• Tuition fees to rise in line with inflation, helping put universities on a secure footing.   
• Inflation-linked lift to maintenance loans, increasing by up to £414 a year, boosting support for students from low-income families.   
• Universities asked to improve value for money for students and break down barriers to opportunity for those from disadvantaged groups, with reforms set to be published next year  
• Maximum fees rising by 3.1 per cent to £9,535. These changes will take effect at the start of the 2025/26 academic year, with
• Lifelong Learning Entitlement (LLE) to launch in 2026/27

The government has today (Monday 4 November) unveiled a significant package of measures to support students and stabilise the university sector.  

Students facing cost of living pressures will be supported with an inflation-linked increase to maintenance loans, alongside new steps to boost access for disadvantaged learners.    

The increase in cash-in-hand support of 3.1 per cent will provide as much as £414 extra per year, to help students from the lowest income families.   

Higher education providers’ financial sustainability will also be bolstered, after seven years of no increases to domestic tuition fee caps – meaning fees have not kept pace with inflation.   

University Tuition Fees will be £9,535 from 2025/26 in England

These changes will take effect at the start of the 2025/26 academic year, with maximum fees rising by 3.1 per cent to £9,535. After leaving study, student loan borrowers will not see their monthly student loan repayments increase as a result of these changes.   

If a borrower’s income is below the repayment threshold, they aren’t required to make any repayments. And after 40 years any outstanding loan debt, including interest accrued, will be written off.   

Education Secretary Bridget Phillipson said:   

“This government’s mission is to break down barriers to opportunity, which is why we are doing more to support students struggling with the cost of living despite the fiscal challenges our country faces.   

“The situation we have inherited means this government must take the tough decisions needed to put universities on a firmer financial footing so they can deliver more opportunity for students and growth for our economy. 

“Universities must deliver better value for money for students and taxpayers: that is why this investment must come with a major package of reforms so they can drive growth around the country and serve the communities they are rooted in.”  

In exchange for this additional investment students are being asked to make, the government is calling on universities to significantly step up work to boost access for disadvantaged students and break down barriers to opportunity.   

Providers will be expected to play a stronger role in expanding access and improving outcomes for disadvantaged students, and the Department for Education will announce a package of reforms in the coming months.  

Recent data shows that the gap between disadvantaged students and their peers in progression to university by age 19 is the highest on record, and the Education Secretary has called on universities to do more to address this.    

Graduates earn an average of £100,000 more over their lifetime than non-graduates, underlining the continued value of a university degree to employers and learners alike. But these statistics have shown that that too often background and personal circumstances are barriers to people getting on in life.   

The increase in fees will mean providers can start to address systemic problems, with 40% forecasted to be in budget deficits, and help ease pressure on their finances. It also means providers can continue to deliver high quality education that boosts the life chances of those who choose this path, as well as protecting their status as engines of economic growth.   

The move follows the Education Secretary’s immediate action this summer to refocus the Office for Students’ role, and ensure it more closely monitors financial sustainability to safeguard the future of higher education.    

Tuition fees for classroom-based foundation years courses will be reduced to £5,760 from the start of the 2025/26

The Education Secretary has also announced today that maximum tuition fees for classroom-based foundation years courses will be reduced to £5,760 from the start of the 2025/26 academic year. This will ensure that courses are delivered more efficiently and at lower costs to students.

Lifelong Learning Entitlement (LLE) to launch in 2026/27

The announcement follows last week’s update to plans for the Lifelong Learning Entitlement (LLE), a transformation of the student finance system which will expand access to high-quality, flexible education and training for adults throughout their working lives.  

After careful consideration the LLE will now launch in academic year 2026/27, to ensure it meets the government’s ambitions to fill skill gaps and kickstart economic growth.   

This will enable plans to be refined, help collaboration with Skills England to support the government’s industrial strategy, and give education providers the necessary time to prepare for this new system.  

Key Questions & Answers

Q: How much will university tuition fees increase?
A: Tuition fees will rise by 3.1% to £9,535 starting from the 2025/26 academic year.

Q: How will this affect student loan repayments?
A: Monthly student loan repayments will not increase as a result of these changes. Borrowers below the repayment threshold won’t need to make any repayments, and any outstanding loan debt will be written off after 40 years.

Q: What support is being offered to students facing cost of living pressures?
A: Maintenance loans will increase by 3.1%, providing up to £414 extra per year for students from the lowest income families.

Q: What changes are being made to foundation year courses?
A: Maximum tuition fees for classroom-based foundation years courses will be reduced to £5,760 from the start of the 2025/26 academic year.

Q: When will the Lifelong Learning Entitlement (LLE) launch?
A: The LLE will launch in academic year 2026/27.

