Education Minister: Tuition fees should reflect value to society

University tuition fees should reflect the economic benefit graduates will have to the country, the Education Secretary has said ahead of a sweeping review of higher education funding.

Damian Hinds' suggestion that fees should reflect the cost of delivering a course and future earnings - potentially signalling a cut in how much arts and humanities students are charged - as well as the needs of the country.

Another possible outcome is that expensive and high-value science and engineering courses could be subsidised by the state to keep costs under control for students.

Further details of the review in England will be announced by Theresa May on Monday, but on Sunday, Mr Hinds revealed that it would examine all aspects of tertiary education.

Mr Hinds said one of the reasons for the review is that "when the system was brought in, it wasn't anticipated that so many universities, so many courses would have the same fee for their course.

"There hasn't been as much variety that has come into the system as we would have expected and wanted so I think it's right to ask questions about that and see what can be done to stimulate that diversity and variety."

One of the central aspects of the review will be the current system of fees, which stand at £9,250 per year in England, a fee Mr Hinds described as "a very, very good deal" for some courses.

Speaking on The Andrew Marr Show, Mr Hinds said that while he did not "think politicians are going to be setting the cost and the prices for different courses...

"What we need to look at is the different aspects of pricing - the cost that it is to put on the course, the value that it is to the student and also the value to our society as a whole and to our economy for the future.

"There are some subjects, some areas both in higher education and technical education where we are going to need more of those coming forward in the future because of the changes, because of the new challenges in the world economy."

The panel carrying out the review could look at all aspects of tertiary education finance including the interest rate on student loans, he suggested.

Mr Hinds refused to be drawn on whether the review could lead to a fall in tuition fees.

The influential Commons Treasury Select Committee said the high interest rates - currently 6.1% - on student loans were "questionable".

"The panel can look at these different aspects," Mr Hinds said. "We absolutely can't look at one aspect of the situation in isolation from the others."

Asked if the review could cover the possibility of a graduate tax rather than the existing system he told the BBC show the review would "look at alternatives".

But he added: "We think it's right that if you benefit from a university degree you should make a contribution.

"That is what this current system does. What we are doing in the review is looking at how that system works, making sure there are alternatives, making sure there is more variety.

"That could include lower-cost ways of delivering education, it might mean shorter courses - which also means less time out of the labour market - more opportunities to be able to study while you work."

It could also look at areas such as part-time study and living costs.

Asked if the review could cover the possibility of a graduate tax rather than the existing system he said the review would "look at alternatives".

But he added: "We think it's right that if you benefit from a university degree you should make a contribution.

"That is what this current system does. What we are doing in the review is looking at how that system works, making sure there are alternatives, making sure there is more variety.

"That could include lower-cost ways of delivering education, it might mean shorter courses - which also means less time out of the labour market - more opportunities to be able to study while you work."

Also on The Andrew Marr Show was shadow education secretary Angela Rayner who attacked the Government's policy of replacing maintenance grants for some university students, with loans, arguing that the policy change was driving less-well-off students away.

However, Mr Hinds defended the decision to scrap grants and replace them with maintenance loans, saying it allowed students to have access to more cash to cope with living costs.

Ms Rayner said the Conservatives had "damaged higher education and totally decimated our further education infrastructure.

"Another review isn't going to solve the problem of the hike in interest rates which this Government has done and the tripling of tuition fees."

The announcements are likely to be met with close scrutiny by university leaders, as some warned that finding the right balance on tuition fees and university finance is likely to mean a "series of difficult trade-offs".

A spokesperson for the Russell Group, which represents 24 of the UK's most selective universities, said: "Any changes to the current funding model need to be fair and affordable to students, while still meeting the needs of taxpayers and universities in providing students with a high-quality education and experience."

Sally Hunt, general secretary of the University and College Union (UCU), said the review needed "to be radical and explore genuine alternatives to the current system, not just tinker at the edges of the current failed system".

Speaking on Peston On Sunday, former education secretary Justine Greening said that the issue of student loans must stopped being treated "like a political football".

Ms Greening also suggested a fund, rather than the current loans system to fund higher education.

The 48-year-old suggested that rather than paying off their own fees, former students would pay into a fund to pay the fees of future students.

She continued that employers could contribute to this fund for the degrees they need and benefit from.