FEES, FUNDING AND YOUR FUTURE Graham Galbraith, Vice Chancellor, November 2017

Our ambition: TO provide a world-class education to all students who can benefit from the opportunity To do this we must Invest properly in your education and future Resist a government cap on the number of students Avoid your career choices being distorted by money/finance Ensure that, like taxation, student funding is progressive Student funding must be fair and perceived to be fair How universities are funded is a societal decision, not universities’ If you want change, engage and vote

CHANGE TO STUDENT FUNDING IS NECESSARY “we will undertake a major review of university funding and student financing” Theresa May, Oct 2017 Issues I lobby government and MPs on:  Increase to the thresh-hold of repayment Re-introduction of maintenance grants Reduction in the interest rate on the loan I believe that a wholesale review is needed

THE FEE LEVEL IS NO GUIDE TO WHAT YOU PAY What we get to teach you? £9,250 per student per year Plus an additional amount from the government for high cost subjects e.g. £1,500 per student for engineering What you pay for university? 9% of your salary over £25,000pa For up to 30 years Anything else from general taxation

Immediate effect of fee changes What we get to teach you What you pay for university (per week) £25,000pa £30,000pa £35,000pa £40,000pa £9,250 per student £0 £9 £17 £26 £7,500 per student £6,000 per student

University funding Alternative systems Graduates pays 55%, state pays 45% - current system with repayment threshold at £25,000 per annum (IFS) Graduates pay 69%, state pays 31% - current system with repayment threshold at £21,000 per annum (IFS) “[The new] reforms will increase the long-run government contribution to the cost of providing higher education by around £2 billion per year (raising the repayment threshold costs £2.3 billion and freezing fees saves £0.3 billion) This increases the RAB charge on student loans from 31% to 45% for students starting in 2017. This is entirely due to the reduced graduate repayments as a result of the higher repayment threshold (freezing fees slightly reduces the RAB).”?(Higher Education finance reform: Raising the repayment threshold to £25,000 and freezing the fee cap at £9,250 - https://www.ifs.org.uk/publications/9964)

University funding Current system - progressive Graduating in 2018 (2015 start, three year degree) [Calculated on the basis of Money Saving Experts ‘Student finance calculator’ (see https://www.moneysavingexpert.com/students/student-finance-calculator]. Maintenance loan of £0 has been assumed. Examples of professions with >£29K salaries taken from here: http://www.telegraph.co.uk/education/universityeducation/student-life/12104502/How-to-get-a-well-paid-graduate-job-in-2016.html. £27K (UP Mech Eng – salary figure from 2015/16) – repay 88% of fee (7900/9000 = 88%). £7900 is the figure to which the fee must drop if someone with starting salary of £27K were to repay all of their fee. £21.5K (nurse 2015/6 salary - general) – repay 48% (4300/9000 = 48%) £18K (UP Creative Writing 2015/6 - https://www.savethestudent.org/student-jobs/whats-the-expected-salary-for-your-degree.html#table) – repay 11% (1000/9000 = 11%) Eg, Creative Writing Eg, Nursing Eg, Mechanical Eg, Consulting, Law Engineering (City), Banking 2018 graduate starting salary

Effects of fee changes Individual profile Fees at £6,000pa Graduating in 2018 with a starting salary of £23,000pa Has no effect on what you pay overall Reduces taxpayer contribution to your education Graduating in 2018 with a starting salary of £40,000pa Reduces what you pay overall by about 40% Source: Moneysaving Expert Student Finance Calculator (http://www.studentfinancecalc.com) If fees are reduced, we get less to spend on you and the majority of you pay the same Lower fees would simply reduce the taxpayer contribution to your education

Investing in you, for you Principles that underpin our spending Employ the best teachers and staff Invest in resources so you can be successful Employability Career-enhancing activities Real-life learning ASK, ASDAC & wellbeing Learning Support tutors Online resources e.g. Lynda.com Education environment IT Estate

Income and Expenditure 2016/17 Headline figures: Income (£m) Expenditure (£m) Teaching £192.3m £195.7m Other £41.4m £31.2m Total £233.7m £226.9m Notes: Figures are pending external audit ‘Other’ income and expenditure - Research, Innovation, Residences, Catering.

UNIVERSITIES ARE CHARITIES – THEY DON’T MAKE PROFITS BUT THEY DO NEED SURPLUSES Since 2004/05 the average surplus has been 2.6% of income per year A total of £59 million over the period Surpluses fund our investments – previous surpluses have funded: Healthcare Simulation Centre New Theatre Royal Dental Academy Library refurbishment Dennis Sharma Building Students’ Union Eldon Building Refurbishments of our teaching facilities and upgrades of our IT In 2016/17 alone the University invested £14.7 million in land and buildings (Future Technology Centre etc.).

Are we getting it right? NO.1 TOP 100 96.5% The challenge: GRADUATES WORKING or in FURTHER STUDY (DLHE 2016) in the UK for BOOSTING GRADUATE SALARIES NEW UNIVERSITIES Times Higher Education Young University Rankings 2017 The challenge: We will have to make year-on-year savings of £4.5 million. Transform our systems and ways of working e.g. improved marketing, MyPort, student record system, nursing, apprenticeships.

Thank you