The current student finance system was put in place by the Conservative-Lib Dem coalition after Parliament controversially approved plans in 2011 to allow universities to charge up to £9,000.
Ministers insist the system, in which no-one has to pay upfront and all outstanding debts are written off after 30 years, has not put off students from poorer backgrounds from going to university. They point to figures suggesting the proportion of students from disadvantaged backgrounds entering higher education rose from 13.6% in 2009 to 19.5% in 2016 and that the level of university support for disadvantaged students has more than doubled in the past eight years to £833.5m. The government has warned that lowering tuition fees could potentially result in the closure of some universities and the re-imposition of controls on student numbers. It has also said taxes could go up to fill the funding gap, with the large number of people who did not enjoy a university education paying for others to do so in future. Monday's debate also provided a chance for MPs to raise related issues such as the pay of vice-chancellors, which has been in the spotlight amid a row over the £468,000 salary of Bath's Prof Dame Glynis Breakwell.
Commentary: Governments often seek to encourage consumption of certain goods for spillover benefits. Subsidizing tuition fees has been a major topic to maximize the positive externality that education generates since education is considered a merit good, whose consumption benefits third parties in the society. According to the article, Parliament in the United Kingdom discussed tuition fees to “cut by nearly 70% to £3,000” aiming to raise in consumption. The British government should proceed this policy to promote the positive effect on society, however effects on stakeholders and disadvantages of costs for the government are necessary to consider.