18/02/2018 22:30 GMT | Updated 19/02/2018 10:28 GMT

Poor Students Leave University With The Most Debt, Theresa May Admits

The PM will also accept the 'competitive market' hasn't delivered for students

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Students from the poorest backgrounds are left with the highest levels of debt when they graduate, Theresa May is set to admit as she launches a review of university funding.

The Prime Minister will use a speech on Monday to concede the UK has “one of the most expensive systems of university tuition in the world”, which leaves graduates saddled with thousands of pounds of debt.

May will confirm the review will look into how students from the poorest backgrounds “receive maintenance support”, amid growing concern that the replacing of support grants with loans in 2016 was adding to graduates’ financial woes.

Yet even before the review is launched, the Government has been criticised by Labour for not taking action to help students now.

Former Education Secretary Justine Greening also attacked her successor Damian Hinds after he suggested fees for arts and social science degrees should be lower than those for science, technology, engineering and maths (STEM) subjects. 

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Jeremy Corbyn vowed to scrap tuition fees if Labour won the 2017 General Election.

May is set to use her speech to reiterate Hinds concerns, and is expected to admit allowing universities to set their own fee levels has not resulted in a competitive market, with hardly any institutions choosing to charge less than the full amount they are allowed.

Speaking in Derbyshire, May is expected to say: “The competitive market between universities which the system of variable tuition fees envisaged has simply not emerged.

“All but a handful of universities charge the maximum possible fees for undergraduate courses.

“Three year courses remain the norm and the level of fees charged do not relate to the cost or quality of the course.

“We now have one of the most expensive systems of university tuition in the world.”

She will also note that the goal of making university truly accessible to young people from every background “is not made easier by a funding system which leaves students from the lowest-income households bearing the highest levels of debt, with many graduates left questioning the return they get for their investment.” 

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George Osborne announced student grants would be scrapped in 2015.

Tuition fee reform became one of the key points of difference between Labour and the Conservatives in the 2017 General Election.

Jeremy Corbyn’s pledge to scrap all fees was seen as instrumental in encouraging a wave of younger voters to turn out to vote for his party.

The Conservatives responded to this groundswell of support for reform by cancelling a planned increase in tuition fees from £9,250 to £9,500.

May also announced last year the point at which graduates would begin paying back their loan would increase from annual earnings of £21,000 to £25,000.

Hinds revealed plans to change the way fees would be calculated in an interview with the Sunday Times, saying they would be determined by “a combination of three things: the cost [to the university] to put it on, the benefit to the student and the benefit to our country and our economy”.

But asked on the BBC’s Andrew Marr Show on Sunday morning if certain courses could become cheaper, the Education Secretary replied: “I don’t think politicians are going to be setting the costs and the prices for different courses.

“All forms of education and all subjects have great value and great worth.”

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Former Education Secretary Justine Greening has spoken out against a variation in fees by subjects.

Greening, who was sacked as Education Secretary in the January reshuffle, claimed cutting the cost of humanities and social science subjects could deter students from poorer backgrounds signing up for more expensive science and engineering courses.

Appearing on ITV’s Peston on Sunday, Greening said: “The review is going to have a challenge working out what is a beneficial course.

“If you’re in the media industry and the creative industries this is one of our pretty important sectors for the economy.

“I think that many companies that have STEM degree skills shortages will wonder if it’s the right thing to make those degrees more expensive.

“I think the other thing that really matters from my perspective is social mobility and making sure that we don’t end up with a system where young people from more disadvantaged backgrounds will feel like maybe they ought to do one of the cheaper degrees rather than doing the degree that they actually want which will really unlock their potential and future.”

As well as university funding, the review will also look into how to encourage more people to study for technical qualifications instead of academic degrees.

May is due to say: “For those young people who do not go on to academic study, the routes into further technical and vocational training today are hard to navigate, the standards across the sector are too varied and the funding available to support them is patchy.

“So now is the time to take action to create a system that is flexible enough to ensure that everyone gets the education that suits them.”

Reacting to the speech, Neil Carberry, from the business group the CBI said the Government had to balance the cost of funding universities between graduates and those taxpayers “who may not benefit from university education themselves”.

He added: “Should the government be minded to change the system, the priority should be on boosting part-time learning and maintenance grants for the poorest students.

“Closing the gap in provision that has traditionally existed between further education and higher education has long been a business goal.

“But it would be wrong to pit higher education against further education and any reforms should encourage co-operation between the two.”