Impact of the Augar review: an independent assessment

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This briefing provides an independent assessment by London Economics of the impact of proposals in the Augar review on the exchequer, students, graduates and higher education institutions.

To inform the debate on proposals set out in the Augar report, UUK commissioned London Economics to provide an independent assessment of the impact of the report’s recommendations on the exchequer, students, graduates and higher Education institutions. The full analysis looks at the impact of proposed changes compared to the current system, across a range of measures including student loan debt on graduation, graduate lifetime loan repayments, costs to the exchequer and higher education institution funding.
 

Key findings

  • A reduction in the fee cap to £7,500 will result in a 36% fall in fee income to higher education institutions. Fully replacing lost income from fees will cost the taxpayer £1.82 billion, rising to £2.4 billion following the upcoming upturn in the population of young people from 2021–21. 

  • The reintroduction of maintenance grants for the most disadvantaged students is likely to benefit recruitment of this group, as well as potentially improving continuation rates. The most disadvantaged students who receive these grants will see a reduction in the average level of debt and lifetime repayments.

  • Although average debt on graduation falls across all students, from £46,800 to £35,900, lifetime loan repayments are expected to increase as a result of the reduction in the loan repayment threshold to £23,000 and the extension of the repayment period to 40 years.

  • The combined changes to repayment terms result in the highest earning graduates repaying their loans earlier, reducing their overall contribution. The highest earning men expected to pay around £20,000 less than under the current system.

  • Proposed reductions in fees and changes to student repayment terms, have an adverse impact on lower earning (predominantly female) graduates, with middle earning women expected to see their lifetime repayments increase by £7,100, and higher earning women seeing increases of £12,800.

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