Student Finance Update

Monday 19th November 2018 Written Statements

[The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)]

The Higher Education and Research Act 2017 received Royal Assent on 27 April 2017. It set out significant reforms to help ensure that students receive value for money from their investment in higher education. The Act included a power for the Government to set specific annual fee amounts for accelerated degree courses in regulations.

An accelerated degree is the equivalent of a standard degree in every sense but one: it is completed one year sooner than its standard equivalent. By studying for more weeks each year and taking shorter breaks between terms, accelerated students can, for example, complete the full content of a three-year degree—but graduate in two years.

In spite of the many benefits, there are currently very few accelerated degree courses available, as the current fee limit creates a financial disincentive for higher education providers.

Accelerated degrees cost more to deliver each year than their standard equivalents because of the higher number of weeks taught each year. Providers, however, can only charge up to the maximum annual fee cap for each year of teaching, regardless of the comparative volume of teaching delivered each year.

During the passage of the 2017 Act, the Government agreed to consult on values for specific accelerated degree fee caps, with the aim of removing the financial barrier and incentivising wider provision. Our consultation proposed a 20% uplift in the annual tuition fee for accelerated degrees.

For example, the annual tuition fee for a two-year accelerated course at a TEF-rated, fee-capped university (that is, a university with an approved access and participation plan and high-level quality rating) would be capped at £11,100 per year, compared with £9,250 per year for the same course taught over three years.

The total fee cost would be £22,200 for the accelerated degree, compared with £27,750 for the standard equivalent—for students, a 20% saving in tuition costs. The £22,200 total revenue for universities offers providers £3,700 more per accelerated degree (80% of the three-year fee), compared with the current £18,500 maximum (67% of the three-year fee) that they can currently charge for the same two-year course.

Today the Government are publishing their response to the accelerated degrees consultation, setting out our intention to proceed with regulations to set the new accelerated degree fee caps as soon as possible, subject to parliamentary approval. The full text of the response can be found on www.gov.uk.

These proposals apply to England only. We will also review the impact of the introduction of accelerated degrees fee caps three years after implementation. Our intention is to also bring forward regulations providing for increased loan amounts for accelerated degree courses.

This announcement will give providers confidence that the arrangements for accelerated courses are here to stay, and are consistent with all types of current non-accelerated fee levels and caps. The higher annual fee cap for accelerated degrees will drive up provision of accelerated courses across a far greater range of providers. Wider provision will in turn offer many more students the choice of applying for an accelerated course with their preferred subject and provider.

The new accelerated degree fee cap is consistent with the Government’s overall ambitions for diverse and flexible post-18 education, currently being developed through the ongoing review of post-18 education and funding.

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