Affordability and quality of higher education

Approximate read time: 45 minutes

The House of Lords is scheduled to debate the following motion on 2 July 2026:

Baroness Deech (Crossbench) to move that this House takes note of the future affordability and quality of higher education.

As education is a devolved policy, this briefing focuses on higher education in England.

1. Key points

• Tuition fees are rising in line with forecast inflation from the 2025/26 academic year, having been frozen since 2017. Tuition fees are a major source of income for higher education providers. According to the Institute for Fiscal Studies (IFS), the fact they have not kept pace with inflation “is the main factor behind the sector’s worsening performance”.
• Maximum maintenance loan amounts have been increased in line with forecast inflation, but this did not keep pace with actual inflation in 2022/23 and 2023/24, leading to a fall in financial support in real terms. Most students undertake paid work during term-time.
• The average student debt for borrowers who finished their course in 2025 was £47,730. This is lower than the previous year, when the figure was £53,000. The government anticipates that £6.2bn or 29.6% of all student loans issued in 2024–25 will not be repaid.
• A lifelong learning entitlement (from 2027) will introduce a single system for post‑18 student finance and allow modular study.
• Targeted maintenance grants for lower-income students on certain courses are planned from 2028, funded by an international student levy. Higher education providers have said they face will difficulties in absorbing the cost of the levy.
• There are concerns about the financial sustainability of higher education providers. According to the IFS, the fact tuition fees for UK students have not kept pace with inflation “is the main factor behind the sector’s worsening performance”. The Office for Students (OfS), the higher education regulator, recently expressed concerns that forecast financial improvements in the sector are “heavily dependent” on predicted increases in student numbers, and that previous such predictions proved over optimistic.
• The OfS is currently working on regulatory reforms to the way quality is assessed, following an independent review of the OfS in 2024. It is consulting on proposals to limit the number of students that providers with lower quality rankings could recruit and the types of funding the provider could access.
• Currently most courses meet minimum standards and it is estimated that on average graduates will earn more than non-graduates over the course of their lifetime. However, there are concerns about some provision, and the outcomes for individual graduates will vary.
• The government set out its plans for the HE sector in the ‘Post-16 education and skills white paper’ in October 2025, including legislating for automatic tuition fee rises in line with forecast inflation, introducing the lifelong learning entitlement, reintroducing maintenance grants and working with the OfS to address poor-quality provision.

2. Affordability of higher education

2.1 Tuition fees

Students pay tuition fees to access courses at higher education (HE) institutions. The maximum tuition fee that HE providers in England could charge students for a full-time standard undergraduate course in the 2025/26 academic year was £9,535.^[1] This cap applies only to students with ‘home’ status, that is students who meet requirements about being resident and ‘settled’ in the UK.^[2] The cap applies only to undergraduate degrees, not postgraduate degrees.

The tuition fees HE providers can charge international students are not capped. The British Council suggests that international undergraduate tuition fees vary from £11,400 to £38,000, but some courses cost more than this.^[3] For instance, international tuition fees for 2026 entry to a medical or veterinary degree at Cambridge University are over £70,000.^[4]

Between 2017 and 2025, the tuition fee cap was frozen at £9,250.^[5] The Labour government announced in November 2024 that it would increase the cap by 3.1%, in line with forecast inflation, for the 2025/26 academic year. In November 2025, it announced the cap will rise to £9,790 (an increase of 2.71%) in the 2026/27 academic year and £10,050 (an increase of 2.68%) in the 2027/28 academic year, again in line with forecast inflation.^[6]

To charge the maximum level of tuition fees, HE providers must have both:^[7]

• a teaching excellence framework (TEF) award from the OfS
• an access and participation plan (APP) approved by the OfS

The OfS is the regulator for HE in England.^[8] The TEF is a scheme run by the OfS that assesses and rates universities and colleges for excellence above minimum requirements for quality and standards (see section 3.1 of this briefing for further information).^[9] An APP sets out how a provider plans to improve equality of opportunity for students from disadvantaged backgrounds to access, succeed in, and progress from higher education.^[10] Providers that have neither a TEF award nor an APP, or only one of the two, are subject to lower caps on the tuition fees they can charge students.^[11]

Further information about tuition fees is available in the House of Commons Library briefing ‘Tuition fees in England: History, debates and international comparisons’ (23 February 2026).

2.2 Financial support for students

Student loans

Full-time undergraduate students can apply to Student Finance England for:^[12]

• a tuition fee loan to help pay course tuition fees for eligible undergraduate courses, initial teaching training courses or postgraduate certificates of education (PGCEs)
• a maintenance loan to help with living costs

To receive support from Student Finance England, students must meet eligibility criteria, including being allocated ‘home’ student status by Student Finance England.^[13]

The value of a tuition fee loan is up to £9,535 in the 2025/26 academic year and £9,790 in the 2026/27 academic year, in other words equal to the tuition fee cap level.^[14] The loan is paid directly to the HE provider.

