Forecasting the cost of the English HE funding system - November 2023

AoC commissioned London Economics to create a model to forecast the costs to government of four scenarios for higher education in 2030-31. The model takes account of forecast changes in population and participation based on current behaviour.

The four scenarios are a continuation of current trends, no growth in entry numbers, higher growth and a shift towards Level 4 and 5 provision. The report demonstrates that the costs of government will growth significantly over the coming demand.

In the baseline scenario (in which growth continues on the trend of the past three years), the number of first-year English domiciled undergraduate students (studying anywhere in the UK) is predicted to increase from approximately 522,000 in 2023-24 to 683,000 in 2030-31 (a 31% increase). This would see the total loan outlay in 2030-31 forecast to be roughly £25.63bn, including £12.14bn in maintenance loans and £13.50bn in tuition fee loans issued to students in that year – and with the total estimated ‘net’ (i.e. RAB-adjusted) cost of the English undergraduate HE funding system in 2030-31 standing at approximately £3.14bn.

The analysis also projects outlay and costs up to 2030-31 under three other scenarios, or no growth, higher growth, and a shift to growing Level 4 and 5 standalone qualifications in place of degrees.

Read the report