Q: Why are these changes being implemented?
A: The changes aim to:

• Put universities on a more secure financial footing (40% are forecasted to be in budget deficits)
• Support students with cost of living pressures
• Improve access for disadvantaged students
• Ensure better value for money for students and taxpayers

Q: What is expected from universities in return for this investment?
A: Universities are expected to:

• Significantly improve access for disadvantaged students
• Break down barriers to opportunity
• Deliver better value for money for students and taxpayers
• Play a stronger role in improving outcomes for disadvantaged students

Sector reaction

Commenting on the government’s announcement about increasing university tuition fees, UUK Chief Executive, Vivienne Stern MBE said:

“Today’s decision cannot have been easy for government, but it is the right thing to do. Thriving universities are essential to a thriving UK, delivering stronger growth, better public services and improving individual life chances.  University leaders and government must work together to ensure that our universities are able to fire on all cylinders. 

“A decade long freeze in England has seen inflation erode the real value of student fees and maintenance loans by around a third, which is completely unsustainable for both students and universities. Keeping pace with inflation stops the value of fees going down year after year. Importantly, this change will not see students paying more to study upfront; repayments are linked to earnings above a £25,000 threshold. The increase in maintenance loans is also very welcome and important. Maintenance loans in England are currently at their lowest level for nine years, so this increase was also urgently required to allow students to access the financial support they need while studying, especially given cost of living pressures.  

“As set out in our recent Blueprint, universities also have to work to be as efficient and effective as possible, to serve the needs of the country. Some transformation can only be achieved through collaboration at a national level. We commit to working with university leaders and government to unlock this through our Efficiency and Transformation Taskforce.”  

Maintenance Loans

NUS has celebrated the increase in maintenance loans, which has come as the result of years of campaigning by student activists.

This follows an earlier survey by NUS that found that student foodbank use has doubled since 2022, with 14% of students have used foodbanks. Additionally, it found that 55% of students have cut back on food because they could not afford to eat, and 13% of students have experienced homelessness. 

However, the union have also pointed out that, as the maintenance loans are means-tested – without the introduction of grants this will contribute to an even higher burden of debt for the poorest students.

Commenting, NUS Vice President Higher Education, Alex Stanley, said:

“Higher education is in crisis right now. Students are being asked to foot the bill to literally keep the lights and heating on in their uni buildings and prevent their courses from closing down. This is – and can only ever be – a sticking plaster. Universities cannot continue to be funded by an ever-increasing burden of debt on students.

“We do welcome the increase in maintenance loans. This money will make a real difference to the poorest students, and is a testament to the hard work of student campaigners over the past three years: right now, students are left with 50p per week to live on after rent and bills.

“We do now need an urgent review and reform of the way that higher education and our students are funded.

“Clearly, the current system is not working.The last fourteen years of intense marketisation have systematically run down the UK’s universities. Students need a review that considers maintenance grants, international student fees and tackling the funding crisis that students and universities have been pushed into.”

Commenting, NUS Vice President Liberation & Equality Saranya Thambirajah said:

“Discrimination is baked into the student loan system at every level: it’s perfectly regressive – and a review of how education and students are funded is crucial to tackle this.

“Firstly, we know that working class students are likely to be the most debt averse: and so an increase to the amount of debt someone accumulates over their student lifetime, while giving more money with one hand, could also serve to put people off even entering higher education in the first place.

“It doesn’t stop on graduation: right now, middle-earning women graduates face higher repayment amounts than higher-earning men, who effectively “tap out” of the system early and do not accumulate as much debt. We then see this multiplied by the gender and race pay gaps. It is fundamentally absurd that those who earn less are ultimately paying more to keep our higher education system afloat. 

“If the government is serious about higher education reform, it needs to work out the tensions at the heart of the funding system. This must include a full package of maintenance funding, if we want to avoid a serious student poverty crisis which is already in the making, and a sharpened stratification of HE by class. From tuition fee rates to the repayment system, we need root and branch reform to fix what the 14 years of Tory governments broke beyond recognition and create a higher education system that works for students, universities and colleges.”

Carl Cullinane, Director of Research and Policy at the Sutton Trust, said:

“Today’s announcements barely scratch the surface of what’s needed to reform student finance and widen opportunity. While students will welcome any additional money in their pockets, a 3% increase in the maintenance loan will scarcely begin to restore levels which have fallen more than 11% in real terms since 2021. On top of this, raising tuition fees without also reintroducing maintenance grants will hurt students from the poorest households the most. Since the abolition of maintenance grants in England, students from lower income backgrounds have been leaving university with the highest levels of debt. Many are struggling with the rising cost of living, with over a quarter of students skipping meals to save on food costs.

