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New reports shed light on differences in higher education fees and funding systems across the UK

  • 6 February 2024

As part of a research project funded by the Nuffield Foundation ahead of the next general election, London Economics have undertaken a range of in-depth analyses in relation to higher education fees and funding arrangements across the four parts of the United Kingdom. The Higher Education Policy Institute ( is working with London Economics and the Nuffield Foundation to publicise the results, including on a series of discussion events around the UK (more details below).

Disagreement over how higher education is funded has resulted in significant political tensions across the UK since the 1990s. Most major political parties have made significant manifesto commitments at successive elections or following unsuccessful electoral campaigns. This year looks set to be no different.

There is a widespread lack of understanding of higher education funding systems. As a result, many election pledges or post-election system amendments have been poorly thought through, and there have been significant unintended and adverse impacts on different groups of students and graduates.

Higher education is a devolved matter. As a result, there are fundamental differences between the four home nations in their approaches to funding higher education institutions (HEIs) and students. Given these differences, the unit of resource available to institutions, the overall costs to the Exchequer, students’ debt on graduation and graduate loan repayments and the balance of contribution between the Exchequer and students/graduates all vary markedly across the home nations.

  • In England, the average Exchequer cost of the system per student in 2023/24 stands at only approximately £1,630. This compares to £9,130 in Scotland, £3,780 in Wales, and £4,810 in Northern Ireland.
  • English HEIs receive approximately £10,220 in net income per student, while Scottish universities accrue 23% less (£7,870). The corresponding levels of net HEI income per student stand at £9,290 in Wales (9% less than in England), and £7,620 in Northern Ireland (this is the lowest level across the four home nations, and approximately 25% less than in England).
  • In aggregate, the Exchequer contributes approximately 16% of the total cost of higher education provision per cohort in England, while students/graduates contribute the remaining 84%. This compares to an Exchequer contribution of 113% in Scotland (ie students are effectively paid to attend higher education), 44% in Wales and 51% in Northern Ireland.

Dr Gavan Conlon, Partner at London Economics, said:

In a general election year, all political parties are considering how to approach the issue of higher education fees and funding. The challenge is that the economics doesn’t always align with the politics. Universities are generally underfunded, but increasing the tuition fee is electorally challenging. Raising maintenance support is critical, but expensive.

Political parties across the home nations really need to better understand how their funding systems operate so that the consequences of any manifesto commitments are fully understood.

Dr Emily Tanner, Programme Head for Post 14 Education and Skills at the Nuffield Foundation, said:

London Economics’ analysis is supported by the Nuffield Foundation as part of a wider programme to inform policy, pledges and public debate in the run-up to the general election. Today’s report provides an invaluable resource for understanding how the fees and funding systems compare across the UK and what explains the difference.

Maike Halterbeck, Divisional Director at London Economics, said:

There are huge differences in how higher education is funded across the home nations. While a lot of the debate has been focused on England, this is the first time this type of analysis has been undertaken for all home nations. The effects of changes in each system can be counter-intuitive – what looks good on paper can have the opposite effect in reality – so it is essential that policy makers across the UK make evidence-based decisions based on a proper understanding of how higher education funding work.

The reports associated with the research project are available here: They cover:

  • a short cross-country comparison
  • ENGLAND: a slidepack on current fees & funding arrangements, alongside three alternative scenarios: lower fees and higher teaching grants; more generous maintenance loans; and the reintroduction of real interest rates on student loans
  • SCOTLAND: a slidepack on fees & funding arrangements, alongside three alternative scenarios: the use of tuition fees; more generous maintenance support; and the introduction of real interest rates on student loans
  • WALES: a slidepack on fees & funding arrangements, alongside three alternative scenarios: higher fees; faster uprating of the earnings threshold for loan repayments; and reduction of real student loan interest rates
  • NORTHERN IRELAND: a slidepack on fees & funding arrangements, alongside three alternative scenarios: higher fees and lower teaching grants; more generous maintenance loans; and the introduction of real interest rates on student loans

Notes for Editors

  1. As part of this work, the Higher Education Policy Institute ( is working with London Economics and the Nuffield Foundation to host four free in-person events on the research in each of the four home nations: London event (28 February 2024 2pm); Belfast event (1 March 2024 1pm); Edinburgh event (4 March 2024 2pm); and Cardiff event (6 March 2024 2pm).
  2. London Economics is one of Europe’s leading specialist economics and policy consultancies. With a dedicated division of professional economists specialised in education and labour markets, we have unparalleled experience across the education sector. As a result of our independence and the quality of the analysis we undertake, we are considered sector experts, and often deliver economic insight to key policy makers and stakeholders. Our experience covers a wide spectrum of clients – including UK central Government Departments and Non-Departmental Public Bodies, Devolved Governments, university Mission Groups, university and college membership associations, think tanks, unions, individual higher education and further education institutions, and regulators. For more information, visit
  3. London Economics gratefully acknowledge the support of the Nuffield Foundation(Grant FR-24390), which is funding this project. The Nuffield Foundation is an independent charitable trust with a mission to advance social well-being. It funds research that informs social policy, primarily in Education, Welfare, and Justice. It also funds student programmes that provide opportunities for young people to develop skills in quantitative and scientific methods. The Nuffield Foundation is the founder and co-funder of the Nuffield Council on Bioethics, the Ada Lovelace Institute, and the Nuffield Family Justice Observatory. The Foundation has funded this project, but the views expressed are those of the authors and not necessarily the Foundation. Visit Additional information in respect of the scope of the Nuffield Foundation funded project are available here:

1 comment

  1. Albert Wright says:

    A very helpful contribution to understanding the funding structure differences across the 4 nations. It shows how much the average student pays and how much is invested per student by the state.

    English institutions get the highest income per student and English students make the highest contributions per head compared to the other nations.

    However, this does not get us very far in improving our detailed understanding at a more granular level of what the impact is for specific students and specific universities.

    For example, the cost to deliver individual courses varies widely with medicine at over £100,000 per qualification compared with history at around £25,000. The mix by subject area has a major impact.

    Cross course subsidies are further affected by cross subsidies from research income and other income sources, including the higher income per student from overseas students who can often bring in twice the amount of what a university gets from admitting an English funded student.

    Some universities have much higher costs to run their universities compared to others because of where they have their buildings how much interest they pay on their loans, how much they pay for pensions to former staff etc.

    At the student level, for students who have their loans written off after 40 years, their personal total cash contribution may be higher or lower than other students who pay off loans more quickly at possibly different interest rates over 40 years.

    When it comes to what the state / tax payers get back by way of benefit for society the position is also clouded by whether or not the student stays in the UK, whether the students drop out at a different rate of loss at different univesities, how much their students pay in tax after they have left university etc

    The allocation of funds to different universities is a complex issue to “get right”.

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