The amount of the maintenance loan that a student can receive depends on their living arrangements and their household income.^[15] The assessment of household income includes the student’s income from savings, investment or property, and may also take into account the income of the student’s parents or partner, depending on the student’s age and circumstances.^[16] All eligible students can get the basic non-income assessed minimum amount of maintenance loan, but students may receive a higher amount of maintenance loan by providing details of their household income when they apply to Student Finance England.^[17] The maximum maintenance loan is available to students with household incomes up to £25,000. Those with higher household incomes receive a smaller loan, and those with the highest household incomes (for example over around £58,000 if they are living with their parents, or over around £62,000 if they are living in London away from their parents) receive only the minimum maintenance loan. Table 1 shows the minimum and maximum maintenance loan amounts for the 2026/27 academic year. Maintenance loans are paid directly to the student’s bank account in instalments at the start of each term.^[18]

Table 1. Minimum and maximum maintenance loan amounts, 2026/27 academic year

(HM Government, ‘Student finance for undergraduates: New full-time students’, accessed 19 June 2026; and Student Loans Company, ‘Understanding student living costs’, 20 January 2026.)

Extra financial help may be available for students who are on a low income, have a disability, have children, or are studying certain courses like nursing, social work or teacher training.^[19]

Part-time undergraduate students can also apply for tuition and maintenance fee loans if they are taking modules worth at least 25% of the credits that a full-time student would study.^[20] The maximum tuition fee loan is equal to the part-time tuition fee cap; the maximum maintenance loan is reduced in proportion to the intensity of study of the part-time course in comparison to a full-time course.^[21]

Separate schemes apply to postgraduate study. Students can apply for a postgraduate master’s loan or postgraduate doctoral loan from Student Finance England. These loans are to help towards both tuition and living costs.^[22] They are paid directly to the student and are not based on household income. For the 2026/27 academic year, the maximum postgraduate master’s loan is £13,206 and the maximum postgraduate doctoral loan is £31,222. These amounts are the total loan for the whole course, not per academic year.

Changes from 1 January 2027: Lifelong learning entitlement

The government is bringing in a new student finance system, the ‘lifelong learning entitlement’ (LLE), for courses starting on or after 1 January 2027.^[23] The LLE will create one system for applying for post-18 student finance, replacing the current separate schemes for higher education student finance loans and advanced learner loans for further education courses.^[24]

The LLE loan will be available for full courses at levels 4 to 6 (bachelor’s honours degrees are level 6), postgraduate courses currently funded by the HE student finance system, such as initial teacher training, integrated master’s degrees and foundation years that form part of an overall bachelor’s degree.^[25] It will also be available for modules of approved higher technical qualifications at levels 4 and 5, and modules from full level 6 qualifications that align to priority skills needs or the modern industrial strategy.

Eligible students will be able to access:

• a tuition fee loan, with new learners able to access up to the full entitlement of £39,160—equal to four years of study based on the maximum tuition fee for academic year 2026/27
• a maintenance loan to cover living costs, for courses with in-person attendance

The LLE will introduce a method for setting course fee limits based on credits, relating directly to the amount of study in a course rather than the number of academic years that are studied. Additional entitlement will be available for priority subjects and longer courses, such as medicine. A “residual entitlement” will also be available to returning eligible learners who have already received publicly funded student finance. Currently, students usually only get student finance if they are doing their first HE qualification, even if their previous HE course was self-funded.^[26]

For all courses and modules the LLE funds, eligible in-person learners will also be able to access maintenance loans towards their living costs.^[27] The maintenance loan amount will depend on the learner’s living arrangements and household income.^[28] The existing rules for assessing household income and calculating deductions will not change for full-time or part-time students. The amount of the loan will also depend on how much the learner is studying: if they are taking fewer than 120 credits per year, the loan will be reduced proportionally.

The government has said the introduction of the LLE will “deliver transformational change to the current student finance system by broadening access to high-quality, flexible education and training [and] supporting greater learning mobility between institutions”.

Further information about the LLE is available in the House of Commons Library briefing ‘The lifelong learning entitlement’, 9 September 2025.

Changes from 2028/2029 academic year: Maintenance grants

The government announced in September 2025 that it would introduce targeted, means-tested maintenance grants for students from low-income households in higher education.^[29] This will be funded by a new levy on international student fees. The levy will require HE providers to pay a flat fee of £925 per international student per year from 1 October 2028.^[30]

The government plans to introduce the new maintenance grants in the 2028/29 academic year.^[31] Maintenance grants will be paid to eligible students in addition to maintenance loans. Unlike loans, the grants will not need to be repaid. The grants will:

• Provide £1,000 per year (cash value in 2028/29) in a student’s first and second years of study if their household residual income is below the means-testing threshold (currently £25,000). This will reduce to £750 in the third year of study onwards.
• Taper down to a minimum of £500 per year for students with household residual incomes of £5,000 above the means-testing threshold. This will reduce to a minimum of £375 in the third year of study onwards.

Students whose household residual income is more than £5,000 above the means-testing threshold will not be eligible. The maintenance grants will only be available to students studying certain subjects. The government says the list of subjects will be confirmed before the start of the 2028/29 academic year, drawing on work to assess future employment and skills priorities.

