University fees: Winners and losers

Make no mistake, if Lord Browne's blueprint is put into practice it will mean fundamental changes for higher education in England.

Allowing universities to charge whatever they want will mean unleashing the forces of competition - which will mean winners and losers.

WINNERS

The big winners are going to be the universities which can take advantage of the new unlimited fees.

Russell Group universities say the review gives them the extra funds they need

And these are going to be the universities - particularly the most prestigious, Russell Group universities, including Oxford and Cambridge - which can expect demand for places almost regardless of the cost.

The Russell Group has been given what it wanted it in terms of unlimited fees - giving these elite institutions the funding to compete with the academic powerhouses in the United States.

Money will be drawn upwards to the top - allowing the most sought-after universities to greatly increase their income from fees.

"Our graduates need to compete with the best in the world, and we would be letting them down if we didn't ensure they get the very best education," says the Russell Group.

It won't necessarily only be the most historic institutions that will be able to charge top rates - there will be new universities with highly-specialised vocational courses which could also allow them to boost their fee income.

A market in fees will also allow the research-intensive institutions - known as the 1994 Group - to use higher prices used as a marker of higher quality.

There are other people entering the winners' enclosure. Part-time students will now be on a level playing-field in terms of receiving financial support - putting right an anomaly in the previous fee system.

And there will be private university businesses, including in the United States, who will see this as a new market to be developed. Within hours of the report's publication there were e-mails arriving from US-based consultancies welcoming this opening of the system to private universities.

This could create a whole new type of university experience - aimed at cost-conscious students who might be working and living at home.

LOSERS

But what about the losers?

Students. Most of them. There's no escaping that they are going to be paying more, borrowing more and and many will be paying back at a higher rate of interest.

The basic fee is jumping from £3,290 to about £6,000. Lord Browne's fees model looks at fees that could double that again. That's real money that will have to be paid back once students start earning £21,000.

There will be support for students from poorer families, but it's not keeping pace with the increase in costs.

"Insufficient maintenance loans, failing to reflect the high costs of living, coupled with uncapped and elephantine tuition fees, mean that students will incur mass debt during their studies lasting decades beyond graduation," say the students at King's College London.

It's going to mean more handouts from parents. And there are already complaints from the "angry middle" - those middle-income families who feel they are going to be squeezed most by such a fee hike.

They'll miss out on support and they can't afford to write the cheques - and they'll worry that it will be their children who have to down size their ambitions.

There will also be deep concerns within the new universities that the proposed funding system is going to work against them.

At present, the cost of university places is shared between tuition fees and a government subsidy. But that government funding is going to be slashed.

University leaders, expecting extra funds, now face the prospect of the higher fees simply being used to fill the gap left by the disappearing state contribution.

The new model proposes that for many courses, costing about £7,000 per year, the tuition fee should cover the entire cost.

But will students at new universities, disproportionately likely to be from poorer backgrounds, be willing or able to pay £7,000 per year for degree courses?

If they can't pay or won't pay, what will happen to such courses?

Will they cease to be viable. Or else they would have to become much cheaper to run, with fewer staff, bigger classes, reduced facilities - which could leave universities in the position of having to charge higher fees for reduced services.

The Million+ group of new universities says the funding plan and the forthcoming spending cuts would be a "double whammy".

"Whether they like it or not, universities could be forced to charge higher fees yet they will still be worse-off than at present," say the new universities.

Even more bluntly, the report talks about entire institutions being taken over or shut down if they got into financial difficulties, something that has never happened before.