Spending on teaching is lower than 50%, with remaining funds being used for other areas of university and student life.
Research by the Higher Education Policy Institute (HEPI) has revealed exactly where your tuition fees get spent – and it’s far from just the cost of teaching you.
Around 45% of the funds generated from each student’s £9,250 annual tuition fees in England is currently spent on the cost of teaching.
The remaining funds are spent on other necessary expenses, like buildings, technology and libraries, university administration, welfare support such as mental health services, and spending on the students’ union.
The findings come as students call for more transparency in how, where, and when the tuition fees they pay are spent.
How do universities spend tuition fees?
According to HEPI, very few students (less than 20%) want the money they are parting with to be spent on management staff, recruitment of students, advertising, or community work. Nonetheless, around 20% of funds are currently spent on these areas.
Contrastingly, over 60% of students believe that paying for teaching facilities and teaching staff is a “reasonable use” for the money raised by their tuition fees. That said, the report estimates that UK institutions may only spend 45% of this income on teaching.
The remaining money collected will be spent on a range of other services, including administration and infrastructure costs.
As a representative example, a breakdown of how tuition fees are spent by Nottingham Trent University has been shared.
Academic staff, course equipment, and staff-related costs received 39% of the overall funds collected from fees.
Other services and infrastructure, like buildings, libraries, IT services, sports facilities, careers help, admissions, employees, administration and welfare support received 36% of the fees.
The university used 17% of the income for “enhancing teaching, research infrastructure, and the student experience”.
The remaining 8% is left for professional services such as marketing, finance, and the vice chancellor’s pay packet.
Should universities say how they’re spending your tuition fees?
Nearly three quarters of students are calling for more information on how and where their universities are spending their tuition fees.
As concerns grow over the value of degrees in the UK compared to their cost, it’s crucial that something is done to address the perception that a degree is now no longer worth the financial outlay.
MPs recently said that the debt graduates leave higher education with outweighs the benefits they get from studying for a degree. What’s more, according to the Office for National Statistics, 49% of recent graduates were not working in graduate-level jobs in 2017.
In an effort to tackle these issues, Philip Augur’s review of post-18 education funding, which was commissioned by the government, is happening as we speak.
This process is examining how to redesign university tuition fees and Student Loans, and the findings are expected to be published at the beginning of 2019.
Why do universities charge for education?
HEPI’s research shows that UK universities have varying levels of dependency on the income from tuition fees – and the difference can be huge.
For the University of Cambridge, tuition fees only make up 15% of their income. At the other end of the scale, Falmouth University gets a huge 83% of its income from tuition fees, while at Nottingham Trent the figure stands at 81%.
This is why, for many of these institutions, there is an overwhelming pressure to recruit new students every year. Recently, an unnamed university had to be given a £1m bailout emergency loan by the Office for Students to avoid running out of money and being unable to pay its bills.
While the money has now been repaid, and the university is financially stable again, the incident exemplifies the challenges all universities face with reliance on student intake and fees – both of which can fluctuate from year to year.
Nick Hillman, director of HEPI, told the BBC:
The Office for Students added:
What will happen to university funding?
Today, the future of higher education funding in the UK is shrouded in uncertainty. Most people agree that something needs to be done, but we’re not yet sure what that will be.
Recent talk of reducing tuition fees for some courses to £6,500 has been met with a backlash, with university chiefs suggesting this may not actually benefit those who need the financial burden lifting.
They argue that if universities have to lessen the income they receive from fees, they will likely have to reduce the support they provide to students in the form of bursaries and other financial help.
A reduction in fees may also mean that institutions have to limit the number of places they offer on courses, owing to a reduction in money available to spend on teaching and facilities.
And, of course, fees aren’t the only problem. It seems as though the Augur Review is only set to address tuition fees, but at Save the Student we believe that Maintenance Loans are a far more pressing concern.
Our research has found that the average student’s Maintenance Loan leaves them £170 short of their monthly living costs. And with the scrapping of Maintenance Grants, most students are now graduating with at least £50,000 of debt.
It seems the entire post-18 funding system needs to be overhauled, but for now we can only wait and see if the Augur review will set us on the right path.
Discover if your course is rated as one of the best or worst in terms of its value for money.