Value of student maintenance

The relative value of student maintenance support has changed over time and has been impacted by inflation. Analysis by the House of Commons Library found the following:^[32]

• Loans replaced grants for new students from 2016/17. Increases in the maximum loan amounts in the same year took the value to what was then its highest level in real terms.
• Maximum loan amounts increased gradually between 2016/17 and 2021/22.
• Inflation was much higher in 2022/23 and 2023/24 than the cash increase in maximum support levels. This led to real cuts in support of 7% in 2022/23 and 4% in 2023/24.
• The maximum support in 2023/24 was around £1,200 less than in 2021/22 in September 2025 prices (adjusted by CPI inflation).
• This cut, at 10% over two years, was larger than any real cuts seen in student support going back to the early 1960s.
• Maximum loan amounts have been increased by the government in line with forecast inflation, but differences between forecast and actual inflation were not ‘corrected’ in later years.
• There were only very small changes in the real level of support in 2024/25 and 2025/26 and little real change is expected in the 2026/27.

Further analysis, including looking back over a longer period of time, is available in the House of Commons Library briefing ‘The value of student maintenance support’, 18 March 2026.

Government guidance notes that students who do not get the full amount of maintenance loan “may have to find other ways to fund the rest of [their] living costs”.^[33] It suggests this could include part-time work, local authority assistance, bursaries, scholarships or family contributions. Guidance from the Student Loans Company, the government-owned organisation that administers student loans, says that “for some students even the maximum amount of maintenance loan may not be enough to cover all their living costs”.^[34]

A report by the Higher Education Policy Institute and the Centre for Social Research Policy at the University of Loughborough, based on focus groups in university cities, estimated that “to have a minimum socially acceptable standard of living” a student in England would need £61,000 over the course of a three-year degree, or £77,000 in London, on top of tuition fees.^[35] The researchers calculated that a student receiving the highest level of maintenance support would need to work over 20 hours per week in term-time and vacations at the national minimum wage to support what they defined as a basic standard of living.

The annual student academic experience survey (SAES) run by the Higher Education Policy Institute and Advance HE has shown an increasing proportion of students undertaking paid work during term-time in recent years. The 2026 survey report noted that “as recently as five years ago this was less than four out of ten students, but in 2023 we saw a major change when this became a slight majority of students (up to 55%)”.^[36] This had increased to 68% by 2025 and was 65% in 2026, indicating that paid work was “becoming the norm rather than the exception for large cohorts of students”.

Further discussion of whether student support levels are sufficient is available in the House of Commons Library briefing ‘Student support for undergraduates in the UK in 2025/26’ (4 April 2025).

Student loan repayments

The repayment terms for student loans depend on where a student lived, what they were studying and when they took out the loan. There are five repayment plans in the UK, of which four are relevant for students who applied through Student Finance England.^[37] Each plan has different rules for the interest rate charged, the income threshold at which borrowers start making repayments, the percentage of their income over the threshold they pay once they start making repayments and the length of the repayment period. The terms applicable to each plan are summarised in table 2.

Table 2. Student loan repayment plans for loans applied for through Student Finance England

(HM Government, ‘Repaying your student loan: Which repayment plan you’re on’, ‘Repaying your student loan: When you start repaying’, ‘Repaying your student loan: How much you repay’ and ‘Repaying your student loan: When your student loan gets written off or cancelled’, all accessed 19 June 2026; and House of Commons Library, ‘Student loans: Interest rates and repayment thresholds FAQs’, 8 May 2026.)

Note: In April 2026, the government announced that the interest rate for plan 2 and 3 loans would be capped at 6% for the academic year 2026/27 starting on 1 September 2026 to protect graduates from “escalating student loan interest” and “the potential of inflation pressures due to the situation in the Middle East”.^[38]

Loans start to accrue interest from the day the Student Loans Company pays out the first loan instalment, but borrowers do not start to make repayments until their income reaches the relevant threshold for their plan.^[39] Interest continues to accrue if the borrower’s income is too low to make repayments. The outstanding amount of any loan is written off at the end of the repayment period.

The average debt amongst borrowers who finished their course in 2025 was £47,730 when they first became liable to repay it in April 2026.^[40] This is lower than the previous year, when the figure was £53,000. The Student Loans Company attributes the fall to the fact that the 2026 repayment cohort includes plan 5 borrowers for the first time. Differences in the length of time plan 5 loans have had to accrue interest and the terms of plan 5 compared to plan 2 loans are likely to have contributed to this.

The average annual higher education loan repayment made via HMRC was £1,150 per borrower in 2024/25, £30 more than the previous year.^[41] The government estimates that 56% of full-time undergraduate students starting in the 2024/25 academic year will repay their loan in full.^[42] This proportion is notably higher for these borrowers, who are on plan 5 loans, than previous cohorts on plan 2 loans. For full-time undergraduate students who started in the 2022/23 academic year, the government estimated that 32% would repay their loan in full.^[43] The government said that undergraduates starting their studies from 2023/24 onwards, when plan 5 loans were introduced, “are not expected to repay substantially more than they borrowed in real terms […] because plan 5 loans accrue interest at a rate linked to inflation”, unlike earlier plans with different interest rates.^[44]

The total amount paid out in higher education loans in England in 2024–25 was £20.6bn, of which £19.8bn was for undergraduate loans.^[45] The total higher education student loan balance was £267bn at the end of the 2024–25 financial year. The total outstanding student loan balance is forecast to grow to £492bn in real terms by 2046–47, and then to fall in real terms.^[46] The fall is partly due to loans being written off as early cohorts of plan 2 borrowers reach the end of their 30-year repayment period.

