paying them back.
- What does this mean for universities?
- Most universities saw an initial decrease in the number of applications but recent statistics point to an increase in applications despite the rising costs of education.
- How does this affect students?
- The average student, spending 3 years at Warwick, having both a tuition fee and maintenance loan, will graduate with more than £20,000 of debt. This comes at a point where parents are less likely to support their child through higher education and therefore poorer students are seen as being ‘priced out’ of higher education.
- How are things changing now?
- There has been talk on the horizon about changing the way that fees work — be that lifting the cap, or changing the structure of fee-paying entirely.
In November of 2009, after calls from student representatives all over the country, Lord Mandelson launced a review into student fees. They are working through the review at the moment. NUS are campaigning to get their "graduate contribution" model (called a "graduate tax" by many) taken on.
- What is the SU doing?
- The SU believes that students have enough to worry about without money trouble. National bodies such as the NUS are continuing with their campaign to stop a rise in the "cap" on fees, which other high-ups (such as Warwick's Chancellor, Richard Lambert, who is also Director-General of the CBI) are suggesting we should do.
The argument in lifting the cap is that it will create an even more differentiated system, allegedly improving potential students' "choices" based on service standards. However, a market in higher education has the very real danger of creating the equivalent to the American-style Ivy League, which could be disastrous for here. See our policy on fees.