Hodge defends tiered college fees plan

Lifelong Learning, Further and Higher Education Minister Margaret Hodge today said that the government's plans for higher education "remain unchanged".

Ms Hodge was speaking following the publication of a Centre for the Economics of Education (CEE) paper entitled 'Does it pay to attend a prestigious university' which claims to prove that there is an added benefit of going to higher universities over modern universities.

The report finds that graduates from a top university earn on average between £9,000-£22,000 more after tax and over a lifetime compared to a 'similar' modern university graduate.

"This means that if we assume that a typical full time undergraduate course takes three years to complete, a representative student should be prepared to pay between £3000 and £7000 per annum more to attend a top university compared to the cost of attending a Modern university," said Ms Hodge.

"The wool has been pulled over peoples eyes for too long. By asking everyone to pay the same tuition fee regardless of the university they go to we have been implying the benefits of every university are the same. They are not. By enabling universities to charge differential fees we are lifting the wool from people's eyes, recognising difference, diversity and the premium that some universities can give you over others.

"This is an economic justification for allowing some universities to charge more than others. If potential students thought and acted rationally, then they would be willing to invest more in universities that offered them a better return on their investment."

The minister stressed that this was why the government proposed to scrap upfront fees, re-introduce the grant and pay the first £1100 of fees for the poorest students.

"We will also increase the threshold at which graduates repay their student loan to £15,000 which will save all students £450," she added.

(GMcG)