Higher tuition fees will cost taxpayers millions of pounds in the long term, and will save far less money than originally predicted, a report has revealed.
The controversial decision to raise fees to £9,000 will only save the public 5% less than if fees had remained at £3,000 a year, according to the publication from the Institute For Fiscal Studies.
Original predictions by the Office of Budget Responsibility predicted the fee rise would save the taxpayer 15%. The move to raise tuition fees was made by the coalition government in September 2012, amid numerous protests from politicians and students alike.
The report also estimated for every pound the government lends students in loans, only 57p would be paid back. On average, a student is loaned £40,000 meaning the government will lose £17,000 per student, as only those earning above £21,000 will have to pay back their student loans and unpaid loans are automatically cancelled after 30 years.
This predictions released on Thursday follow on the heels of a survey by the British Council charity which claims more than a third of British students are considering studying abroad, giving rising tuition fees as the main reason.
Author of the report Wenchao Jin described the public cost of the student loan system as "highly uncertain".
"Whether these reforms will have reduced the tax payer subsidy will remain unknown for many years to come," he concluded.
Shadow minister Liam Byrne said the IFS' report was "exactly right". He added: "The Tory-led government trebled student fees, but its system could end up costing more than the one it replaced."
A spokeswoman from the Department of Business, Innovation and Skills defended the government's actions, claiming as a result of coalition reforms, a greater proportion of disadvantaged students were going to university than ever before.
She added: "We have protected those on lower incomes by increasing the repayment threshold to £21,000.
"[The report's] figures for repayment are estimates and based on economic circumstances some 35 years in the future."Suggest a correction