One in ten British students are rich enough to pay their university fees in one go, saving themselves from student debts and high-interest rates, a recent research study has revealed. Nearly 110,000 undergraduates pay their university fees upfront in a bid to escape the student fee system, securing a “get-out-of-jail-free card” from their affluent families, the report found.
The study conducted by the Intergenerational Foundation (IF) revealed that the number of self-funding students are higher on average at the universities in the Russell Group – the association that encompasses elite education institutions across the country. Moreover, universities with a higher number of self-funding students were often those with more students from private schools – whose parents opted to pay for their tuition fees.
IF is a charitable, UK-based think tank that endorses fairness between generations. The organisation also accuses British policymakers of giving more advantages to the older generation at the expense of the younger generation.
According to Angus Hanton, co-founder of the think tank, “This analysis makes a mockery of claims that the current system is progressive since the wealthiest kids are not even in the system.” Moreover, he called on the government to reduce the interest rates charged on student debts and urged them to cut-down tuition fees, along with renewing the maintenance grants “to ensure all learners are treated in a fair manner”.
The report was released at a time when government’s post-18 education and funding review, the Augur Review, is due to publish their suggestions and recommendations. Paying upfront means the richest students can save themselves from paying around £6,000 of interest charged on student debts while studying at the varsity. Meanwhile, students who borrow student funds are currently charged 6.3 percent in interest, four times more than the government’s borrowing rate of 1.5 percent.
According to Shakira Martin, president of the National Union of Students (NUS), “While wealthy students can avoid accruing student debts and the high interest which comes with student loans, too many students from low-income families grapple with a cost of living crisis and unaffordable housing. Wealthy students can focus on their studies, while too many poorer students work long hours to make ends meet.”
Wealthy students can focus on their studies, while too many poorer students work long hours to make ends meet.”
Moreover, a quarter of the 24 Russell Group universities in the UK had self-funding levels for full-time first degrees at more than twice the national average. These included King’s College London with 20 percent, Cambridge and Oxford with almost 16 percent each, University College London with 14.5 percent and LSE with 14 percent.
Figure highlighting the proportion of self-funded undergraduate students at Oxford University UK
According to Rakib Ehsan, the report’s author: “Wealthier families have realised that they can give their children a get-out-of-jail-free card by helping them to escape sky-high interest rates and a 30-year loan that could be sold off to the private sector in the future.”