University charges higher fees to avoid 'second rate' tag - Telegraph.co.uk

"They have created a 'luxury-goods' market, whereby a higher price is designed to increase desirability rather than quality, and which contains no disincentive for universities to reduce prices and plenty of incentives for universities to charge more."

But the Coalition has hit back at the claims, pointing out that many universities are charging much less than the top amount. Last week it emerged that the majority of further education colleges, which often run degree courses accredited by nearby universities, are planning average fees below £6,000.

Under the Coalition's higher education plans, almost all direct state funding for university teaching is abolished for new students from 2012.

Institutions can charge up to £9,000 a year to plug the gap – almost three times the current amount.

On Tuesday, universities must tell the Government's Office for Fair Access whether they intend to charge more than £6,000.

So far, 58 universities have publicly declared fee levels.

Of those, two-thirds want to impose a flat-rate of £9,000, although poor students will be entitled to generous discounts. A further six are charging the maximum amount for some courses.

Teesside – which gained university status in 1992 was named university of the year by Times Higher Education magazine in 2009 – said it would charge £8,500 for full-time degrees and £6,000 for HNDs or two-year foundation degrees.

Prof Henderson said the move was designed to "reflect the value" of a Teesside degree. He insisted it would enable the university to provide more grants, scholarships and loans, making "higher education much more accessible and affordable than it is at the present time".

But speaking later, he suggested it was also driven by the need to maintain appearances.

"A Teesside University degree is very valuable and we wanted to make sure our price was affordable and accessible to students," he said.

"There has been a lot of feedback against fees, but our students have been checking we are not charging the bottom of the spectrum because they don't want it to be seen as second rate."

Last week, Prof Simon Gaskell, principal of Queen Mary, University of London, said some institutions were charging £9,000-a-year to avoid being seen as substandard – not on the basis of cost.

He said he did not "find it appealing to base a choice of fees on some conception of status".