Higher Education Funding

Georgia Gould Excerpts

Wednesday 28th October 2026 Westminster Hall

[The Minister for School Standards (Georgia Gould)]

It is an honour to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing this really important debate. She is a passionate advocate for these issues: she has chaired the APPG on students and has regularly raised issues related to universities and students, and from her speech we heard how thoughtful and knowledgeable she is on these issues.

I also thank my hon. Friend the Member for Colchester (Pam Cox) for her characteristically thoughtful speech. She called for a wider debate, discussion and focus on these issues, and we have had a very important debate today. We have heard the range of expertise in the Chamber, from lecturers to others who have real experience of working in universities, and about the range of decades when everyone went to university—I cannot believe that anyone here looks old enough to have gone to university under Margaret Thatcher.

We should rightly be proud of our world-class higher education sector, which remains, by any objective metric, one of our nation’s greatest exports and a global beacon of intellectual excellence. We heard from my hon. Friend the Member for Ealing Central and Acton (Dr Huq) that the UK’s university sector includes four of the world’s top 10 universities, of which we can be very proud. It contributes more than £265 billion to the UK and supports more than 750,000 jobs. In my work as Schools Minister, I get to see directly the contribution that universities make to places and how integrated they are in local innovation, support and access.

I have spent quite a bit of time in Sheffield and have seen the contribution that the University of Sheffield and Sheffield Hallam University make to the local area, whether through their pioneering work on opening up participation to university or some of their wider research: Sheffield Innovation Spine, the work that Sheffield Hallam University is doing on early years and Sheffield Children’s University, and the work that the University of Sheffield is doing on adult social care.

As my hon. Friend the Member for Sunderland Central (Lewis Atkinson) was talking, I was reflecting on being in Sunderland two weeks ago, where we are working on Mission North East, and the role that Sunderland University is playing in partnership to support better outcomes for children in the area.

The Government are committed to maintaining a world-class higher education sector that delivers for students, our society and the economy. We of course recognise that the sector’s financial environment is challenging. The sector is rightly independent from Government, with providers managing their finances and ensuring that their business models provide long-term sustainability. However, I recognise the long-term challenges that many Members have raised and the strain that we saw over the last decade, including the legacy of seven years of frozen tuition fees. Universities have had to deal with the issues caused by that.

[Dr Huq]

I know the Minister is really passionate about this subject, and her Department has done excellent work with the Department for Work and Pensions on the phenomenon of those not in education, employment or training. A statistic shared by my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) was that the UK has the lowest proportion of public tertiary education expenditure among OECD countries. Could the Minister have a word with Treasury colleagues about nudging that upwards, because that is a statistic we are not so proud of?

[Georgia Gould]

Of course, I always support greater funding for education and young people, but I was just about to talk about some of the changes the Government are making to support sustainability.

After they were frozen for eight years, we increased tuition fee caps in line with inflation for 2025-26. We will increase them once again in line with forecast inflation in 2026-27 and in 2027-28. We will then legislate when parliamentary time allows to increase tuition fee caps automatically for future academic years. Over the coming year, that is £6 billion-worth of safeguarded indexed increase in income underpinned by the Government, which will make a real difference.

My hon. Friend the Member for Sheffield Central asked about the Government’s vision for universities. We have set out an ambitious programme of reform through the post-16 education and skills White Paper, with a clear vision for a more sustainable and collaborative higher education sector. We want providers to be clear about their distinctive roles but to be working in collaboration.

My hon. Friend also mentioned the importance of research. My hon. Friend the Member for Bury St Edmunds and Stowmarket (Dr Prinsley) talked about the pioneering research on prostate cancer at East Anglia. Research is a critical role that universities play. The Government are investing a record £86 billion in R&D from 2026-27 to 2029-30; as part of that, UK Research and Innovation will deliver an expected £38.6 billion of research investment, rising to nearly £10 billion per year by the end of that period. In the Department for Education, we are working closely with the Department for Science, Innovation and Technology to deliver the White Paper’s commitments, which include research funding reform and improvements to research grant cost recovery.

We heard from almost all the Members who spoke in the debate about the importance of opening up access and ensuring that young people who want to go to university can always pursue that route. That is why we do not support the Conservatives’ proposals, which would pull up the drawbridge because they are about reducing the number of young people going to university. We know that young people from disadvantaged backgrounds will be the ones who do not get that opportunity.