The government publishes figures showing what percentage of the loans issued each year it anticipates will not be repaid, known as the government subsidy or resource accounting and budgeting (RAB) charge. For all student loans issued in 2024–25, the RAB charge was £6.2bn, or 29.6% of the total £20.6bn issued.^[47] The level of government subsidy varies for different degree types and loan plans. For example, the RAB charge for full-time undergraduates taking out a plan 2 loan in 2024–25 is anticipated to be 54%, compared to 31% for full-time undergraduates taking out a plan 5 loan.^[48]

The Institute for Fiscal Studies (IFS) has noted that the current model of student support has different consequences for students depending on the level of their parental income and on their own earnings level after they have graduated:

The current system ensures that students attending university for the first time do not need to pay any up-front fees to attend university and have access to living cost support in the form of maintenance loans. However, the amount of a maintenance loan a student is eligible for depends on their parents’ income, and even the maximum rates are low compared with the cost of living in many parts of the UK. As a consequence, most students spend more than the maximum maintenance loan, and many students who do not receive parental transfers rely on part-time work to fund their studies.

For graduates, this system means that those with low earnings later in life contribute very little towards the cost of their degrees, and will not clear their loans by the end of the repayment period. For these graduates, the system therefore functions like a graduate tax: moderate changes to the repayment rate, repayment threshold or repayment period essentially constitute tax rises or cuts. In contrast, moderate changes in the loan interest rate have no effect on their lifetime repayments.

For high-earning graduates, who can expect to clear their loans before the end of the repayment period, the system functions more like a standard loan contract. For these graduates, the key parameter of the system is the interest rate: the higher the interest rate, the more they repay, provided they do not make voluntary repayments. In contrast, moderate changes to the repayment rate, repayment threshold or repayment period will mostly affect how quickly these graduates pay off their loans rather than how much they repay in total.^[49]

The National Union of Students (NUS) is campaigning for student loan reforms.^[50] Alex Stanley, NUS vice president for higher education, has argued the system is unfair, for example because the parental earnings threshold has been frozen at £25,000 since 2008, the salary point at which plan 2 borrowers must start to make repayments is frozen from 2027 until 2030 and the poorest students with the biggest maintenance loans take on the most debt.^[51]

For further analysis of student loan statistics, including long-term trends, see the House of Commons Library briefing ‘Student loan statistics’ (23 June 2026).

2.3 Financial sustainability of HE providers

The tuition fee cap has implications not just for the affordability of higher education for students, but for the financial model of the higher education sector as a whole. Tuition fees are a major source of income for HE providers. In 2024/25, course fees and education contracts accounted for 54% of the total income of HE providers in England.^[52] The proportion is forecast to be 56% in 2025/26. Table 3 shows the forecast breakdown by income source for the HE sector in England for 2025/26.

Table 3. Higher education sector in England, income 2025–26 (forecast)

(Office for Students, ‘Financial stability of higher education providers in England 2026’, 14 May 2026. See ‘Annex E: Sector financial data’, Excel spreadsheet, ‘Income_sources’ table.)

Of the £26bn that HE providers in England received in course fees and education contracts in 2024/25, £24.5bn (94%) was from tuition fees.^[53] The proportion is forecast to be the same in 2025/26. In both years, 55% of tuition fee income comes from UK-domiciled students, and 45% from non-UK domiciled students. In both years, the majority of the income from tuition fees from UK-domiciled students is for undergraduate degrees (87% in 2024/25 and forecast to be 86% in 2025/26). However, the tuition fee income from non-UK domiciled students is split almost evenly between undergraduate and postgraduate degrees.

The IFS argued in 2024 that the fact undergraduate tuition fees had not kept pace with inflation since 2012 is “the main factor behind the [higher education] sector’s worsening financial performance”.^[54] There have been concerns in recent years that this may lead some HE institutions to turn to other income sources that may not prove sustainable. The House of Commons Public Accounts Committee warned in 2022 that:

[…] some providers are heavily reliant on income from overseas students’ fees to cross-subsidise research and other activities, leaving them potentially exposed to significant financial risks should assumptions about future growth in international student numbers prove over-optimistic.^[55]

Similarly, in 2025, the government said:

Many providers have to cross-subsidise the costs of domestic teaching and research with income from other types of activity. Income from international student fees is used in this way, along with income from other activities such as franchising [where a university or college allows another organisation, which may not itself be a registered HE provider, to deliver all or part of an HE course on its behalf]. Over time, a growing number of providers have become increasingly reliant on these revenue streams, some of which are not sustainable.^[56]

The OfS reports each year on the financial sustainability of the sector. Its most recent report, published in May 2026, found:

The nature of the financial challenges facing the sector remains similar to those we have discussed in our previous analysis reports. This includes continued uncertainty about student recruitment, compounded by inflation and rising costs, with providers needing to continuously plan for future cost increases, including the predicted £570mn cost to the sector from the international student levy from 2028. The crisis in the Middle East is likely to have a further impact on costs, student recruitment and students’ cost of living. In response, we are seeing further sustained pressure on operating cashflow and diminishing liquidity levels.^[57]

Despite these pressures on HE institutions’ finances, the OfS noted some upturn:

Against this backdrop, the sector reported an improvement in aggregate financial performance in 2024–25. This represents a modest uplift compared with the previous year’s forecasts, which had expected a further deterioration. Total sector income grew by 2.7 percent in 2024–25, following stronger growth of 4.7 percent in 2023–24. Nearly half of the 2024–25 increase was driven by higher tuition fees and education contracts.

