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University fees in England are set to top £10,000 this parliament, as education secretary Bridget Phillipson plans to keep fee rises linked to inflation for the next three years.

The funding settlement comes in the wake of the government’s three-year public spending review next year, during which universities are expected to make reforms in return for rising fees, according to government officials.

One person has been notified PhillipsonThe thinking goes that while no final decision has been made, the “direction of travel” is clear.

And November, Phillipson Office has partnered the first rise in university tuition fees since 2017, raising the £9,250 fee for domestic students to £9,535 for the 2025-26 academic year – an increase of £285.

Linking fees to inflation over the next three years could push tuition costs above £10,000. The Office for Budget Responsibility predicts annual inflation above 2 percent through 2028.

Vivienne Stern, chief executive of Universities UK, the sector’s lobby group, said institutions would welcome credible annual fee increases after a decade when payments were in effect frozen, which save the financial problems for the universities as the real term value of the fees is destroyed.

“Making the assumption that undergraduate fees will rise with inflation every year, and not just once in a blue moon, is essential to creating that stability and leading to better financial management of universities.” ,” he said.

A government official said any fee increase would be linked to “significant reforms that drive value for money”, including improved access for students from disadvantaged backgrounds and closer ties. between universities and colleges of education.

Phillipson also wants to raise the quality of teaching and universities should support more innovation, as part of Labour’s ambition to boost growth rates.

“We will also see if the regulator has the right role and power to manage value for money,” said one person briefed on Phillipson’s thinking.

The Department of Education said the government had taken “difficult decisions” to put universities on a firm footing and that the Office for Students, the independent regulator, was “rightly focusing its efforts it to monitor the financial sustainability”.

It added: “While the institutions are autonomous, we are committed to restoring universities as engines of opportunity, growth and aspiration.”

The UUK analysis found that raising fees would provide £1.4bn in extra funding to the sector by 2029-30, while creating an additional long-term cost to government of £400bn to fund additional provision. on loan.

University leaders said the inflation-linked increase in fees would help stabilize the sector, after recent growth in the recruitment of international students stopped faltering last year.

The Conservative government’s recent decision to ban postgraduate masters students from bringing family members, combined with Nigeria’s currency crisis, has led to international numbers falling by more than 30 percent in some institutions.

In November, the Office for Students Warned that a £3.4bn reduction in net income across the sector means almost three-quarters of universities will be in deficit in the academic year starting in September 2025.

Calculations the Russell Group of research-intensive universities estimated that, before this year’s fee hike, universities were making an annual “loss” of £2,500 on each domestic student.

However, analysts have warned that the recent fee increase has already been offset by the increase in employers’ national insurance contributions announced in the Budget, which will start in April.

The Institute for Fiscal Studies think-tank calculates that the latest tuition fee rises will raise an extra £390mn a year for universities, set against increased NIC costs of £372mn a year, leaving net profit of just £18mn.

“It’s not like enough,” said Nick Hillman, director of the Higher Education Policy Institute think-tank. The sector requires above inflation investment similar to the “inflation plus 1 percent” formula agreed in October for social housing rents, he added.

Data visualization by Amy Borrett