Education Secretary Bridget Phillipson is expected to announce the increase, which will link tuition fees to Retail Price Index (RPI) inflation. The fee rise, planned for September 2025, will affect A-level students currently applying to universities.
Since 2017, tuition fees have been capped at £9,250. While Labour has yet to confirm which month’s inflation data will be used, a 2.7% inflation link would see fees rise to approximately £9,500 next year.
Previously, it was suggested that tuition fees could reach £10,500 over the next five years, but ministers may refrain from committing to long-term increases as they review potential reforms to the current funding system.
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The proposed fee adjustment comes amid growing financial strain on universities, with 40% of English institutions projected to face deficits this year.
The last major increase came in 2012 under the Coalition government, which tripled fees to £9,000, followed by a minor rise to £9,250 in 2017.
However, the cap has remained, leading the Russell Group of elite universities to report losses of approximately £4,000 per UK student.
Universities have also faced setbacks from a sharp decline in international students following a government crackdown on dependent visas.
Home Office data shows that visa applications dropped by 16% between July and September compared to the same period in 2023.
Foreign students, who typically pay three to four times domestic tuition, had previously bolstered university finances, and their reduction has intensified calls for urgent government action.
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Insiders revealed to The Telegraph that a modest fee increase was anticipated in last week’s Budget, highlighting the urgency of the sector’s financial issues.
However, Chancellor Rachel Reeves refrained from allocating new funds to higher education in her initial Budget.
It’s believed she would face pressure to couple a fee increase with the reinstatement of maintenance grants, an expense that could cost the Treasury up to £2.3 billion annually, according to previous Labour estimates.
By announcing the inflation-linked fee rise outside a fiscal event, the government aims to buy time to overhaul the university funding system.
Phillipson is likely to present this as an initial step toward comprehensive reform, potentially opening the door to reinstating means-tested maintenance grants, which were scrapped by Lord Cameron in 2016.
The government may also explore changes to the tuition fee repayment model, with concerns mounting over the disproportionate burden of student debt on less-advantaged graduates.
Ministers have been consulting with senior university officials over recent months following repeated calls for immediate support.
Universities UK chief executive Vivienne Stern urged the government in September to “stabilize the ship” by linking fees to inflation as soon as 2025/26.
She argued that maintaining the status quo was untenable, emphasizing that funding per student would need to reach £12,000 to £13,000 if it had kept pace with inflation.
The Department for Education has yet to respond to requests for comment.
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