35.8 percent of providers reported a deficit in 2024–25. This was a notable improvement on expectations in the previous return, when 44.2 percent of the sector had forecast a deficit for the same period.

However, improvements at the aggregate level mask substantial variation in financial performance across the sector, and so should be interpreted with caution.^[58]

The OfS noted that providers forecast “an expected return to stronger surpluses from 2026–27 onwards”.^[59] However, it cautioned that “this anticipated recovery is heavily dependent on a significant expected increase in student recruitment”. Putting this in context, the OfS observed:

In 2024–25, overall student recruitment declined. UK student recruitment increased by 3.5 percent, but this was 8.6 percent below the sector’s previous forecast. Non-UK entrants fell by 7.7 percent, which was 9.0 percent below forecast. Despite those shortfalls between expected and actual student recruitment growth, providers continue to predict strong student growth in future years, forecasting a 19.9 percent increase in UK students and a 22.5 percent increase in internation students between 2024-25 and 2028–29.^[60]

The OfS concluded that “forecasts that repeatedly assume strong future growth are potentially masking the need for more fundamental structural changes for some providers, and the need in some cases for new business models, including mergers and other forms of consolidation”.^[61]

The government said in March 2026 that over the next five years its planned increases to the tuition fee cap “could generate an additional £6bn for HE providers, significantly outweighing the currently projected less than £1bn cost of the [international student] levy”.^[62] It said this approach “ensures the sector benefits from compounding annual increases, delivering growing resources to support quality education and innovation”.

For further information about trends in higher education finances, student numbers and international students, see the following House of Commons Library briefings:

• ‘Higher education finances and funding in England’, 6 June 2025
• ‘Higher education student numbers’, 20 February 2026
• ‘International students in UK higher education’, 27 June 2025

3. Quality of higher education

3.1 Regulation of quality and standards

Quality and standards in higher education in England are regulated by the OfS.^[63] Its four primary regulatory objectives are to ensure that:

All students, from all backgrounds, and with the ability and desire to undertake higher education:

1. Are supported to access, succeed in, and progress from, higher education.
2. Receive a high-quality academic experience, and their interests are protected while they study or in the event of provider, campus or course closure.
3. Are able to progress into employment or further study, and their qualifications hold their value over time.
4. Receive value for money.^[64]

HE providers must register with the OfS in order to be able to award degrees, use the word ‘university’ in their name, recruit international students and recruit students who can access student loans from the Student Loans Company.^[65] HE providers that are registered in the appropriate category can also access direct grant funding to support the costs of teaching and research activities. All registered providers must comply with the OfS’s quality and standards conditions. When providers first seek to register with the OfS, they must demonstrate:^[66]

• they have credible plans to enable them to comply with conditions B1, B2 and B4 (see below), and the capacity and resources necessary to deliver those plans
• any standards they follow in awarding qualifications must follow the recognised sector standards

Registered providers must meet the following standards on an ongoing basis:^[67]

• Condition B1: Academic experience: The provider must ensure that students receive a high-quality academic experience, including ensuring that each course is up-to-date, provides educational challenge, is coherent, is effectively delivered and requires students to develop relevant skills.
• Condition B2: Resources, support and student engagement: The provider must ensure students receive resources, support and engagement to ensure they have a high-quality academic experience and they succeed in and beyond higher education.
• Condition B3: Student outcomes: Providers must deliver positive outcomes for students on their higher education courses. In 2022, the OfS attached numerical conditions to condition B3, setting out thresholds to meet for the proportion of students who continue their course from year to year (continuation), complete the course (completion) and progress into managerial or professional employment, further study or other positive outcomes (progression).^[68] Different thresholds apply for undergraduates and postgraduates and for full- and part-time study.
• Condition B4: Assessment and awards: The provider must ensure students are assessed effectively, that assessments are valid and reliable and that relevant awards are credible.
• Condition B5: Sector-recognised standards: The provider must ensure that standards appropriately reflect any applicable sector-recognised standards and are granted only to students whose knowledge and skills appropriately reflect these standards. This applies to awards granted to students who complete a higher education course provided by or on behalf of the provider, whether or not the provider is the awarding body.

The OfS describes these conditions as providing a “high quality baseline of performance for all universities and colleges”.^[69]

The OfS says that it takes a “risk-based approach” to regulation, “focus[ing] regulatory attention on those providers that are at greatest risk of breaching their conditions of regulation”.^[70] This works as follows:

The OfS undertakes an initial risk assessment when a provider is first registered, making a judgment about whether providers meet initial conditions of registration. If it has concerns that a provider could breach a condition after registration, it may impose specific conditions on that provider until it is satisfied the risk is low, for example, by limiting the number of students a provider could recruit.