“If the government is serious about breaking down barriers to opportunity, it should be taking steps to ensure students from the poorest backgrounds can meet their basic needs without graduating with excessive debt. Our modelling shows that reintroducing grants can be achieved with little or no additional cost to the public purse, through reform of the repayments system to make it more equitable.”

Rising tuition fees offer short-term relief, but UK universities face long-term funding crisis, says NCUB

NCUB welcomes the Government’s increase in the undergraduate tuition fee cap, announced today. It is an important step toward addressing the university funding challenges, that are seriously threatening the sustainability and impact of UK universities.

Responding to the inflationary increase in the undergraduate tuition fee cap for English higher education providers, Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business (NCUB), said: “Universities are critical to the UK’s economic growth ambitions. The strength of our universities is a real UK advantage that is seriously threatened by the urgent funding sustainability challenge they are facing. We warmly welcome the inflationary increase in the undergraduate tuition fee cap for English higher education providers, announced today. The announcement details a fee rise from £9,250 to £9,535 from April 2025. This will go some way in helping to meet this challenge.”

Marshall continued: “However, we know that to effectively plug the financial hole our nation’s universities are facing, more action is needed. Universities are the foundation of the UK’s research and development system, performing and producing research, creating skills for the future, and facilitating knowledge exchange between academia, industry, and civil society. We are already very concerned about the prospect of increased employer National Insurance contributions announced in the Budget last week, which will significantly raise staffing costs for universities, by £372 million a year. Without proper funding, the whole system is facing crisis.”

Marshall concluded: “While this increase may provide some immediate financial support, it’s critical that we don’t overlook the impact on students, especially those from lower socio-economic background, who are hugely impacted by cost-of-living pressures. These pressures could discourage students from pursuing higher education, which would limit the number of graduates with advanced qualifications – a risk to the future skills pipeline and to university income in the long term. To offset this risk, we welcome the Government’s introduction of more generous maintenance loans to ensure that higher education remains accessible to all.”

IFS: £390 million relief for English universities as government ends tuition fee freeze

Responding to the announcement on tuition fees and maintenance loans in parliament this afternoon, Senior Research Economist from IFS Kate Ogden said:

“University Vice Chancellors will be breathing a sigh of relief that the government is not extending the tuition fee freeze, sparing universities a further real-terms cut to resources of around £390 million next academic year. Of course, higher fees today mean higher student loan repayments in the long run – with graduates eventually repaying around three-quarters of the extra borrowing resulting from today’s announcement.

Living cost support for students will also be protected in real terms. But crucially, the government has decided not to reverse the substantial real-terms cuts in the generosity of support seen in recent years. Even after the uplift, the poorest students will be entitled to borrow around 9% less next academic year than an equivalent student 5 years earlier.”

 Robbie Cruikshanks,Senior Researcher, Higher Education at the Education Policy Institute said:  

“The government’s decision to raise tuition fees in line with inflation may offer some much-needed reassurance to the higher education sector, with research showing that the freeze in fees was the main factor behind the sector’s recent declining financial health.  

The uplift to maintenance loans is also a positive step. However, the government must go further to ensure the student maintenance support and loan repayment schemes work to increase access for disadvantaged students, especially given these students are now becoming even less likely to participate in higher education than their better-off peers. The government must ensure greater equity in student loan repayments, as under the current repayment system, lower- to middle-earning graduates are likely to bear a greater share of their lifetime income toward repaying these loans than their higher-earning peers. Furthermore, the government should consider the reintroduction of maintenance grants to further bolster the package of student support. 

These changes should be part of a broader, long-term reform to the higher education system that works toward a fair settlement for all students, regardless of their future earnings, while also fostering high-quality, well-supported alternatives to traditional degrees, including level 4 and 5 provision.”   

Short-term support for universities must be followed by long-term strategy

Responding to today’s announcement of an increase in the annual tuition fee cap in England to £9,535 from April, along with a 3.1% increase in maintenance loans, Mark Hilton, Policy Delivery Director at BusinessLDN, said:

‘‘Today’s announcements mark welcome short-term measures to support our world class university sector, while at the same time helping students with an increase in maintenance loans. Universities have been facing huge and growing cost pressures in recent years, with a seven-year freeze to tuition fees, tighter restrictions on international student visas, and now a hike in employer national insurance contributions.

“The Government should follow-up today’s interventions with delivery of a long-term plan for UK higher education so it can continue to be a world leader in teaching and research.

“Crucial to such a strategy will be launching a full financial review of the sector, ensuring recent positive rhetoric around international students matches policy, and making good on today’s commitment to bring employers and universities together to deliver the skills our economy needs.”