This is what your tuition fees actually get spent on

Many universities are now revealing exactly where your tuition fees get spent – and it's far from just the cost of teaching you.

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With tuition now costing as much as £9,250 per year for many students, it's only natural to wonder what that money is spent on. And, surprise, surprise, it doesn't all go to teaching! Universities have many costs, including management, advertisement, university buildings, and more.

While it differs per university, we've taken a look at some of them to give you a general idea of where tuition fees actually get spent.

How do universities spend tuition fees?

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Data from HESA shows that staff costs are the biggest expense for universities, on average taking up around half of UK universities' spending. However, this covers all staff including administration, HR, finance, maintenance etc.

When we take a closer look at the data, an average of around 27% of UK universities' expenditure is spent on academic teaching staff.

From the data we found available online, it's common for universities to spend between 25% and 50% of the funds generated from each student's £9,250 annual tuition fees on the cost of teaching.

The remaining funds were spent on other necessary expenses. This includes things like buildings, technology and libraries, university administration, welfare support such as mental health services, and spending on the students' union.

How do universities differ in their tuition fee spending?

To take two examples, below we have included a breakdown of the average spending of tuition fees for the 2022/23 academic year from the University of Leicester and the University of Sussex. Though the category headings each university uses differ slightly, there are some obvious similarities:

University of Leicester tuition fee expenditure

• Academic and teaching – 44%
• Student support – 16%
• IT and library – 15%
• Running the university – 12%
• Running the campus – 10%
• Scholarships – 4%.

University of Sussex tuition fee expenditure

• Academic departments – 25%
• Operating and maintaining campus – 17%
• Central University running costs – 16%
• Library and IT – 14%
• Future investment – 12%
• Student wellbeing – 8%
• Widening access to university – 8%.

Both universities spend similar proportions of tuition fees on the running of the university (12% and 16%), which includes costs for finance, human resources and alumni relations.

Library and IT services, which include books, student e-mail accounts, WiFi and IT support, also take up similar percentages (15% and 14%) of both universities' spending.

The money put into the running and maintenance of the campus, which includes building maintenance, estate services and the cost of utilities, differs slightly between the two universities (10% and 17%). However, this could be down to specific building work that has had to be carried out during that academic year.

The biggest difference in expenditure between the two universities is the amount spent on academic departments and teaching. At the University of Leicester, 44% of your tuition fee goes towards the cost of academic staff, course equipment, and staff-related costs, whereas at the University of Sussex, only 25% is spent on academic departments.

The University of Leicester also allocates nearly double the amount compared to the University of Sussex to student support (15% rather than 8%), including counselling and welfare services, the Student Union and careers services.

Are degrees good value?

Where previously it was difficult to find information on what universities spent your tuition fees on, it's great to see so many universities now being open about their expenditure.

However, it doesn't take away the growing concerns over the value of degrees in the UK compared to their cost.

MPs have previously said that many young people are being sold a "false dream" and the debt graduates leave higher education with outweighs the benefits they get from studying for a degree.

What's more, according to the Office for National Statistics, more than 33% of recent graduates in the UK (excluding London) were working in non-graduate roles in 2022.

Why do universities charge for education?

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UK universities have varying levels of dependency on the income from tuition fees. The difference can be huge.

For many universities, tuition fees make up around 50% of their income. For Oxford University, tuition fees only made up 17% of their income in the 2022/23 academic year. At the other end of the scale, at Nottingham Trent University the figure stood at 82%.

This is why, for many of these institutions, there is overwhelming pressure to recruit new students every year. Previously, an unnamed university had to be given a £1m bailout emergency loan by the Office for Students to avoid running out of money and being unable to pay its bills.

While the money was repaid, and the university regained financial stability, the incident exemplifies the challenges all universities face with reliance on student intake and fees – both of which can fluctuate from year to year.

The Office for Students has noted that in 2022–23, 93 higher education providers reported a deficit (where there is not enough income to cover expenditure).

A report on education spending in England from the Institute of Fiscal Studies states:

[...] the cap on tuition fees is now 24% lower in real terms than it was in 2012–13. Teaching resources are now only slightly higher in real terms than they were in 2011–12 (£9,400) before the substantial increase in tuition fees [...] The nominal freeze in the level of fees is set to continue for another year, adding financial pressure on universities.

What will happen to university funding?

Today, the future of higher education funding in the UK is shrouded in uncertainty. Most people agree that something needs to be done, but we're not sure what that will be.

With tuition fees making up the largest proportion of the income of most universities, a reduction in tuition fees is unfortunately looking extremely unlikely. In fact, some in the university sector have recently called for an increase in tuition fees in England.

University chiefs argue that if universities have to lessen the income they receive from fees, they will likely have to reduce the support they provide to students. For example, there might be bigger classes but fewer lectures for students.

With the decline in the value of tuition fees from UK students, many universities are relying heavily on the fees they can charge international students. However, with this varying from year to year, this reliance could pose a risk, leaving universities in more financial difficulty.

And, of course, fees aren't the only problem. At Save the Student, we also believe that Maintenance Loans are a pressing concern.

For context, in our latest National Student Money Survey, the average student spent £1,104 per month. Yet, for English students in 2023/24, the average Maintenance Loan was equivalent to around £600 – highlighting the shortfall of loans.

We have long campaigned for increased Maintenance Loans and will continue to do so until they are big enough for students to live on.

Ever wondered how much each lecture really costs you? Use our calculator to find out how much your course costs per hour.