Labour’s plans to scrap university fees ‘will cost taxpayers £8bn’
Labour's plans to scrap university tuition fees, ending student loans, will cost the taxpayer £8 billion a leading economic think tank has warned.
The Institute for Fiscal Studies (IFS) said replacing fees with teaching grants, together with Labour's commitment to bring back maintenance grants for poorer students, would increase the upfront government commitment to higher education by £1 billion.
However, they would lead to a £12.7 billion increase in the deficit – of which £11 billion would come from scrapping fees – because loans made to students do not add to the deficit.
In the longer run, the IFS estimates the impact on the public finances to be £8 billion as a “significant proportion” of student loans are not expected to be repaid.