The administration of Prime Minister Keir Starmer in the United Kingdom will increase university tuition fees for the first time in eight years, according to a report from The Telegraph on Monday.

Education Secretary Bridget Phillipson is set to announce the rise, which will align tuition fees with the Retail Price Index inflation.

The fee increase is expected to take effect in September 2025, impacting A-level students currently applying to universities.

Tuition fees have remained frozen at £9,250 since 2017. It is uncertain which month’s inflation figures Labour will use for this adjustment, but if they match the current rate of 2.7 percent, fees could rise to approximately £9,500 next year.

Earlier reports suggested that the Government might raise tuition fees to £10,500 over the next five years. However, The Telegraph indicates that ministers are hesitant to commit to any increases beyond the next academic year as they contemplate a comprehensive reform of the current system.

This decision comes amid growing concerns that many institutions are facing a financial crisis, with 40 percent of English universities anticipating a deficit this year.

The Coalition government had previously tripled tuition fees to £9,000 in 2012, which were then increased to £9,250 in 2017. These fees have remained unchanged despite significant inflation over the past few years.

The Russell Group of elite universities has argued that the cap on tuition fees has resulted in a loss of approximately £4,000 per UK student.

University finances have also been adversely affected by a significant decline in lucrative international student enrollments following a Conservative crackdown on dependent visas.

Home Office data revealed a 16 percent drop in visa applications from July to September compared to the same period in 2023.

International students, who typically pay three to four times the fees of domestic students, had been vital to the sector’s financial health. The sudden decline in their numbers has removed a critical support system for universities and intensified calls for immediate government intervention.

Pressure Over Maintenance Grants

Sources familiar with the discussions told The Telegraph that there was hope for a modest increase in tuition fees to be announced in last week’s Budget, reflecting Rachel Reeves’ recognition of the seriousness of the situation.

However, the Chancellor did not reveal any new funding for the higher education sector during her first Budget presentation.

The Telegraph understands that she would have faced considerable pressure to link an interim tuition fee increase with the reinstatement of maintenance grants, which would significantly burden the Treasury.

Previous Labour modeling indicated that reinstating the grants at an enhanced rate of £4,009 could cost up to £2.3 billion annually, as reported by The Telegraph last year.

By announcing a tuition fee increase outside of a fiscal event, the Government is expected to gain time to finalize its overhaul of the university funding model.

Ms. Phillipson is anticipated to announce the inflation-linked fee increase as a “first step” towards a comprehensive reform of the current system.

This approach could pave the way for a potential return of maintenance grants, a form of means-tested support that was eliminated by Lord Cameron in 2016.

Additionally, the Government is reportedly considering reforms to the tuition fee repayment model, amid concerns that rising student debt disproportionately affects less-advantaged graduates.

Ministers have been engaging with senior leaders in the university sector in recent months in response to growing demands for immediate support.

Vivienne Stern, the chief executive of Universities UK (UUK), told The Telegraph in September that the Government must step in to “stabilise the ship”, as she called for fees to rise in line with inflation from 2025/26 as a “necessary” step.

She said: “Just get on and index-link the fee – this cannot be allowed to continue. That’s the bare minimum – you know, you can’t go on like this.”

UUK’s proposals suggest that if investment for university teaching had kept up with inflation, funding per student would now be in the region of £12,000 to £13,000.

The Department for Education is yet to respond to enquiry.