New two-year degrees – will students actually save money?
The Government has set out plans for accelerated two-year degrees which it claims will save students at least £5,500 in tuition fees compared to a three-year course. But Martin Lewis has warned that while it means lower living costs at uni, many students won't pay any less for their studies.
The new accelerated courses would condense the same amount of teaching as a three-year degree into two years, by giving students longer hours and shorter holidays.
The maximum annual fees would also be lifted by 20% to £11,000 per year – from the current maximum of £9,250 per year for three-year courses – but the Department for Education claims that students would save 20% overall by paying for only two years of tuition.
Under the current system, however, students only repay 9% of their earnings over £25,000 (£25,725 from April 2019) until the debt is wiped after 30 years.
As most low and middle earners will never repay their student loans at this rate, only the highest earners would save any money by taking a 'cheaper' course.
See our Student Loans Mythbusting guide for more info on the real cost of student loans.
Martin: 'The cost of a degree isn't about what you borrow, it's about what you earn afterwards'
MoneySavingExpert.com founder and chairman Martin Lewis said: "This isn't a problem with people doing two-year degrees rather than three-year degrees. It's with the classic oversimplification that you'll pay less for a lower-cost degree.
"Under the current system, the cost of a degree isn't about what you borrow, it's about what you earn afterwards.
"For many, you’ll still pay the same back for tuition, so the real saving is on living costs, as you'll only need cash to live on for two years rather than three. The Government doesn’t give most under-25s the full loan, and to make up that gap it expects what is in practice a parental contribution.
"While shortening degrees will lower the total amount parents need to give, some of that is countered because students will be studying for longer hours so will not be able to do as much paid work during their course."
What does the Government say?
Universities Minister Sam Gyimah said the two-year degrees would meet exactly the same quality assurance measures as standard degrees and will provide exactly the same level of qualification.
He said: "Accelerated degrees not only make it possible for the next generation of students to access higher education and the undeniable financial, academic and personal benefits it has to offer, but drives the sector to offer dynamic choices that serve students' needs.
"Providers will be able to tap into a new market of students, particularly mature students, who were previously locked out of higher education.
"This provision creates a new arena of competition that delivers for students, taxpayers and employers."
The plans would have to be approved by Parliament before they take effect.
This article was amended to clarify Martin's quote.