The Telegraph (June 3, 2012i)
Universities give discounts on tuition fees paid up front
Universities are offering discounts of up to five per cent to students
who pay their tuition fees up front.
Gloucestershire University gives a £200 discount on its standard fee of
£8,250 a year Photo: Alamy
By Julie Henry, Education Correspondent8:00AM BST 03 Jun 2012
It means an individual can save more than £1,000 over the length of a
course, if they can afford to pay at the outset rather than take out a
Government-subsided loan.
While the drive to collect fees early will help to fill university
coffers, the discounts have been criticised by some academics for
benefiting only better-off families.
Most undergraduates starting university this year will take out a
state-backed loan to pay for tuition costs of up to £9,000 a year.
In these cases, the money is paid to universities by the Treasury in
instalments, while the students pay off their debts gradually after
they complete their courses.
However, all universities have a mechanism by which students are
allowed to pay their fees directly to the institution instead of taking
out a loan. Many allow payment in instalments by direct debit.Most do
not publicise the schemes in case it gives the impression that
undergraduates must settle the bill before they start their degree.
Now, a series of universities have introduced discounts of between 2
and 5 per cent for families who pay before the start of term. They
include Portsmouth, Gloucestershire, Swansea and Southampton Solent.
Portsmouth University gives a 2 per cent discount if the yearly bill is
settled, as does Swansea. Gloucestershire gives a £200 discount on its
standard fee of £8,250 a year.
At Southampton Solent, which is charging £7,800 a year, 5 per cent will
be taken off the bill, amounting to savings of £1,170 on a three-year
degree.
Sally Hunt, the general secretary of the University and Colleges Union,
said: “These discounts are likely to mean students leaning once again
on the bank of mum and dad, and will inevitably benefit those with the
deepest pockets. What a mess the Government has created for both
students and universities.”
The task force on student finance, headed by Martin Lewis, the
financial expert, and made up representatives from Universities UK and
the National Union of Students, cautioned against paying fees up front.
It said parents could be wasting their money if their child becomes a
low paid artist or full-time parent and never has a job which pays more
than £21,000 a year – the level at which loan repayments are triggered.
“Unless they are guaranteed a lifetime of high pay, it makes financial
sense to put the cash in a high paying ISA or savings account during
studies and take the loan out,” the task force said.
“Afterwards if it looks like the loan will have to be repaid, clear the
debt then. Or, alternatively, it may simply be better used towards
lowering a mortgage or car loan, which are worse and costlier forms of
debt.”
The Government recently dropped plans to levy a charge on students who
have taken out loans and want to repay early.
Figures published this week show university applications have fallen by
50,000 this year as growing numbers of students are put off by the rise
in tuition fees.
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