Britain wants degree fees to reflect choice of subject

By David Milliken and Paul Sandle

LONDON (Reuters) – Students at British universities could be charged variable tuition rates that reflect the economic value of their degrees, Minister for Education Damian Hinds said on Sunday, before the launch of a review of higher education funding.

University tuition fees in England are high compared with elsewhere in Europe at around 9,000 pounds ($12,640) a year, and the opposition Labour Party gained support from students in last year’s election with a pledge to abolish fees in the future.

Hinds defended tuition fees in principle on Sunday, saying they divided the cost of university education between the taxpayer and the student, but he wanted to see more variety in the way higher education is funded.

“What we need to look at is the different aspects of pricing, so the cost to put on the course, the value it is to the student and also the value to our society as a whole and to our economy for the future,” he told BBC’s Andrew Marr show.

The Sunday Times said the government expected to see cuts in the fees for social science and arts courses which are cheaper for universities to provide.

Hinds told the newspaper that almost all institutions were charging the same maximum amount for almost all courses and indicated he wanted to see more choice on price.

“Some have higher returns to the student than others,” he said.

“It’s right that we now ask questions about how the system operates. I would like to see options available which have different costs.”

He said the review, due to be launched on Monday, would also look at the interest rate charged on student loans, used to fund tuition fees and living costs for students.

Earlier on Sunday, a parliamentary committee said the government should cut the interest rate it charges on loans to English students, and statisticians should review why the cost of hefty write-offs barely figures in official borrowing data.

Student loans taken out since 2012 charge a variable interest rate that is 3 percentage points higher than the prevailing rate of retail price inflation, taking the current interest rate to 6.1 percent.

The British parliament’s Treasury Committee said the use of RPI as a benchmark was unfair, and the 3 percentage point premium introduced in 2012, was hard to justify.

“The government must reconsider the use of high interest rates on student loans,” Nicky Morgan, the Conservative chair of the cross-party committee, said.

($1 = 0.7120 pounds)

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