The richest students at England’s universities are escaping the high cost of education by paying their fees up front, researchers say
Around 10 per cent of students avoid racking up £6000 of interest – unlike their classmates who pay interest rates of 6.3 per cent. This charge is more than four times the government’s borrowing rate of 1.5 per cent.
The study done by think tank Intergenerational Foundation discovered that the proportion of self-funding students is highest at Russell Group universities, with 20 per cent at King’s College London and 16 per cent at Cambridge and Oxford.
University College London, Imperial and London School of Economics had self-funding rates of around 14 per cent. A little over 25 per cent of students at these elite institutions are from private school backgrounds, compared to the 10.7 per cent of students at other universities, suggesting their families continue to pay for schooling well into university.
“This report is more evidence that the current system is not fit for purpose,” Shakira Martin, president of the National Union of Students, said.
“While wealthy students can avoid accruing debt and the high interest which comes with student loans, too many students from low income families grapple with a cost of living crisis and unaffordable housing. Wealthy students can focus on their studies, while too many poorer students work long hours to make ends meet.”
Gordon Marsden MP, Shadow Minister for Higher Education, commented on the report, blaming the current government for the gap in educational costs.
“The Tories’ system of imposing eye-watering tuition fees and huge interest payments is unfair and unsustainable,” Mardsen said.
“The fact that the wealthiest students can avoid the thousands of pounds of interest paid by their less fortunate peers exposes a fundamental injustice at the heart of the system.”
IF notes in their report that the wealthier students have a clear “economic advantage” over their peers, as they won’t “have 9 per cent of income over £25,000 a year for the next 30 years deducted from their pay packets”.
Angus Hanton, IF Co-founder, said, “This analysis makes a mockery of claims that the current system is progressive since the wealthiest kids are not even in the system.”
