WEEKEND READING: What if English universities itemised tuition fees like US universities?

Join the Policy Institute at King’s College London and HEPI on Tuesday 15 September, from 6.30pm to 7.45pm, at Bush House, London, for a free event exploring the future of higher education in England. Drawing on Professor Sir Chris Husbands’ report, New choices: Revisiting futures for higher education in England, the discussion will consider how financial pressures, generative AI, changing student expectations and declining public trust are reshaping the sector – and the choices universities and government need to make now to secure a sustainable future. Register here.

This blog was kindly authored by Vincenzo Raimo and Jamie Warner, both independent higher education consultants.

We recently came across a LinkedIn post from the father of a student about to begin his studies at Virginia Tech in the United States. He had shared his son’s tuition fee statement, which itemised not just tuition itself but a whole range of compulsory charges for technology, student health, library access, sports and student activities, student services, and even a separate orientation fee.

It made us wonder what an equivalent fee statement might look like for students at an English university. Not because we think we should necessarily adopt the American approach but because increasingly students and parents are asking: what exactly are we paying for?

A little over a decade ago, when the undergraduate tuition fee in England increased to £9,000, many universities published attractive infographics showing how that money was spent. They typically divided the fee between headings such as teaching, libraries, student support, estates and administration. The intention was to demonstrate value for money and reassure students that their fees were being spent on their education.

Those graphics undoubtedly served a purpose, but they also told only part of the story.

For one thing, they often implied that tuition fees were spent directly on the individual student. In reality, universities are complex organisations with multiple income streams including research funding, international tuition fees, commercial activities, philanthropy and investment income. Tuition fees become part of a much larger pool of funding rather than being ring-fenced for individual students or courses.

More importantly, they rarely acknowledged some of the characteristics that define a modern, comprehensive university

Academic staff don’t simply teach. They also undertake research, scholarship, curriculum development, knowledge exchange, enterprise, public engagement and academic leadership. Universities maintain laboratories, libraries, museums, archives, specialist collections and research facilities that enrich the learning environment but are difficult to allocate neatly under a heading such as teaching. Nor did those graphics usually recognise the cost of servicing the borrowing used to finance new buildings and major infrastructure projects, or investing in the next generation of digital and physical learning spaces. Whether or not one agrees with those investment decisions, they are now a significant part of the economics of running many modern universities.

Perhaps that is one reason why most of those ‘where your tuition fee goes’ graphics have quietly disappeared.

There is another interesting aspect to this discussion. Whether in Virginia or in Nottingham, students inevitably contribute towards facilities and services they may never personally use. A History student helps support laboratories. An Engineering student contributes towards libraries and archives they may rarely visit. Many students never use the sports centre but contribute to its upkeep. Equally, research-active academics may spend part of their time creating knowledge rather than standing in front of a lecture theatre.

That is not a flaw in the system. It is simply part of belonging to a university rather than purchasing a series of individual services. Indeed, one of the distinguishing characteristics of a comprehensive university is that students benefit from being part of a much broader academic community than their own degree programme alone. They study alongside students from other disciplines, learn from research-active academics, and have access to a wider range of facilities, expertise and opportunities than they may ever use personally. Those shared resources are part of the educational experience, even if no individual student makes use of all of them.

Now imagine how the current maximum regulated undergraduate tuition fee in England (£9,535) might be presented.

To make this thought experiment more realistic, we have based the illustrative figures on the latest available HESA Finance data for 2024–25 together with the Office for Students’ 2023-24 analysis of sector-wide TRAC cost recovery rates. HESA groups university expenditure into broad accounting categories; we have translated those into language that we hope is more meaningful for students while retaining the same underlying pattern of expenditure.

The figures represent sector averages rather than the finances of any individual university or course, applying the 89.2% TRAC recovery rate for home students reported in OfS’s 2023–24 analysis. They should not be interpreted as the cost or financial performance of any individual course, and cross-subsidy between subjects, courses and activities is a longstanding feature of the university funding model.

Annual Undergraduate Tuition Fee Statement, along with university contribution (illustrative): £9,535

Now imagine the same approach for an international undergraduate paying, say, £24,000 per year. The same methodology is applied to the international undergraduate example, using a full economic cost recovery rate of 143.1%. This produces the reverse position: the illustrative fee exceeds the estimated cost of provision. Rather than presenting the difference as a ‘negative subsidy’, we describe it as an investment in educational quality and the wider university community, reflecting the contribution international fee income makes to research, specialist provision, facilities and the broader institutional mission.

Annual International Undergraduate Tuition Fee Statement (illustrative): £24,000

The final category is perhaps the most interesting – though, again, the £7,229 figure attached to it here is a sector-wide average, not a claim about any actual university’s accounts. Cross-subsidy has long been part of the economics of higher education. International tuition fees do not simply fund the education of international students. They also help sustain research, expensive disciplines, specialist facilities, widening participation, civic engagement and future investment. Equally, domestic tuition fees contribute towards maintaining the wider academic environment from which all students benefit, even if those benefits are not always visible on a timetable or in a module handbook.

Perhaps universities have sometimes been reluctant to explain this explicitly to their current and future students.

The Virginia Tech statement itemises the cost of higher education, while English universities have traditionally presented tuition as a single, all-inclusive fee. Yet, in both cases, students are contributing to much more than the individual services they personally use. They are helping to sustain an academic community that combines teaching, research, specialist facilities and a wide range of shared resources.

It is almost the opposite of the medieval University of Bologna, where students effectively hired individual scholars to teach them. Today’s universities are far more complex institutions. Students are not simply buying lectures; they are joining an academic community that combines teaching, research, innovation, culture and public engagement. Their tuition fee helps sustain that wider ecosystem.

We are not suggesting English universities should copy the American approach. But the exercise has been revealing. Attempting to explain what the tuition fee supports quickly demonstrates just how difficult it is to separate teaching from research, libraries from laboratories, or individual students from the wider academic community. Perhaps that complexity is precisely what makes a university a university.

Perhaps the question should not simply be: where does my tuition fee go? But rather: what kind of university does my tuition fee help to create?