University Alliance propose a Graduate Contribution Scheme that would allow more students to go to university

A new ‘Graduate Contribution Scheme’ that would enable the Government to fund a greater number of students has been proposed by the University Alliance.

The scheme has won the backing of students and business leaders.  It would reform the current ‘top up fees’ system and would reduce the up front costs to Government by bringing in private up front funding through the sale of bonds.

The proposals are based on a successful model already running in Hungary.  It would simplify the current financial scheme of grants and maintenance loans into one system.  Graduates would be able to secure funding for fees and living costs from a new Graduate Contribution Service that would replace the Student Loans Company. The funding for these would not come from Government but be backed by private investment through the sale of bonds.

Repayments would be made on an income contingent basis following the completion of the course – once a graduate reaches a minimum earnings threshold.   The proposal addresses two fundamental weaknesses of the current system. It reduces the costs to Government of the current loans system – freeing up taxpayers money to invest in a higher number of students. It also replaces the current complicated system that is far easier to understand while still ensuring that those even on the lowest incomes are able to study for a degree.

The Alliance argues that the ‘maximum graduate contribution’ to cover course fees could be set by the University, and the Government would still be free to cap this if it chose to do so.

Libby Aston, Director of University Alliance representing 23 major universities at the heart of the sector with over 27% of all UK students, said:

“Given the Liberal Democrats objection to any increase in fees, proposals for a new Graduate Contribution Scheme might prove to be a useful basis on which to make progress on conversations about university funding. Our proposals are affordable to Government in any economic climate. By reducing the cost to Government, more qualified students would be able to go to university.

“Our proposals for a Graduate Contribution Scheme for England would ensure there is no up-front cost for students. The amount graduates would contribute each month would relate to their earnings so that only those who benefit from their degree would contribute something back.”


Notes to Editors

University Alliance represents 23 major, dynamic, business-like universities at the heart of the sector that deliver world-leading research with impact and are actively business-focussed.

Through evidence-based policy and research, the Alliance aims to improve policymaking in higher education to the benefit of the UK economy and society. Alliance universities educate 27% of all UK students and achieve some of the highest graduate-level employment rates. These universities offer a research informed, academic learning environment and a culture of entrepreneurialism, equipping graduates for the 21st century.

Alliance universities:

Aberystwyth University, Bournemouth University, University of Bradford, De Montfort University, University of Glamorgan, Glasgow Caledonian University, University of Gloucestershire, University of Hertfordshire, University of Huddersfield, University of Lincoln, Liverpool John Moores University, Manchester Metropolitan University, Northumbria University, Nottingham Trent University, Open University, Oxford Brookes University, University of Plymouth, University of Portsmouth, University of Salford, Sheffield Hallam University, University of Wales Institute, Cardiff, University of Wales, Newport, University of the West of England.

For further information, please contact: Tim Field, University Alliance on 0203 178 7491 or email

Further reading