With every English university announcing 2012 fee levels today, many will assume the higher the charge, the more money students will repay.

However, analysis by Martin Lewis, head of the Independent Taskforce on Student Finance Information and MoneySavingExpert.com founder, reveals it won't cost many students any more on a 9,000 course than on a cheaper equivalent.

It was revealed today more than a third of English universities have been granted permission to charge fees of 9,000 as standard from 2012. Students starting degree courses from next year face average tuition fees of almost 8,500.

The analysis headlines

  • Monthly repayments are identical, regardless of course fees. Graduates' monthly repayments will initially be 9% of everything they earn above 21,000 a year, from the April following graduation, under the 2012 system.
  • Many even earning 30,000 starting salaries (where salary rises by 5% each year) won't fully repay before the 30-year cut off if they pay 6,000/year fees and get the full living loan of 5,500 a year. This means a course with higher fees won't cost them more. Built into this assumption is that the threshold above which repayments are made rises by 4% a year.
  • With more institutions wanting to charge 9,000/year than expected, the Government could get more back than expected from those who earn enough to be able to repay in full.
  • 23% of parents will advise their child to go to a lower charging university, according to a YouGov poll, yet for many young people it won't make a difference.

Martin Lewis says: "It would be a tragedy if young people were put off going to university because of misplaced concerns about the true cost. Our analysis has revealed only the top graduate earners will pay back their fees in full.

"This is because graduates' monthly repayments are purely based on 9% of everything they earn above 21,000 a year, irrelevant of course fees. This is a higher level than for today's graduates, who repay 9% of everything above 15,000.

"So as they'll repay far less each month, future graduates will actually have much more disposable income than current ones.

"Yet the flip side of lower repayments, coupled with bigger fees and higher interest, is it takes much longer to repay the full amount.

"In fact, over the thirty years until the debt wipes, many graduates won't clear the combined tuition fee and living loans, even at the 6,000 level. So, in reality, there is no additional cost for picking a 9,000/year course."

Wes Streeting, deputy head of the Taskforce, says: "It's important graduates aren't put off going to the course they want to due to the headline fee level.

"First work out which course you think is right for you; if it's more expensive than others, remember you will only have to repay more if you earn a substantial salary after graduating.

"There are a whole range of factors that applicants may want to consider when making their decision, but the level of fee being charged on their course shouldn't be the only one."

On Our Forums

University fees