Student funding and an Oxford education

March 2011

Dear Colleagues,

I am writing to share with you some important information and further thoughts about the future of our University, in particular the financing of its widely-admired undergraduate education. My reason for writing now is the recent deliberations of Council on future tuition charges and new arrangements for student financial support to be provided by the collegiate University.

These matters were discussed extensively in the recent Congregation meeting and also considered in detail in committees and groups across the collegiate University. That process has been invaluable in providing context and content for Council.


Last December, Parliament approved a new ceiling of £9,000 a year on undergraduate tuition charges at English universities from 2012/13. That figure was chosen by the Coalition Government in the wake of a review of higher education funding and student finance conducted by Lord Browne of Madingley. In his review, Lord Browne identified as a priority the need for major new investment if the UK was to maintain its prestigious position in global higher education, a position built in no small part on outstanding universities like Oxford.

In our own submission to the Browne Review, the University underscored the urgent case for such investment and identified three major funding streams: Oxford’s own resources (including philanthropic giving), student contributions paid after graduation, and public investment. The first recognises Oxford’s own commitment and responsibilities; the latter two reflect our clear understanding that good universities bring both significant private benefit to the individual and major public benefit to wider society.

It is deeply regrettable, as the University has made clear, that the Government is reducing drastically direct public investment in university teaching − and that in a country which already spends less in percentage terms than the OECD average on higher education. The impact of the deep government cuts to the student teaching grant is a major concern in university departments across the country, particularly in “unprotected” subject areas like the humanities.

At Oxford, we have calculated that a new undergraduate tuition charge of close to £8,000 a year would be required simply to make up for lost public investment. So any idea that the new funding regime heralds a major cash bonanza is very wide of the mark.

We also calculate the cost of educating an undergraduate at Oxford to be in the region of £16,000 a year, about double what we receive from government funding and student fees. The reality is that the collegiate University’s own resources provide (and will continue to provide) a generous subsidy worth thousands of pounds per student per year for the education of each undergraduate. It is that generosity which underpins, for example, the intensely-focussed tutorial teaching in our close-knit college communities, and the outstanding libraries and collections that our students have at their disposal.  

Excellence is not cheap and the funding gap is wide. This means that in reaching difficult judgements about how to deal with immediate challenges, Oxford also has to be attentive to longer-term ones. None can be more important, surely, than sustaining the excellence of our teaching and research. That is our passion and purpose. Without that, there is no Oxford as the world understands and appreciates it.

Moreover, we must continue to meet that challenge in a way which guarantees that the most talented students, regardless of personal background or financial circumstance, are able to benefit from the transformational opportunities we offer. That is a commitment our generation has a duty to pass on to the next.

Council decisions

In summary, Council has approved a sliding scale of tuition charges, from £3,500 to £9,000 a year, depending on household income, and payable only after graduation. The discounts would be applied through a system of targeted waivers, which would mean first-year students from the lowest-income backgrounds needing to borrow only about the same amount as at present. In subsequent years of their course, the level of deferred payment would rise to £6,000 a year.

Students from other low-income groups would also receive waivers, reducing their deferred annual charge to either £7,000 or £8,000, depending on household income. Overall, waivers would be available to about one in six undergraduates, based on Oxford’s current student intake.

As at present no UK student at Oxford would have to pay any tuition charges upfront. Loan repayments only begin after graduation and when earning over £21,000.

In addition, Council has agreed to expand our bursary provision, with more support offered to the lowest-income students. The scheme, which assists students with living costs, is designed to safeguard the principle that no student should need to take a job during term-time. 

The total value of the package of waivers and bursaries is more than £12 million a year, nearly double what we spend at present.

In addition, we propose to increase our outreach spend to approximately £3.4m a year, while up to £750,000 in extra investment will go towards student services, such as counselling, careers advice and disability support. Details of this spending are still to be finalised and will be subject to the usual budgetary approvals process.

Further illustrative material about the new funding arrangements is appended to this letter. Additional information will be published in the Gazette on Thursday.

In terms of the University’s overall funding, Oxford would receive about £10 million a year in real extra income.[1] Approximately £7 million of this additional income would be spent on new student financial support and additional outreach and access activity.

This illustrates the seriousness of our commitment to ensuring that Oxford’s outstanding education is affordable to all. But it also has implications of course for the amount of new funding available for the longer-term sustainability of that teaching, especially when the extra funding represents a little more than one percent of annual income. The University will face a continuing challenge in trying to bridge the funding gap without any sacrifice in quality. I will return to this later.

