How To Fund Higher Education Tuition In England: A Recommendation Report

Description of the three different funding options

Tuition fees were introduced in UK in the year of 1988. Labour government of the nation has initiated the step to introduce such and develop tuition fees as the way of funding the education of the undergraduate and postgraduate certificate students. This has become the great topic of discussion and raising so many issues in the education system (Marcucci and Johnstone, 2007). Earlier, the large amount of money that goes to the universities in terms of tuition fees comes from tax payers but these days most of the part of tuition fees that is given to the universities comes from the students. This in turn, makes the education so expensive in UK. This requires learning more about the various ways of funding.
Description of the three different funding options 

It is the type of tuition fee that has paid by every individual in the nation as the general tax. It has been analysed that Tuition fee was paid by general taxation in the in UK although 48% of the young people can get the higher education (Dearden, Fitzsimons and Wyness, 2011). Most of the funding universities has criticised this form of funding the tuition fees because it is increasing the tax for poor who are not even getting the benefits of the same.

This is the type of funding that suggests that the graduates have to pay the tax for their education. During the tie of 2015, the new system of tuition system have been introduced that suggests that the graduate would start paying the cost of their tuition fee when they start doing any job or start earning that can be in the form of income tax (Greenaway and Haynes, 2003). This was criticized because it was not possible to recover money from the international students who return to their home after education.

In this type of funding, the students take the loans for their education and pay the tuition fee. Sometimes, the loan that has been granted to the students is not enough to pay the whole tuition fee and thus students have to take alternative loans or pay the rest of the money by themselves (Wakeling and Jefferies, 2013).

Type of funding



By general taxation

The major advantage of this scheme is that general taxation results in equal distribution of the tuition fee for the students in the overall nation (Bradley and Migali, 2015).

It has been analysed that this also attracts more and more international students to come and study in UK as the tuition fee that needs to be paid by the students is comparatively very low because the part of it is paid by the general public as the tax.

It motivates every person to take education and move ahead as their parents are paying tax for the same.

As discussed, it has been analysed that this taxation system is not fair from the perspective of the poor people as only 48% of the total young people get the higher education and the percentage of poor people is very low in that

By graduate tax

The major advantage of implementing this policy is that graduate tax results in taking the tuition from the people who are taking the advantage of the same.

Another advantage of this scheme is that the students do not feel burdened at the time of their education and can pay the money back in the form of tax after they start earing

The biggest disadvantage of this type of funding for the tuition fee is that it is difficult to standardize that till how much time the student has to pay back the fee (Diamond, et al. 2015).

Another great disadvantage is that it is difficult to figure out that how much percentage should be kept for the students to pay as the tax (Diamond, et al. 2015).

The last disadvantage of this scheme is that it is difficult to take the money back from the student who come from oversees to study in UK. They go back to their home lands and it becomes tough to get back the money from them.

By student loans

The major advantage of using this as the approach of funding the tuition fee of the students is that the student can themselves pay the loan that they take for their education.

Facilities for alternative loans are also available for the students to pay the tuition fee (Middlehurst, 2016).

The students have the leverage to pay back the loans in any of the medium they want

Just after education, it is not possible for a fresher to pay the loans as well as to survive simultaneously. It becomes a financial burden for the students in the initial year of their learning.

Student loan recovery becomes a tough job for the banks from the students who may not get the efficient jobs after their education gets over.


It has been concluded from the overall discussion that tuition fees were introduced in UK in the year of 1988. This is the concept that has undergone many changes since year and become a great issue of political debate. The cost of education in UK is rising day by day; this is because of the instability of the funding of tuition fee for the undergraduate and postgraduate students in UK.

Tuition fees funded by general taxation

There are three forms of funding for the tuition fee in UK. The first one is the general taxation, the second one is the graduate tax and the third one is the student loan. It has been analysed that most beneficial and the recommended form of funding should be student loans. This is because it is the funding type that has the following advantages:

  1. The biggest benefit of student loans is that it aids those needful students to fund their education. It gives the opportunity to the intelligent student who can’t manage to fund their tuition fee. This funding results in providing higher education and good jobs to the students who deserves the same (Hughes, 2016). The student loans are designed in the way such that it needs not to be paid immediately but the students can pay the loans in instalments as per their convenience.
  2. The other advantage that is associated with student loan is that it includes very low rate of interest as compared to other loans. It has been analysed that the low rate of interest results in reduction of the financial burden on the students as well as their parents. This is because low interest rate leads to lower monthly instalments (Gallagher, et al. 2017).
  3. As far as the security is concerned, it has been analysed that there is no security for up to a certain amount on student loan and this act as the very big relaxation for the students. While, in case of other loans, the borrowers have to arrange a big amount of security in order to take the loans.

From the above advantages, it is justifiable that student loan is the best way of funding the tuition fee as it does affect the financial conditions of the other people who are not using the benefits of the same and the recovering of the loan is also much sorted (Lochner and Monge-Naranjo, 2016). It leads to a win-win situation for both the lenders that are the financial institutions and the loan borrowers.


Bradley, S. and Migali, G., 2015. The Effect of a Tuition Fee Reform on the Risk of Drop out from University in the UK.

Dearden, L., Fitzsimons, E. and Wyness, G., 2011. The impact of tuition fees and support on university participation in the UK(No. W11/17). IFS Working Papers.

Diamond, A., Evans, J., Sheen, J. and Birkin, G., 2015. UK review of information about higher education: information mapping study: report to the UK higher education funding bodies.

Gallagher, J.E., Calvert, A., Niven, V. and Cabot, L., 2017. Do high tuition fees make a difference? Characteristics of applicants to UK medical and dental schools before and after the introduction of high tuition fees in 2012. British dental journal, 222(3), p.181.

Greenaway, D. and Haynes, M., 2003. Funding higher education in the UK: The role of fees and loans. The Economic Journal, 113(485).

Hughes, S., 2016. Funding for adult and post-graduate learners 2016/17: a guide for constituents: this briefing provides information on funding sources for higher education and other types of post-16 education.

Lochner, L. and Monge-Naranjo, A., 2016. Student loans and repayment: Theory, evidence, and policy. In Handbook of the Economics of Education (Vol. 5, pp. 397-478). Elsevier.

Marcucci, P.N. and Johnstone, D.B., 2007. Tuition fee policies in a comparative perspective: Theoretical and political rationales. Journal of Higher Education Policy and Management, 29(1), pp.25-40.

Middlehurst, R., 2016. Privately funded higher education providers in the UK: The changing dynamic of the higher education sector. In A Global Perspective on Private Higher Education (pp. 81-95).

Wakeling, P. and Jefferies, K., 2013. The effect of tuition fees on student mobility: the UK and Ireland as a natural experiment. British Educational Research Journal, 39(3), pp.491-513.

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