Once registered, ongoing risk-based monitoring takes place. Updates are made to the risk assessment when new information and intelligence, such as reportable events [submitted by the provider] and notifications [submitted by students, staff or members of the public], are received. […] If a provider is assessed as being at risk of or in breach of its conditions, the OfS may impose increased monitoring requirements or specific conditions of registration. If a provider is found to have breached a condition of registration the OfS can also impose sanctions.^[71]

In addition to the baseline standards, universities and colleges with more than 500 undergraduate students are required to participate in the ‘Teaching excellence framework’ (TEF).^[72] The TEF is voluntary for other institutions. The OfS describes the TEF as the mechanism it uses to “incentivise improvement, or excellence, beyond the high quality baseline”. Universities and colleges make submissions every four years and are assessed by an expert panel. They receive an overall rating and two underpinning ratings, one for student experience and one for student outcomes.^[73] There are three ratings: gold (outstanding), silver (very high quality) and bronze (high quality with some very high quality features). A provider will be assessed as ‘requires improvement’ if it has not shown enough evidence of excellence above the minimum requirements. Providers that do not have a TEF rating cannot charge the maximum level of tuition fees.

3.2 Reform of regulatory system

A process of reforming this regulatory system is under way, following an independent review of the OfS commissioned by the Conservative government and published in July 2024.

The review heard some criticisms of the way the OfS regulates for quality, including: ^[74]

• a lack of clarity about how providers are assessed for compliance with the conditions other than the B3 condition which has numerical thresholds
• whether contextual information around B3 metrics (such as students’ socio-economic backgrounds) was given sufficient weight when the OfS decided to undertake an investigation
• a lack of clarity about the reasons for an investigation being launched
• concerns about the timeliness of investigation processes

The review also heard “several positive reflections on the TEF”, with providers feeling it had had “a major impact on assessment, quality and feedback”.^[75] However, some providers with smaller numbers of students (for whom TEF participation is not compulsory) told the review that “the significant time and resource required to produce a submission was a material consideration when deciding to opt in”.

The review concluded that the interaction between the OfS two strands of work on quality—compliance with the B conditions, and the TEF—was “unclear and seemingly minimal”.^[76] It recommended that they “be brought together to form a more coherent and integrated assessment of quality”. It said this would “create a regulatory model that has a greater emphasis on incentivising the improvement of quality beyond minimum standards, across the sector and for all students”. It also recommended the OfS board should review its risk appetite approach “with a view to becoming more proactive in anticipating, identifying and responding rapidly to address emerging risk”.^[77]

In response to the review, the OfS said it would work with institutions to “develop an integrated quality system which would bring together our current quality assessment activities and methodologies”.^[78] It said it expected the TEF to “form the core of a more coherent system, with assessment activity covering a wider range of provision”. It ran an initial consultation on its proposals between September and December 2025.^[79] Key elements of the proposals were to:^[80]

• align TEF assessments more closely with the requirements for quality and standards and include assessments for student outcomes (condition B3)
• assess and rate all OfS-registered institutions on a cyclical basis, including smaller providers that have not taken part previously, but with a different assessment approach where there is limited data
• include undergraduate programmes only in the first cycle, and include postgraduate taught programmes from the second cycle onwards
• change the ratings so that ‘bronze’ means an institution is only delivering a minimum level of quality (in the current system it signifies delivery above the minimum level) and ‘requires improvement’ would mean there are concerns the institution is not delivering the minimum level of quality
• change the frequency of assessment so institutions with gold or silver rating would be assessed less often and may become eligible for some kinds of funding in the future, and those with bronze or ‘requires improvement’ would be assessed more frequently, could lose access to some types of funding and could face limits to future growth in student numbers

The OfS published the outcome of the consultation on 11 June 2026.^[81] It confirmed its intention to go ahead with these plans with some amendments, including:^[82]

• providers will receive separate ratings for ‘student experience’ and ‘student outcomes’ but no overall rating
• if a provider does not meet the minimum threshold for student outcomes (condition B3), actions the provider has taken to improve outcomes will be taken into account when assessing the provider, as long as the impact is demonstrable

The OfS is now developing more detailed proposals for a second stage consultation it plans to run in autumn 2026.^[83] This will include consulting on the incentives linked to TEF ratings and imposing student recruitment limits on providers rated bronze or ‘requires improvement’.^[84]

3.3 Outcomes data

Across the sector as a whole, the majority of courses met the thresholds for student outcomes (the B3 condition) on continuation, completion and participation.^[85] For example, for full-time students doing their first undergraduate degree:^[86]

• 88.7% of those who started their course between 2019–20 and 2022–23 continued to the second year of their course, compared to the threshold condition of 80%
• 88.4% of those who started their course between 2016–17 and 2019–20 completed their course, compared to the threshold condition of 75%
• 72.3% of those who started their course between 2019–20 and 2022–23 progressed to a managerial or professional position, further study or other ‘positive outcome’, compared to the threshold condition of 60%

However, the threshold was not reached for some modes and levels of study. For example, for part-time students taking undergraduate degrees with postgraduate components, only 55.8% of those who started their course between 2014–15 and 2017–18 completed their course, compared to the threshold condition of 60%. The Office for Students also published data in October 2025 showing evidence of “weaker outcomes” for students taught under subcontractual arrangements (also known as partnership arrangements or franchising).^[87] It found that students studying under these arrangements achieved lower continuation, completion and progression rates compared to full-time first degree students across the HE sector as a whole, and the rates all fell below the numerical threshold.

