UK Politics
£450m a Year to Cut EU Students’ Fees as British Graduates Pay £400m More
Burnham is ready to spend up to £450m a year cutting EU students’ university fees, while a Labour loan freeze takes £400m more from British graduates.
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Should British taxpayers fund cheaper university fees for EU students?
News | By Matt, Editor
Up to £450 million a year. That is what Andy Burnham’s government is ready to spend so students from France, Spain and Germany can study at British universities for the price British teenagers pay. Meanwhile, a Labour freeze on student loan thresholds will take an extra £400 million a year out of the pay packets of English graduates.
The fee giveaway is on the table for the UK-EU summit in Brussels on 20 November. The Telegraph reported that the Prime Minister is considering cutting EU students’ fees from as much as £38,000 a year to as little as £9,535, the domestic rate. The Guardian was told the government would pay universities for the lost income, up to £450m a year in the dearest Treasury scenario.
On Friday the Tories put the two numbers side by side. Shadow Education Secretary Laura Trott told the Express: “Politics is about priorities, and English students are bottom of the list for Andy Burnham.”
Have your sayTap to commentKey facts
- EU students now pay international fees, up to £38,000 a year. Under the plan being weighed, many would pay the home rate of £9,535 instead (Telegraph).
- Taxpayers would cover the gap: up to £450m a year in the most expensive Treasury scenario (Guardian). Analyst Mark Corver told the i Paper it would start at about £150m and rise to £450m once three year-groups were in.
- About 7,600 EU students started courses this year on international fees, roughly £20,000 a year more than British students on average (i Paper).
- Plan 2 student loan repayment threshold: frozen at £29,385 for three years from April 2027. The OBR says that raises about £400m a year in the medium term (Times Higher Education).
- No 10’s price for the fee deal: access to the EU’s protectionist “Made in Europe” industrial scheme (Guardian source).
- At least six EU member states want a firm UK pledge on fees by the 20 November summit (Guardian, 5 November).
Who pays
Here is how the money moves. An EU student who would have paid £38,000 pays £9,535. The university is short. The Treasury tops it up. That top-up comes from the same taxpayers whose children leave university with five-figure debts and repay 9% of everything they earn above the threshold.
And that threshold is the second half of the story. Graduates on Plan 2 loans, which covers English students who started between 2012 and 2022, repay once they earn more than £29,385. The House of Commons Library confirms the government will freeze that level for three years from April 2027 rather than let it rise with earnings. As pay rises, more of every graduate’s salary gets caught. The OBR’s estimate is about £400m a year extra for the Treasury.
Labour knows it is unpopular. Answering a written question this week, education minister Josh MacAlister told MPs the government “inherited a student loan system that is unfair and in need of reform” but had to think of “the wider public finances”. John Healey’s Budget last month left the freeze in place. Martin Lewis has called it “immoral and a breach of natural justice”. The Welsh Government has refused to copy it for Welsh borrowers.
What Brussels wants
Cheaper fees for European students have been one of the EU’s hardest demands in the reset talks. According to the Guardian, senior EU diplomats met on Wednesday and at least six member states insisted on a clear UK commitment by summit day. Some think the prized food and drink deal should not come into force without it. The European Commission has suggested parking fees for six months so the summit isn’t derailed.
A source close to the talks put the UK position bluntly: “We are willing to give the Europeans what they want on fees, but we will have to get something significant in return. The biggest prize we are pushing for right now is access to Made in Europe.”
So British universities would be paid by British taxpayers to discount degrees for EU nationals, in return for British firms being allowed into a Brussels purchasing club. The i Paper reports a halfway option where EU students would pay what a course costs to teach, about £12,300 a year on average. That would still be a big cut on international fees, and still more help than British graduates are getting on repayments.
Burnham’s defence
The Prime Minister says the reset is about growth, and claims the trade deal could add 0.4% to the economy. “I have the opportunity to add to UK growth,” he said this week. “I think people in Britain would expect me to take that with both hands. If that can get growth, if that can help our farmers, if that can remove red tape from British businesses, I think most people would expect me to go to that summit and negotiate the best deal that I can.”
Some in government have told the Financial Times the £450m figure is “far too high”. Mark Corver of Campus Numerics told the i Paper the bill could be more than halved if EU students were charged around £23,000 a year rather than the home rate. Ministers have not said which option they will take to Brussels.
Part of a bigger package
Fees are one line in a summit list that keeps growing. This site has already reported the draft deal’s “financial contribution” for poorer EU countries, the youth scheme letting Europeans up to 34 live here for three years and the EU demand that Britain drop plans to deport more European criminals. Reform’s Zia Yusuf says a leaked draft now shows the UK will “not proceed” with early removals to the EU.
Sir Bill Cash told GB News the package was “a re-subjugation to European lawmakers”. The Daily Mail has reported youth mobility numbers creeping towards 80,000 a year. Ministers insist nothing is final until 20 November.
Our view
Labour says the student loan freeze is about tough choices and the public finances. Then it finds up to £450m a year to make degrees cheaper for Europeans, as a bargaining chip for a Brussels scheme most voters have never heard of. You cannot plead poverty to a young nurse in Leeds repaying 9% above £29,385 and then write a cheque to cut fees for a student from Lyon. If there is spare money in the education budget, British graduates were first in the queue. Burnham should take the fees offer off the table before he lands in Brussels.
Should British taxpayers fund cheaper university fees for EU students? Vote in our poll below.
Sources
- The Telegraph, 1 November 2026: Burnham considers £450m plan; fees from £38,000 to £9,535
- The Guardian, 1 November 2026: up to £450m a year; Made in Europe condition; source quote
- The Guardian, 5 November 2026: six member states want firm pledge; six-month delay idea
- Daily Express, 6 November 2026: Laura Trott quote; £400m graduate repayments; Burnham growth quote; Sir Bill Cash
- The i Paper, 4 November 2026: £12,300 compromise; 7,600 EU starters; Mark Corver costings; FT “far too high”
- Daily Mail, 2 November 2026: youth mobility towards 80,000 a year
- Times Higher Education: OBR £400m a year from Plan 2 threshold freeze
- House of Commons Library: Plan 2 threshold £29,385, frozen three years from April 2027
- UK Parliament written answer 38498, 4 November 2026: Josh MacAlister
- Photo: Andy Burnham with Spanish PM Pedro Sánchez, New York, 22 September 2026. Simon Dawson / No 10 Downing Street, Open Government Licence v3.0 (cropped)
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