By Elizabeth Piper and Paul Sandle
LONDON (Reuters) - British universities must offer students value for money, Prime Minister Theresa May said on Monday, launching a review that could reduce fees and restore grants in a bid to entice younger voters who helped punish her party at an election last year.
In a speech designed to show her programme for Britain is more than just its departure from the European Union, May said she wanted not only to look at the funding of education but also at ways of raising the importance of technical studies to prepare the country for life after Brexit in the high-tech age.
Her pitch was also aimed at the opposition Labour Party, which, some pollsters say, won over young voters by promising to get rid of student fees and which threaten to force the Conservatives out of several London councils in local elections in May.
"We now have one of the most expensive systems of university tuition in the world," she said at a college in the northern English city of Derby, adding that she shared the concerns of students and their carers.
"The review will now look at the whole question of how students and graduates contribute to the cost of their studies," she said, dodging a question whether taxpayers would have to pay more towards the university education of students.
Labour's education policy adviser, Angela Rayner, described the speech as an admission by May "that her government got it wrong".
"This long-winded review is an unnecessary waste of time. Labour will abolish tuition fees, bring back maintenance grants and provide free, lifelong education in Further Education colleges," Rayner said in a statement.
A RESET?
May's predecessor David Cameron, a fellow Conservative, tripled the cost of tuition for students from England and Wales to 9,000 pounds a year, higher than the fees other EU countries charge their citizens.
In 2016, the government also phased out all grants to help poorer students with living costs, replacing them with loans.
May's Conservatives have long defended their approach, arguing that requiring students to pay helps fund more places so more people can study, and puts more of the burden of the cost of higher education on those who benefit most from it.
Students do not have to make payments on their loans unless they earn above a minimum threshold, although they continue to accrue interest. Unpaid balances are wiped out after 30 years.
But the system is unpopular with younger voters, angry about being the first British generation to start their careers often with tens of thousands of pounds of debt.
Education Secretary Damian Hinds said on Sunday that students could be charged variable tuition rates depending on the economic value of degrees in the subjects they study.
A parliamentary committee has also said the government should cut the interest rate it charges on student loans, which are pegged at 3 percentage points above retail price inflation. The current rate of 6.1 percent is higher than most banks charge for mortgages or unsecured personal loans.
May would not be drawn on the review's possible conclusions, but said she wanted the work to find ways to offer an education to all, offer choice and competition in the sector, deliver the skills the economy needed and to offer value for money.
"Eighteen months ago when I became prime minister I spoke of my desire to make Britain a great meritocracy," she said.
"Today, our ambition for the Britain we will build outside the EU must be just as great."
(additional reporting by David Milliken,; Editing by Richard Balmforth)