The most recent TEF assessment round took place in 2023. Of the 227 HE providers that took part:^[88]

• 51 (22%) were rated gold
• 125 (55%) were rated silver
• 48 (21%) were rated bronze
• 3 (1%) received a ‘requires improvement’ outcome

The OfS said the results confirmed “that outstanding provision is found across the sector”. Gold ratings were awarded to providers in all regions of England and to different types of providers (for example, those that had low, medium and high entry tariff requirements, and those that specialised in particular subjects). The providers taking part represented around 54% of all providers then registered with the OfS.^[89]

Data from the National Student Survey (NSS), which is run by the OfS to gather students’ opinions on the quality of their courses, indicates that students mostly rate their experience positively. Findings from the 2025 (NSS) showed that:^[90]

• 86.9% of students gave a positive rating (good or very good) for the teaching on their course
• 84.3% gave a positive rating for learning opportunities
• 80.9% gave a positive rating for assessment and feedback
• 87.8% gave a positive rating for academic feedback

The Higher Education Statistics Authority (HESA) also runs an annual graduate outcomes survey. The latest results, surveying those who graduated in 2023/24, were published in June 2026.^[91] Headline findings were that:

• 87% of graduates were in some form of further work or study
• 57% were in full-time employment, 5% were in further study and 7% were unemployed
• 68% agreed they were using what they learnt while studying

Using data for a cohort students born in the mid-1980s, the IFS has recently produced estimates for how much graduates from this group can expect to earn over their lifetime, and how much they would have earned over their lifetime had they not gone to university.^[92] The IFS concluded that on average, graduates earn substantially more than non-graduates in their 30s: by age 37 median salaries are 56% higher for women who attended university and 28% higher for men who attended university compared to their counterparts who did not attend university. The earnings gaps between graduates and non-graduates are projected to persist throughout their lives. Some of the earnings gap can be attributed to the background characteristics (gender, ethnicity and socio-economic status) and prior educational attainment of graduates and non-graduates. Adjusting for these factors, the IFS concluded that both women and men who attended university would earn around 20% more on average over their lifetimes than if they had not gone to university.

The IFS found that the ‘expected returns’ of doing a degree remained “large and positive” even after accounting for tax and the costs. It estimated the average graduate would be around 15% better off financially than a similar person who did not go to university, even after accounting for additional income tax, employee national insurance contributions and student loan repayments. However, it cautioned that these average figures “mask substantial variations in individual returns across people”, with the choice of degree subject being a significant factor in the estimated net lifetime returns. Returns were also estimated to be lower (but still positive on average) for students with lower prior attainment.

From the point of view of the taxpayer, the IFS concluded that “financing undergraduate degrees is a substantial investment […] but one that pays off in the long run, on average”. The cost to the exchequer of providing tuition fee and maintenance loans may be offset by student loan repayments and income tax and national insurance revenue. The IFS estimate that “the exchequer can expect average returns of £48,000 for women and £107,000 for men who enrol in university”, although it “can expect to make a loss on around 40% of degrees”.

4. Government policy

4.1 Post-16 education and skills white paper

The government set out its plans for the HE sector in the ‘Post-16 education and skills white paper’, published in October 2025. It said the HE sector was “one of our country’s most valuable strategic assets”, founded on “the high quality of teaching, research and student experience found right across our diverse sector”.^[93] Maintaining “a world-leading, high-quality experience for all” was one of the key objectives for higher education set out in the white paper. However, the government argued a “reset” was necessary to address factors such as demographic shifts, inflation, the increased cost of research and volatility of international student numbers.^[94] It said its ambition was to have “a more sustainable, more specialised and more efficient sector, better aligned with the needs of the economy”.

On tuition fees, the government said it would:^[95]

• Increase undergraduate tuition fee caps for all HE providers in line with forecast inflation in academic years 2026/27 and 2027/28.
• Legislate when parliamentary time allows to increase tuition fee caps automatically linked to inflation for future years. It said this would “balance the need to give the sector stability with fairness to students and taxpayers”.
• Make future fee uplifts conditional on HE providers achieving a higher quality threshold through the OfS’s quality regime. It said this would “protect taxpayers’ investment in higher education and reward providers for high quality”.

On financial support for students, the government said it would:^[96]

• Increase maintenance loans in line with forecast inflation every academic year. It said this would “ensure that students from the lowest income families receive the largest year-on-year cash increases in support, and provide students with certainty on the financial support they will receive while studying”.
• Introduce the lifelong learning entitlement to give new learners access to tuition fee loans for four years’ worth of education and training, to give returning learners a residual entitlement to loans to use across their working life, and to allow student finance on a modular basis for the first time, focused on key subjects for the economy.
• Introduce targeted means-tested maintenance grants for students from the lowest income households studying key subjects, funded by a new international student levy.
• Consult on making student support for level 6 degrees conditional on the inclusion of break points in degree programmes. The government said this would give learners the opportunity to break down their learning, achieving a level 4 qualification at the end of their first year and level 5 after their second year, and would connect level 4 and level 5 provision with internationally recognised degree-level providers.

