Theresa May announces 'sweeping review' of student finance scheme in England

Theresa May has concerns about a system that leaves the poorest students in England with the highest debt.
Theresa May has concerns about a system that leaves the poorest students in England with the highest debt.

Theresa May will announce a sweeping review of post-18 education as she admits to serious concerns about a system that leaves the poorest students in England with the highest debt.

The Prime Minister will acknowledge the current system of university tuition fees of up to £9,250 a year had not resulted in the "competitive" market that had been expected and instead "we now have one of the most expensive systems" in the world.

The Government-led review, supported by an independent chair and panel, will look at all aspects of student funding, including the maintenance support available to help with the cost of living.

In a speech she will say the goal of making university accessible to teenagers from all backgrounds "is not made easier by a funding system which leaves students from the lowest-income households bearing the highest levels of debt, with many graduates left questioning the return they get for their investment".

The review comes amid widespread concern about the debt burden on students and the high interest rates, currently 6.1%, on loans.

Mrs May will acknowledge the concerns of students, parents and grandparents about the levels of debt faced by graduates.

"The competitive market between universities which the system of variable tuition fees envisaged has simply not emerged," she will say.

"All but a handful of universities charge the maximum possible fees for undergraduate courses.

"Three year courses remain the norm. And the level of fees charged do not relate to the cost or quality of the course.

"We now have one of the most expensive systems of university tuition in the world."

Former education secretary Justine Greening has urged the Government to reintroduce maintenance grants for poorer students.

Mrs May said the review will "examine how we can give people from disadvantaged backgrounds an equal chance to succeed" which includes "how disadvantaged students and learners receive maintenance support, both from Government and universities and colleges".

The issue of university finance has become a key political battleground with the Tories struggling to win over young voters from a Labour party which has promised to scrap fees.

The Prime Minister will also use the speech in Derbyshire to encourage a shift in the "outdated attitude" that prizes academic qualifications over technical skills.

She will say her vision is for "equality of access to an academic university education which is not dependent on your background", but "a much greater focus on the technical alternatives too".

Mrs May will say she wants "a country where your background does not define your future and class distinctions are a thing of the past".

Ideas being considered include giving better careers guidance about future earnings potential and the kinds of qualifications that will be needed.

The review, expected to conclude in 2019, will also consider how to support life-long learning to help people retrain.

Professor Dame Janet Beer, President of Universities UK and Vice-Chancellor of the University of Liverpool, said: "Future success depends on universities having stable and sustainable funding - which the current system provides. This review is the opportunity to examine the evidence and to make improvements.

"Crucially, the current system could be better understood and feel fairer to students.

"Injecting new investment to help the poorest students with their living costs and tackling the decline in mature and part-time study must be priorities.

"The perception may be of academic versus technical qualifications, but the reality is very different. Universities are key to developing the skills needed by employers and students across a wide range of industries, sectors and professions."

Shadow education secretary Angela Rayner said: "We don't need a review of a broken system; we need an entire restructure of the education sector. It's time the Tories stopped tinkering around the edges of an unsustainable funding model and instead support students now.

"The truth is the Tories can't compete with Labour's education policy, which includes scrapping fees entirely and bringing back maintenance grants and the EMA."