HALLAM University plans to set a tuition fee of £8,500 a year from 2012 – just £500 short of the maximum permitted.
The news came on Tuesday, a week after Sheffield University announced that it would charge the top rate of £9,000.
A Hallam spokeswoman blamed the rise on a Government funding gap, saying the new fee would compensate for drastic cuts in both capital support and teaching grants.
“We have carefully considered our fee and have set it at a level that will deliver a high quality education and allow us to invest for the future,” she said.
Sheffield Hallam is currently the fifth most popular university in the country in terms of applications. It has also been rated second in the country for adding value to students’ experience of university.
However, the high level of fees will fuel fears that fewer students will enrol for courses in coming years – hitting Sheffield’s economy if students opt to stay at home in a bid to cut the cost of a degree.
Hallam University hopes to limit any fall-out by investing £20m over three years on student recruitment and retention, broadening access and teaching and learning support.
It also plans to spend £9m a year on fee waivers and bursaries, designed to help students from less affluent backgrounds.
More funds will be spent on facilities and measures designed to boost graduate employment – including investment in academic staff, more personal support and a customised employability package for each student.
The university has strong links with industry and is one of the UK’s largest providers of sandwich courses, which include a year’s placement, giving students practical experience of the world of work before they graduate.
As a concession, fees will be waived on the placement year and any field trips which form a mandatory part of the course for all students who enrol after September 2012.
Staff point out that they already exceed targets for widening participation. But the city’s two universities are joining forces to develop a joint outreach programme focusing on raising aspirations among school students who could benefit from higher education.
The spokeswoman added: “Sheffield Hallam understands that the changes to fees mean that choosing university is a serious decision, but we believe that it is a choice that will pay financial, social and personal dividends throughout each student’s life.”
MPs voted in December to allow fees for UK undergraduates to rise from £3,350 a year to £6,000 – and £9,000 in “exceptional cases.”
Subject to ratification by the Office for Fair Access, two out of three universities now plan to charge maximum fees for some or all courses.