On quality, the government said it would support the OfS in developing a reformed regulatory framework that “focuses on driving out pockets of poor performance, strives to continue to improve quality and safeguards the financial health of the system in a balanced and proportionate way”.^[97] It also said it would take measures to ensure the OfS has “the capacity and power to swiftly identify low-quality teaching provision, and intervene to tackle it”.^[98] Specific actions included:^[99]

• Considering options to increase capacity within the OfS for conducting quality investigations to allow it to respond to risks more rapidly.
• Legislating when parliamentary times allows to ensure the OfS could impose student recruitment limits where growth risked poor quality.
• Taking “firm action to address serious concerns about poor-quality provision, financial exploitation, and fraudulent practices among some franchise providers”, including defunding large franchise providers altogether unless they are registered with the OfS.
• Legislating to strengthen the OfS’s statutory powers to enable it to act quickly to investigate all regulatory risk and close down provision where fraud or misuse of public money is identified. Powers could include stronger search and entry powers, interim sanctions such as suspension of funding and final sanctions to be enforced through the courts.
• Exploring tightening eligibility for access to the student finance system, “to sever the income stream for unscrupulous agents by removing illegitimate student recruitment”.
• Working with the OfS to develop options for how to measure and compare progress in higher education to hold providers to account not just for student outcomes but for the progress they make. The government says this would “offer providers across the whole sector sharper incentives to improve quality and outcomes”.

The government also said that “too many providers with similar offerings are chasing the same students and there has been insufficient focus on each institution’s core purpose”.^[100] It said it wanted all higher education providers to consider how they could specialise in areas of strength and collaborate with each other to benefit students and the economy.^[101] The government said it expected to see more consolidation and formal collaboration in the sector, with providers working in partnership to make sure there was a comprehensive offer in their area with a diversity of subjects, qualifications and different modes of study. However, the government said it would not impose these changes on the sector.

The government reiterated in June 2026 that it was working to “crack down on poor-quality university courses”.^[102] It highlighted its plans to legislate to “limit the growth of some courses with consistently poor returns for students at some providers” and to tackle quality issues with franchised provision by requiring providers with 300 or more franchised students to register with the OfS or face losing access to student loan funding.

4.2 Reaction

Shadow Education Secretary Laura Trott said the rise in tuition fees would fall on taxpayers as well as students, “as it costs the Exchequer significant sums”.^[103] She argued the government was “doing nothing to help young people with debt-trap degrees”. She contrasted this with the Conservatives’ policy to end low-quality degrees. The Conservatives have proposed imposing student recruitment caps, with the number that HE institutions could recruit based on quality and graduate outcomes for individual courses.^[104]

Ian Sollom, the Liberal Democrat spokesperson, welcomed the re-introduction of maintenance grants, but argued “funding them by taxing international students is self-defeating”.^[105] He cited analysis by Public First suggesting that an increase in international student fees could lead to a drop in international students, which could result in around 135,000 fewer places for domestic students over five years if the reduction in international student revenue were paid for entirely by reducing subsidised domestic students.^[106] This analysis was based on an international student levy of 6% on all international fee income, rather than the current proposal of a flat rate fee per international student.

The House of Commons Education Committee said it had heard strong opposition from the higher education sector to the international student levy.^[107] The sector was concerned it might not be able to pass on the extra cost by charging higher fees to international students given competition from other countries wanting to attract them. The sector was therefore concerned it would struggle to absorb the cost. However, the committee welcomed the new maintenance grants to support UK students, given the real-terms fall in the value of maintenance loans in recent years.^[108] It called for further information on the rationale for which subjects would be eligible.

Universities UK, which represents 142 UK universities, welcomed the decision to raise undergraduate tuition fees in line with inflation in England.^[109] It said this would “help to halt the long-term erosion of universities’ financial sustainability, following decades of fee freezes”. However, it said the international student levy would mean universities would have to reduce the cross-subsidies that support teaching and research, and/or raise international fees further, which could drive down international student numbers.^[110]

The University Alliance, which represents professional and technical universities, welcomed the uprating of tuition fees and maintenance loans. It said these were a step to address “the decade long devaluation of income for universities and diminishing levels of support for students”.^[111] However, it was concerned about the possible impacts of the international student levy and said the government should “work with the sector to find alternative and less counter-intuitive ways to fund support for disadvantaged students”. It was also concerned about giving greater powers to the OfS and proposals to “penalise ‘underperforming’ universities” which could lead “ultimately to a differential fee system”.

The NUS said maintenance grants were “a welcome relief for prospective students”.^[112] However, it said they would “barely scratch the surface” at the amounts and income thresholds proposed. The NUS also argued that maintenance grants should be available for degrees in all subjects. It criticised the linkage between grants and an international student levy.

The University and College Union was critical of the proposals on quality regulation. It argued that “punishing institutions deemed to need improvement will harm the very students the government claims to be trying to help”.^[113] Instead, it believed that addressing pay and conditions in the sector would do more to improve teaching quality.

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This briefing was updated on 29 June 2026 to correct the figures in section 3.3 for continuation, completion and progress rates and student satisfaction ratings. The earlier version of the briefing (published on 25 June 2026) displayed incorrect figures due to a technical problem which resulted in numbers before the decimal place at the beginning of a bullet point being deleted when the briefing was uploaded to the Library website.

Photo by MD Duran on Unsplash