Next year both tuition fees and maintenance loans will be linked to a measure of inflation called RPIX, which counts the cost of everything except mortgage interest costs.
It is currently set at 3.1%.
That will increase maintenance loan caps from £10,227 to £10,544 for students living outside of London, and from £13,348 to £13,762 in London.
Maintenance grants, which were non-repayable, were scrapped in 2016.
In their analysis of the changes, the Institute for Fiscal Studies (IFS) said the tuition fees increase would spare universities a further real-terms cut to their teaching resources.
But they urged the government to say whether fees would continue to increase after next year, “to provide some certainty to universities and prospective students alike”.
They also said that, under current repayment terms, around a quarter of the extended loans would eventually be written off and paid by the taxpayer.
Although students taking out the highest possible maintenance loans would be getting more money next year, the IFS said they would still be borrowing 9% less in real terms than they would have done in 2020/21.
The changes announced on Monday will affect students starting university next year, but also current students – although universities can have contracts that protect their students from fee hikes part-way through a course.
Students Shay and Zay, both in their first year studying product design at Manchester Metropolitan University, said higher fees could put off prospective students.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
