Following tuition fee rises in 2012, the Treasury is set to reduce its spending on education by £1.17 billion. However, a report published earlier this week by think tank Million+ estimates that the cost of implementing the rise in fees could be as high as £7 billion: over six times more than the Treasury’s expected savings which were to be found by measures such as the removal of government teaching grants to universities.

Million+ pointed to reduced graduate earnings, lower tax revenues from graduates who do find employment and a higher write-off of student loans -perhaps increasing to as much as 40 per cent - as some of the causes of the rise in government expenditure as a result of the fee hike.

There will also be significant impact on inflation as a result of the sudden 19 per cent rise in education costs which came into force in October 2012. The think tank notes that the Retail Price Index (RPI) is expected to increase by 0.22 percentage points in each of the first three years of the increased fees. Million+ estimates that this alone could cost the government £655 million in additional interest payments.

Students beginning university courses will pay on average more than £8,500 in tuition fees. However, figures published by the Office for Fair Access, the government’s higher education watchdog, say that a third of English higher education institutions will charge the maximum of £9,000 as standard for a degree. Official figures also show that three quarters of such institutions are charging the maximum fee for at least one of their undergraduate course.

These figures have emerged despite claims by ministers that universities would only be allowed to charge over £6,000 and up to £9,000 in “exceptional circumstances.” Universities minister David Willetts made these comments in 2011, saying he hoped “to see a wide range of fees being set by universities.”

Th Million+ report is sceptical about the utility of the new fee regime, stating that “the jury has to be out as to whether the government’s reforms are the most cost effective way of funding higher education.”

Even stronger reaction to the news has come from CUSU, with Access Officer Vicky Hudson criticising the short sightedness of the government’s policy. “It is ridiculous that the government’s plans to reduce the deficit by increasing tuition fees were not thoroughly considered and that they have ended up with an outcome that is economically illiterate and damaging to young people’s opportunities.”

Hudson highlights CUSU’s activism in “opposing the government’s education funding cuts and the decision to increase tuition fees” but laments that “our warnings fell on deaf ears.”

Acknowledging that “Cambridge University’s admission figures may not have appeared to go down”, Hudson also stresses that “our access initiatives and generous bursaries (which are funded by the university itself and not the government) are having a positive impact.”

CUSU ends by emphasising their pledge to “continue our outreach work and demand that the government does more to fix its mistakes.”