Open University fee increase

[fivemack]

I don't understand how the Open University can justify its fee increase.

From the annual report, at the moment it gets about 40% of its income from fees and the rest from the state. With the fees it was charging in 2009-10, it had a surplus equal to about 15% of its fee income.

I get the impression that the OU is one of David Cameron's pets, and I haven't seen any statements that its state funding is being substantially reduced.

Increasing the fees is likely to reduce the number of students, but presumably they've modelled this and expect to end up with a higher total income; and a lot of the OU's costs are proportional to the number of students, so the surplus would go up enormously.

Comments

[hsenag.livejournal.com]

Surely their state funding will be reduced in the same way as that of other universities?

[jiggery-pokery.livejournal.com]

Can't help feeling there's a lot of "because they think they can get away with it" going on, unfortunately; it is sad that this makes the OU one of the much less bad offenders.

[rmc28]

The majority (80% is the figure I see thrown around) of government funding of undergraduate tuition is being moved from HEFCE grants to the provision of loans.

They are losing at least 80% of that 60% from the state. They have to recoup it somehow. I'm delighted that they have decided to do so at so much lower a cost than every other university in the UK.

[arnhem.livejournal.com]

Agreed (although I don't believe the possibly-80% cut applies to the research block grant, only to the teaching one; the OU does have a small-ish research block grant, so not all of the 60% is affected (most of it is, though)).

The numbers appear to be here: http://www.hefce.ac.uk/finance/recurrent/2011/notify/july/summary.xls.

[vyvyan.livejournal.com]

As I understand it, two main justifications: the state funding is being substantially reduced, and loans will soon (after 2012) become available to part-time students to help them pay the increased fees. You may note that these OU fee increases do not apply in Scotland, Wales or Northern Ireland since the same funding changes are not being imposed there.

(See e.g. http://www8.open.ac.uk/study/explained/fees-2012/new-to-study )