Student grants and student loan debt: the case for a better debate

Drawing on recently published figures, posts here, here and here on this site provide data on the increased reliance on student loans to provide student support in Scotland, the general trends in the use of grants and how the principal means-tested grant, the Young Student Bursary, was already eroding prior to the large reductions applied to it this year.  Pulling these together, this post argues the case for much greater transparency and debate about these trends, and a debate on different terms from the one  which dominates in Scottish politics.

Student grants

The law does not require the annual rates for student grants to be announced or scrutinised in the Parliament.  None of the relevant government news releases and budget documents I have so far been able to find brought out how the Young Students Bursary, in particular, was being affected by decisions to reduce investment in grants.

For those not able to follow the decision-making process closely, the fact that YSB was being frozen from 2010-11 would therefore have been obscure, unless they went out of their way to do cross-year comparisons on the SAAS website (and indeed this was exactly how the 2013-14 reductions first came to light in the autumn of 2012).

It cannot have helped that many of the most articulate and confident members of Scottish society, at least when it comes to taking part in high-profile public debate, are unaffected by changes to the grant system,  while the families who most feel the effects of freezes and reductions in grant have little direct access to platforms in the media.

Student loan debt

A large increase in the use of loan is being embedded in the student support system without a clear explanation by the government to the wider community about the scale on which this is happening and its long-term effects, and without a debate about how that debt should be distributed between students.

The increased use of loans for living costs in Scotland has been presented by the Scottish Government as a pure public good,  strongly framed in terms of  increased support and  improvements in what is available – see for example this recent press release.  The headline figures quoted there do not distinguish between loans and grants: loans are the major component.

The NUS – focussed on hardship and spending power, and the maintenance of free tuition – has largely supported that point of view – see here, for example, although there are signs that it has a growing interest in the issue of grants for those at lower incomes. In its recent evidence on the Scottish Budget it notes: “While NUS Scotland has been extremely supportive of the Scottish Government’s simplification of student support, and the creation – as we had long called for – of a significantly improved settlement for the poorest students, we would be keen to see how [further] increases could be achieved through bursaries, as opposed to further loan increases. This would particularly be the case for the bottom two income brackets at least.”

There is almost certainly a higher awareness in Scotland of the debt faced by  English students, than of the fact that in a few years’ time Scottish students collectively are expected to incur around 3 times as much debt as before. The maximum English fee is a far more well-known figure in Scotland, than the £1000 to £2000 (per year of study) that young Scottish honours graduates who started from the most low-income homes will typically need to find from their future earnings, as a result of borrowing more to make up for reductions in means-tested grants. It is doubtful there is much awareness that, within the UK at least,  only in Scotland are  students from low-income homes  being asked to pay largest de facto “graduate tax” on their future earnings.

Getting a more progressive debate

The extra costs graduates from low-income homes will have to bear in future will be directly due to a failure to afford cash for grants the same protection as cash for tuition fee support at a time when budgets were under pressure. Loans deemed unacceptable for fees have been embraced as an unproblematic substitute for state support for living costs – and the scale and distribution of that growing debt remains largely obscure to the wider public.

This debate is sometimes treated as an unavoidable choice between prioritising tuition fees or grants. That’s an artificial dilemma we choose for ourselves.  If our aim is to contain individual debt within reasonable levels and distribute what debt cannot be avoided in a fair way, then state subsidies for tuition and for living cost support for the poorest should be treated as equally important. If one is protected, so should the other be.  If one has to take cuts, or be replaced in  part by loan, so should the other – and always in a way which looks at the the net effect of all changes on students from particular backgrounds.

The alternative, as the data already emerging shows, is for the government debt underpinning the higher education system – which looks here to stay –  to become increasingly visited on one section of the student population, within which students from the poorest homes will be over-represented.