University is meant to be a pathway to better opportunities. A chance to gain qualifications, earn more over your lifetime, and break out of the circumstances you were born into. But as tuition fees rise, or even just stay high while the cost of living rises, an uncomfortable question becomes harder to ignore. Are we slowly pricing poorer people out of higher education? And if we are, it is not only unfair. It is also bad economics.
Why higher tuition fees hit poorer students harder
University costs more than just tuition. Students also have to cover rent, travel, food, textbooks, and sometimes even unpaid placements. For many people, the biggest challenge is not the tuition itself but the financial pressure of living while studying, especially when working full time is not realistic alongside lectures and exams. Even if someone says “it is just a loan”, uni still costs money in everyday life. This is why economists sometimes describe the burden of high tuition as regressive. A regressive burden means the cost hits low income people harder than high income people. Wealthier students may have parental support or savings, making the cost manageable. Students from lower income backgrounds often have to finance everything themselves, which increases debt, stress, and financial risk.
Higher education as an investment in human capital
Economists often describe education as an investment in human capital. Human capital simply means the skills, qualifications, and knowledge that make you more productive at work. In general, higher productivity tends to lead to higher wages, which is why university is often described as “worth it”. In economic terms, going to university is like saying: I am spending money now to earn more money later. But when tuition fees are high, the upfront cost of that investment increases. For students from poorer backgrounds, the difficulty is not only whether uni pays off in the long run, but whether they can afford to take the gamble in the first place.
Why student loans do not fully solve the issue
A common argument is that students do not pay tuition upfront, so high fees should not reduce participation. But this ignores how people make decisions under uncertainty. A loan is still a risk. This links to an economic concept called risk aversion. Risk aversion means preferring something certain over something uncertain. If you come from a working class background, you might worry about what happens if the investment does not pay off. What if you do not get a good job after? What if you drop out? What if the debt feels overwhelming? Even if university increases earnings on average, not everyone can afford to gamble based on averages when their financial situation is already tight. This is one reason higher fees can discourage poorer students from applying, even when loans exist.
Opportunity cost: the cost people forget about
Another key economic concept is opportunity cost. Opportunity cost means what you give up by choosing one option instead of another. For university, the opportunity cost is the income you could have earned by working full time instead of studying. This matters hugely for students from lower income households. If you could earn £20,000 or more a year by working, university becomes a bigger sacrifice, especially if your family needs financial support. So even if tuition is covered by a loan, the total economic cost of university is still much higher for poorer students once lost earnings are included.
What happens to the economy if poorer students stop going to university?
This is where tuition fees stop being a personal issue and become a national economic issue. If high fees discourage poorer students from going to university, the impacts spread across society.
Lower social mobility
If only wealthier students can afford higher education, high paying careers become harder to access. This creates intergenerational inequality, meaning inequality is passed down from parents to children. Being born poor becomes a stronger predictor of your future income, regardless of talent. That is not only socially damaging, it also wastes potential.
Misallocation of talent
Economists sometimes call this misallocation of talent. This means the economy is not using its people efficiently because opportunities depend on wealth rather than ability. If someone who could have become a doctor, engineer, teacher, or economist never gets the chance because university feels unaffordable, society loses out. This reduces innovation, weakens productivity, and slows economic growth.
Lower productivity growth
Productivity means how much output the economy produces per hour of work. Productivity growth is one of the biggest drivers of long term living standards. Education can improve productivity by creating a more skilled workforce. If high fees reduce university participation, especially among capable low income students, the economy loses human capital. That can hold back productivity growth and reduce future wages across the country.
Rising inequality creates wider economic problems
There is also economic debate about how inequality affects growth. High inequality can reduce consumer spending, because poorer households have less disposable income. It can create instability, reduce trust in institutions, and discourage investment in education and skills. So if higher tuition fees widen inequality, the damage goes beyond education.
So what is the solution?
Education creates benefits not just for the individual but for society. Economists describe these wider benefits as positive externalities. A positive externality is when an action benefits other people, not just the person doing it. Education benefits society through higher tax revenue, lower unemployment, better health outcomes, stronger innovation, and higher productivity growth. Because the market price of university does not reflect these broader benefits, there is a strong economic argument for public support, such as lower tuition fees, grants for low income students, stronger maintenance support, or loan reform that reduces fear and uncertainty.
Final thought: education should not become a rich person’s privilege
If rising tuition fees discourage poorer students from going to university, higher education stops being a ladder and becomes a filter. It stops selecting the most capable and starts selecting the most financially secure. When talent is blocked by money, society becomes less fair and the economy becomes less productive. That is not just a social issue. It is an economic one.
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