Top-up fees

Top-up fees (not their official name) are a new way of charging tuition to undergraduate and PGCE students who study at universities in the United Kingdom from the 2006-2007 academic year onwards.

How the fees will work

Currently, most British students (except Scottish students studying in Scotland) pay a contribution towards their tuition fees (anything from £0-£1,250 a year). The amount they pay is based on their or their parents' income (called means-testing) in the tax year preceding each academic year. The fees are paid up front during each academic year. In addition, students are entitled to a means-tested student loan of up to around £4,000. The loan is separate from the tuition fees and is paid back by the student after they have graduated. It is repaid at the rate of 9% of gross income over £15,000 a year (different limits apply to unearned income and non-residents). The interest rate on loans is changed on 1 September each year and the annual rate is set to the Retail Prices Index increase the previous April (making the loans interest-free in real terms).

Related Topics:
Parent - Income - Means-testing - Tax year - Academic year - Student loan - Graduate - Interest - 1 September - Retail Prices Index

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The new top-up fees will operate as follows (figures are given for the academic year 2006-2007, and may rise by no more than the inflation rate until 2010):

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Universities will be able to charge students anything from £0 up to a maximum of £3,000 per year. In order to charge more than a basic £1,250 fee universities must satisfy a new Office for Fair Access (OFFA) that their admissions policies are equitable. Nearly all universities have chosen to charge the full £3,000. All Scottish universites will charge £1,700 per year (£2,700 for medical courses), but only to non-Scottish students (see below).

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Rather than pay the fees up front (as is the case now), they will be paid by the governement-owned Student Loans Company (SLC), the same body that currently provides student loans. The SLC will also continue to pay means-tested student loans directly to students. Students will repay their loans and tuition fees after graduation in the same income-dependent way as at present. Interest on the loans will still be tied to inflation, so they have a zero 'real' rate of interest.

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In addition to student loans, new means-tested grants will available to students from lower-to-mid-income families and universities will start to offer a range of bursaries for students. The Teacher Training Agency will partially pay the fees of PGCE students.

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Whether the new fees apply varies depending on where the student is from and where they go to university:

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• English and Northern Irish students will pay top-up fees wherever they study in the UK
• Welsh students will pay top-up fees in England, Scotland or Northern Ireland, but only the current £1,250 a year fee if they remain in Wales or study a course elsewhere that is not available at any Welsh university
• Scottish students will pay top-up fees in England, Wales or Northern Ireland; if they remain in Scotland, they will pay a £2,145 endowment upon graduation (as is the case now)
• EU students will pay fees as if they came from the nation they are studying in (in other words, always the lowest amount)
• International students will continue to pay their university's international fees, which are typically even higher than top-up fees

Many perceive the charging system to be unfair and possibly even racist. It has been suggested that the Welsh system in particular, where the National Assembly for Wales partially pays for only Welsh students' fees, could be ruled illegal http://news.bbc.co.uk/1/hi/wales/4118470.stm.

Related Topics:
Racist - National Assembly for Wales

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