Universities were owed £21 million in unpaid tuition fees after the second year of student contributions, according to a survey by vice-chancellors.
By July 2000, last year's students owed £17 million in unpaid fees - 5.9 per cent of the £290 million due to universities through students' private contributions. This is on top of £4 million still owed by students from the first year of fee-paying, 1998-99.
However, the Committee of Vice-Chancellors and Principals is optimistic that the system is working and unpaid fees are being kept to a minimum. In 1998-99, despite early signs of much higher debt, more than 97 per cent of student contributions, £150 million of the £156 million owed, were paid. The CVCP said this debt could reduce further and predicted a similar payment rate for 1999-2000.
The CVCP estimated the £17 million still outstanding for 1999-2000 would be reduced to £9 million by this week, just 3 per cent of the money due. It also predicted this £9 million would be gradually whittled down.
CVCP chief executive Baroness Diana Warwick said the findings showed the system was working effectively, but she urged all students to pay up.
"All fees are means tested and over 40 per cent of students pay no fees at all," she said. "Those who pay fees, according to the criteria, should be able to pay, and we urge them to do so. They will personally benefit from their higher education throughout their careers."
Tony Bruce, director of policy development for the CVCP, said the vice-chancellors were happy with the results, but the CVCP was not being complacent. "It is a reasonable position, but we have planned various follow-up actions. Some money is lost to the system for good. There is some leakage, but it is a relatively small amount and within expectations."
He said the CVCP would commission research into the "perceptions and consequences of private debt on the recruitment and retention of students" and would issue further guidance on managing the system to universities.
The THES revealed last week that Mr Bruce acknowledged there were problems with the administration of the system. Universities reported problems with the means-testing of students, carried out by local authorities to determine whether they are exempt or partially exempt from paying fees.
University finance directors said problems with assessments, and a large number of reassessments, mean some institutions cannot plan ahead because they are unsure of how much they are owed.
"Reassessment is a problem," said Mr Bruce. "Some local authorities are quicker at processing than others and we need to keep that very much under review. But, within the premises of the scheme, the outcome is not unreasonable. We are monitoring the situation and liaising with the Department for Education and Employment. Where there is evidence of underperformance by our partners, we will take action."
He also said some universities could improve their collection methods.