Where is the money going?: estimating the government cost of different university degrees

There have been several significant changes to the way higher education (HE) is funded in England over the past 20 years, moving from a heavily grant-based system to a heavily loan-based system. All students can borrow up to £9,250 per year to cover their fees and, on average, around £6,500 per year in maintenance loans to help with their living expenses. Because the loans are income contingent - meaning graduates only repay 9 per cent of their income above £25,000, with any outstanding debt written off after 30 years - the government can expect to write off around half of loans issued. As a result, the government is much less able to target the money it spends on HE and, instead, the subsidy mechanically accrues to those graduates with the lowest lifetime earnings. Although there are several very good reasons for the government to subsidise HE, this distribution of spending may not necessarily align with the students, or subjects, that the government wishes to prioritise. This work estimates how government spending is distributed by subject studied and university attended, based on grants and unrepaid student loans (including both tuition and maintenance loans).