Student fees to rise in England in 2025
The long freeze on student tuition fees in England has come to an end.
The long freeze on student tuition fees in England has come to an end.
Do you know what the RPIX is? You might guess it’s related to inflation given that RPI is the Retail Prices Index. But what does the X mark? X stands for RPI excluding mortgage interest. RPIX was used as the Bank of England’s inflation target until the end of 2003 when it was replaced by the more familiar Consumer Prices Index (CPI).
However, the Office for National Statistics now says the RPI and its derivatives “do not meet the required standards for designation as National Statistics”.
Given such a pedigree, it might seem surprising that an estimate of RPIX for the first quarter of 2025 was used to determine a 3.1% increase in tuition fees for the 2025/26 academic year in England. This will raise the maximum (and near-universal fee) from £9,250 to £ 9,535. It will be the first increase in fees since 2017; it is uncertain whether the 2025 rise marks the return of annual increases.
The Department for Education’s (DfE) press release announcing the increase said, “After leaving study, student loan borrowers will not see their monthly student loan repayments increase as a result of these changes.” While that statement is factually correct, it is somewhat disingenuous. New student loans are repayable at the rate of 9% of annual income over £25,000. So while a higher tuition fee does not mean higher payments, it does mean that payments will continue for a longer period, as the debt (plus interest at RPI) is larger. Following a change introduced from 2023, the maximum loan repayment term is now 40 years, after which any outstanding amount is written off.
As well as increasing tuition fees, the DfE also raised the amount of maintenance loans – about half of which are parental means-tested – by 3.1%. This comes after a history of sub-inflation increases which means that the new loans will be up to 10% below those of 2020/21, adjusted for inflation.
If you have children or grandchildren heading to university, then planning for the financial support they will need – RPIX adjusted or otherwise – has never been more important.
Note: Scotland, Wales and Northern Ireland have their own student finance systems, but do not be surprised if that new tuition fee limit of £9,535 turns up somewhere in their versions.
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