Conservative policy on higher education

Conservatives will use proceeds from future privatisations, spectrum sales and the proceeds from selling off the student loan book to endow universities with massive one-off injections of government funding. As a result, they will be free to run their own financial affairs in the future.

As part of these proposals, Conservatives will restructure student loans, raising the thresholds for repayment to protect poorer graduates. Universities that are endowed by a future Conservative government will give a guarantee not to charge top-up fees, but in other ways they will enjoy the freedom of not being dependent on a dripfeed of government money.

Under our proposals a university would receive a large sum of money from the government (usually coming from the sale of an asset i.e. third generation licenses, student loan book). The university will then invest the money and fund itself through the income.

Our policy will mean that universities are set free from excessive control and interference.

Endowed universities will be free to:

• Determine their own salary structures for staff and the number of students they admit.

• Forge links with business and harness funding from the private sector without being penalised through a reduction in their grant.

• Run their own high-quality courses that reflect demand for skills from the public and private sector.

• Decide how many students they take on and ensure that they do not have too many students for the available resources.

• Grow and establish themselves as world leaders in academic excellence
Our policy will ensure that universities are free from political control. It also ensures that the uncertainty over funding for universities is removed.

Our proposals represent a better deal for graduates.

We will:

• Double the threshold at which graduates commence repayments of their loan from ?10,000 a year to ?20,000 a year.

• Offer graduates a fixed period for the repayment of loans of at least ten years, without pre-payment penalties.

• Make it a condition of endowment that universities are not allowed to charge top up fees to students.

• Ensure that graduates continue to deal with the student loans company rather than financial institutions.

• Provide an estimated ?3,500 a year tax allowance (worth around ?700 a year) for ten years, which will benefit graduates who are paying off restructured student loans; this allowance will operate against the basic rate of tax and will generally be sufficient to ensure that, after taking the tax-break into account, most graduates will be better off and no graduate will have to pay significantly more as a result of the changes we have proposed.