[Jayne Kirkham]

It is important to note that in the 1980s, only about 10% of people went to university. The Blair Government opened that up to 50% of the population, and that is worth putting on the record.

[Georgia Gould]

We want two thirds of young people to participate in higher-level learning, whether that is going to university, pursuing an apprenticeship or a technical route. We see all of those as deeply connected.

[Jim Shannon]

I thank the Minister for her helpful response. She has outlined a very clear strategy to try to address the issues that we have all raised. I ask her a specific question: would she consider sharing the strategy with the relevant Minister back home?

--- Later in debate ---

[Georgia Gould]

I regularly talk to colleagues across the four nations, and my right hon. Friend the Minister for Universities, Baroness Smith, does the same. It is very important that we have that spirit of learning.

Those different routes are deeply connected. We think that the relationship between higher education and the Department is important, particularly on supporting outcomes for young people and as we think about how we respond to the changing nature of education, the introduction of the lifelong learning entitlement and long-term flexible learning. We want people to have access to education throughout their lives.

[Rebecca Smith]

Will the Minister give way?

[Georgia Gould]

No, I must make progress. The lifelong learning entitlement will transform the student finance system, giving people flexible access to high-quality education throughout their working lives. From January 2027, for the first time learners will be able to use their entitlement to fund individual modules as well as full courses at levels 4 to 6 at colleges, universities and independent providers.

A number of Members, including my hon. Friends the Members for Sheffield Central and for Edinburgh South West (Dr Arthur), raised the issue of international students and support for them. I want to be clear: international students are welcome in the UK. They enrich our campuses and communities, and are ambassadors for this country long after they graduate. They made a vital contribution of £12.7 billion in fee income in 2023-24—almost a quarter of the sector’s income, as other Members said. The new international education strategy confirms our commitment to welcoming students who meet the requirements to study here.

A range of questions were asked about the international student levy. That is part of a wider package that also includes inflation-linked fee rises, and it is important to stress that every penny it raises will be reinvested in higher education and skills—including new maintenance grants for disadvantaged students, which many hon. Members raised, to remove some of the barriers around the cost of studying. We know how important those are. The levy is simple and proportionate: a flat £925 fee per international student per year from 2028-29, paid for by providers with an allowance of 220 students each. We listened to the sector; the flat fee is equivalent to around 4% of international fee income, down from the 6% first provided. To answer the questions asked by my hon. Friend the Member for Southampton Itchen (Darren Paffey) and others, we will publish an updated impact assessment ahead of the Finance Bill.

I was asked a number of questions about the pressure that many students are facing, including from my friends from Cornwall, the hon. Member for Camborne and Redruth (Perran Moon) and my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham). We know that cost of living pressures have hit students hard. The previous Government removed maintenance grants and the real-term value of loan support for students fell by almost 20% between 2020 and 2024. We are taking action to put that right.

We are introducing a targeted maintenance grant from 2028-29 of up to £1,000 a year for disadvantaged students on top of their loan, putting cash in their pockets without adding to their debt. The new grants will support students from low-income households studying full-time courses, which is in line with the Government’s mission and industrial strategy. We are future-proofing maintenance loans by increasing them in line with forecast inflation every year, with the biggest cash increase going to students from the lowest-income families.

My hon. Friend the Member for Southampton Itchen raised the issue of student loans, and I want to address that in the time that remains to me. As we have heard from across the Chamber today, giving those who want it and have the ability the chance to study in higher education changes lives. We are determined to support students who want to go to university to fulfil their aspirations. We cannot lose sight of the value that student loans provide in enabling that and levelling the playing field at the point of access. They remove that upfront financial barrier to studying and enable students to repay when they are earning. We inherited a student loan system that is not working as fairly as it should, and we recognise that some students and graduates feel the impact of that.

We are making the tough but necessary decisions to deliver a fairer and more sustainable system. We increased the plan 2 thresholds in 2025—its first increase since 2021—and we again raised the plan 2 repayment threshold in April, to £29,385. We have also capped interest rates for plan 2 and plan 3 loans at 6% for the academic year 2026-27. There are a whole range of very important discussions that came up today. I know that myself—

Motion lapsed (Standing Order No. 10(6)).