Estimating the costs associated with the student support offer – December 2018

Practice area: Economics of Education | Education and Labour Markets | Higher education | Labour market economics | Labour markets
Client: N/A
Published: 10 December, 2018
Keywords: modelling quantitative analysis

Following publication in the Telegraph of some possibilities emerging from the Augar review, London Economics have estimated the economic cost associated with reducing annual tuition fees to £6,500 (with no additional Teaching grant); removing real interest rates; and reducing the repayment threshold to £21,000. The result is a £2.8 billion reduction in funding (per cohort) for higher education institutions; a £1.8 bn saving for the Exchequer; and a £1.0 billion reduction in costs for students/graduates. However, it is the higher earning graduates that benefit to the greatest extent – with male graduates benefitting in particular – and female graduates having worse outcomes than currently the case.