By Zhao Xiaona, Larry Neild
LONDON, Oct. 27 (Xinhua) -- The British government will permanently link undergraduate tuition fees in England to inflation -- the first major overhaul of higher-education funding in more than a decade -- in a move universities welcome as long overdue but experts say will not fix the deep structural problems threatening the sector's financial sustainability and inclusiveness.
In recent years, universities have cut courses and laid off staff as inflation and frozen domestic fees eroded budgets. Many institutions warn that the current cap, unchanged since 2017, no longer covers the real cost of teaching amid rising energy, staffing, and maintenance expenses.
Under the reform, Post-16 Education and Skills White Paper, the government said the current tuition-fee cap of 9,535 pounds (12,704 U.S. dollars) will rise in line with forecast inflation for the next two academic years, with automatic uprating to follow once legislation is enacted.
Vivienne Stern, chief executive of Universities UK, called the move "a much-needed reset" after ten years of frozen fees and rising costs. "Linking undergraduate fees to inflation will help to halt the long-term erosion of universities' financial sustainability," she said. "We need our universities in great shape if we want national renewal."
Economist Franz Buscha of the University of Westminster said the change was inevitable given the widening funding gap. "The gap has simply become unsustainable," he said. "We've seen 15,000 academics lose their jobs and universities forced to merge. Index-linked fees won't bring a surplus, but they stop the system from collapsing."
Still, many analysts see the reform as a short-term relief rather than a cure.
Robin McAlpine, former deputy director of Universities Scotland, described the model as "a manufactured economy built on perpetual expansion." He said that every fee increase was presented as a solution to the funding crisis, "and it never is." Universities, he argued, "borrow to expand, expansion fuels more debt, and if student numbers stop growing, the model breaks down."
McAlpine said that high student debt may not directly exclude students with financial support needs, but it may "scare them off," adding that graduates effectively face a marginal tax rate close to 50 percent once loan repayments begin.
"Students from disadvantaged backgrounds are more price-sensitive and value income now over income later," Buscha said, warning that the policy could exacerbate inequality. "Smaller and lower-ranked universities, which often serve first-generation or local students, face the greatest risk of contraction. If those institutions disappear, we risk losing one of the key ladders of social mobility in Britain," he said.
Thomas Richardson, associate professor of clinical psychology at University of Southampton, said the mental-health effects of tuition debt are delayed but significant.
"We've found that higher tuition fees and larger debts are linked to greater depression and anxiety several years after graduation," he said. "For current students, the key factor affecting wellbeing is whether they can meet daily living costs -- rent, food, travel -- and many bursaries and maintenance loans have failed to keep pace with inflation."
A new analysis by Universities UK estimates that, even with the inflation adjustment, English universities will face a net funding reduction of about 2.2 billion pounds between 2025 and 2027. The report cites rising pension and insurance costs, cuts to teaching and research grants, and the proposed six percent levy on international student fees.
It warns that smaller regional institutions will be hit hardest, increasing the risk of further staff cuts and widening inequalities in access.
Buscha said the policy may "keep the lights on" but will not "fix the wiring," leaving the system financially fragile. He noted that many universities remain heavily reliant on income from international students to cross-subsidize domestic teaching -- a model now under threat from tighter visa rules and slowing demand from China and India.
"If that income stream dries up, the cost of educating a home student simply exceeds what universities earn," he said. "And the new six percent levy on overseas tuition fees means any extra revenue will again be clawed back by the government."
Experts say other pressures -- including growing pension liabilities, stagnant research funding, and declining postgraduate enrolment -- leave universities with limited capacity for recovery. They warn that without broader reform, inflation-linked fees will offer relief but not rescue for a system still struggling to balance access, affordability, and quality. (1 pound = 1.33 U.S. dollar) ■
