A New System of Top-Up Fees: A Brief on the Market Response of English Universities and Colleges

Fees will become an increasingly important funding source for public universities in the UK and throughout the OECD, caused in part by declining government subsidization and rising costs, as well as by an increasingly entrepreneurial drive by institutions themselves to increase revenues. Beginning in September 2006, universities and Further Education colleges in England and Wales will charge variable fees within limits set by a defined cap and by ministry demands for increases in institutional aid for lower income students. This essay chronicles the response of England’s universities. Not surprisingly, most will charge the maximum amount allowed; at the same time, levels of bursaries (financial aid) will vary between institutions. The response and plans of English universities, and the subsequent response of both the market and students, will likely have a significant influence on other OECD nations, particularly those in the European Union, as they gradually consider a similar variable fee scheme.