Removing barriers

I have already touched upon the great importance the collegiate University attaches to removing any barriers that can stand in the way of students coming to Oxford. Although the new arrangements on tuition charges approved by Parliament preserve the welcome principle that no UK student has to pay upfront, there is a widely-articulated concern about debt aversion, especially among potential students from poorer backgrounds. Council’s proposal for generous and targeted waivers is designed to help overcome such fears. Living costs, on the other hand, do have to be met at the time and, while daily life at Oxford is no more expensive for students than in most places, we are determined, through the new bursary scheme, to keep it demonstrably affordable.

Perceived barriers are not only financial and that is why the collegiate University remains deeply committed to ensuring Oxford is accessible in the widest sense. We currently spend £2.6 million a year on access and outreach initiatives and that figure is planned to rise to approximately £3.4 million. Last year alone, we ran 1,500 separate events, including the UNIQ summer schools programme, which was a resounding success in its inaugural year and will expand.

Our overarching aim in all this work is to widen access to Oxford from groups that are currently under-represented − whether they are from particular schools and colleges, neighbourhoods, people from disadvantaged backgrounds, or people with disabilities. This goal will be at the heart of proposals the University is now developing for submission to the Office for Fair Access (OFFA) in the coming weeks. All universities seeking to charge over £6,000 in tuition charges have to conclude a new agreement with OFFA to replace the one already in force. Once finalised, the agreements will be public documents. OFFA has signalled that it expects us to devote around 35 percent of additional income above £6,000 to student support and outreach, a figure that Oxford will exceed by a very wide margin.

The broader picture

Vitally important though undergraduate students and teaching are to Oxford’s core mission, they are not of course the sum of a great university with a global reputation for research and innovation, and a graduate body drawn from over 140 countries. Yes, Oxford is about teaching, but it is also about research. It is a British institution, but also an international one. The interconnectedness and the rich diversity of our institution and culture are vital aspects of its character and strength. We forget that at our peril. 

It is hardly surprising that the sharp challenge of sustainability in undergraduate teaching has already caused distortions elsewhere in the complex life of our academy. Coping strategies based on internal cross-subsidies carry negative effects; for example in the underfunding of Oxford’s infrastructure and our competitive position relative to our North American peers, in the scale of our endowment, and in our support for postgraduates. If many of the potential postgraduates of the future will be carrying substantially increased loans from their years of undergraduate study, then the decision to continue their studies at a graduate level may become more difficult. We need to find the resources to ensure that outstanding undergraduates can plan and work towards a graduate career here at Oxford.

All of which brings me back to the need for continued large-scale investment if Oxford is to remain, as it must, one of the best universities in the world. I have already described where we are, regrettably, on direct public investment, and the thinking on student contributions and support. The third funding stream the University identified in its submission to the Browne Review was philanthropy. This is an area where, amid all the current uncertainty, I believe Oxford has cause for hope and undoubtedly for gratitude. By any standards, the Oxford Thinking Campaign is proving a major success, passing the major milestone of £1 billion in record time and in the teeth of an international financial crisis. We need now to build on that success in order to help sustain the work of the collegiate University in a changed funding landscape. And in that new environment, it seems to me that support for students − at both undergraduate and graduate level − and for our tutorial system, must play a prominent part.

I apologise for writing at such length, but I am sure you need no persuading that these are important issues, requiring care and attention. To help in assessing the next stages in the process, a Congregation discussion is expected to take place in early Trinity Term. There is much on which we will need to continue to reflect together but, given the talent at its disposal, I have no doubt that Oxford will succeed in shaping a future worthy of its name.

Best wishes,

Andrew Hamilton

[1] The figure of £10m takes into account the cut in HEFCE capital funding of c. £4m, which affects the central University but not the colleges.

Further illustrative material

Tuition charges for 2012 entry

Household income

Tuition charge for first year of study

Tuition charge for subsequent years

£0 - £16,000



£16,001 - £20,000



£20,001 - £25,000



£25,001 -



Bursary support for 2012 entry

Household income

Bursary for first year of study

Bursary for subsequent years

£0 - £16,000



£16,001 - £20,000



£20,001 - £25,000



£25,001 - £30,000



£30,001 - £35,000



£35,001 - £40,000



£40,001 - £42,600



  Oxford’s investment in student support


Current expenditure

Proposed expenditure for 2012/13

Additional expenditure above current levels

Maintenance bursaries



+ £290K

Tuition charge waivers



+ £5.16m

Subtotal for financial support



+ £5.45m

Access and outreach work



+ £750K

Subtotal for financial support and outreach




On-course student support, including careers advice, counselling, and provision for students with disabilities



+ £750K




+ £6.95m

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