First, universities’ financial planning will be thrown into uncertainty, affecting their forward decisions on the degrees they provide. It will become increasingly difficult to ensure continuity of quality and the maintenance of standards when income cannot be predicted.
Second, students may begin to choose degrees on the basis of the earnings capacity a degree will give them. Only two types of student will be relaxed about their choice: those with high parental resources behind them, and those choosing degrees (maybe a leading finance or business degree?) who may believe that such a degree will guarantee them large salaries in the City, though this is now less guaranteed than before.
Third, over the longer-term, the range of degrees most universities offer will be narrowed. If university finance is largely (for some institutions exclusively) driven by student fee income, and student decisions narrowly driven by calculations of future earnings, how easy will it be in 10 years time to propose a new degree in philosophy, art history, or a language not on the government’s list of ‘strategically important’ languages? Will the result really be more choice?