Higher education fees and funding: Assessing potential alternatives to the Department for Education’s response to the Augar Review

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Practice area: Education and Labour Markets
Client: University of the Arts London
Published: 13 December, 2022
Keywords: 2022 economics of education higher education Public Policy

London Economics were commissioned by the University of the Arts London (UAL) to analyse a number of options for reforming the English higher education funding system, as potential alternatives to the proposed changes that were announced by the Department for Education (DfE) in response to the Augar Review.

To improve the fiscal sustainability of the English HE funding system, the DfE’s long-awaited Augar response introduced a number of significant changes to the student loan repayment system to be applied to students starting HE qualifications from 2023-24 onwards. While these changes are expected to lead to significant savings for the Exchequer, the proposed changes will result in lower lifetime loan repayments for the highest earning graduates only, alongside higher repayments for most other graduates (i.e. low- and middle-income graduates). Therefore, we were asked by UAL to model the impact on the Exchequer and students/graduates of alternative approaches – including a stepped loan repayment system, and a graduate tax – that would achieve similar Exchequer cost savings (i.e. be fiscally neutral) while removing the regressive features of the DfE’s response to the Augar Review.

An Executive Summary of the analysis is available to download here, the full report is available here, the slides presented on the day are available here, and the livestream event on the day is available here.