Student living cost support in England and Scotland: policies coming closer, scrutiny worlds apart

With the abolition of student grants announced earlier this month, in 2016 England will join Scotland in having a student funding system which expects the poorest students to borrow the most.  Wales and Northern Ireland are still, for now at least, holding out for the use of  student grant at a sufficient level to ensure  poorer students are not expected to borrow more than their better off  peers (and in the case of Wales, substantially less).

England is also coming into line with Scotland with the planned freezing of the loan threshold.  This blog has repeatedly made the point that the lower loan repayment threshold in Scotland has a particualrly large effect on lower earning graduates.   The new English threshold is in effect the current one for Scotland.  Using IFS figures, Andrew McGettigan points out that moving to this new, lower threshold “increases the costs of undergraduate study by a quarter or more” for those in the bottom 70% of earners, compared to the original plans for a higher threshold in England – while the abolition of grants in fact has very little impact on that group, for the reason discussed below.

Two large differences remain between England and Scotland.

The first, of course, is that total debt will be even higher south of the border. That has the counter-intuitive effect that the latest grant cuts will have no real impact on the majority of poorer students: the IFS estimates that up to two-thirds of those at low incomes will see no difference in what they pay back, because they were already unlikely to pay their whole debt before it was written off (after 30 years).  Those most affected will be the graduates from poorer homes who go on to earn relatively well: it’s an almost perfectly designed  de facto social mobility tax. The Scottish grant cuts by contrast added debt to a lower pre-existing level borrowing (around half the English level) so they are more likely to translate into real extra payments for poorer students,  across all but the lowest earners. In both cases, the policy change has increased costs at low incomes on paper: in Scotland,  the total debt resulting is still lower, but the changes will have a much larger impact in practice.  It’s a paradoxical effect.

The second difference is in the wildly different levels of scrutiny – and, before that, government transparency – in each case.  The comparison with reaction to the changes announced in England reinforces how poorly the government policy Scotland in this area has been scrutinised and held to account, and how much freer the government in Scotland has been to avoid involving parliament or even stating outright what the effect of its decisions will be. The absence of independent voices  – such as think tanks and interest groups – willing to speak up for those affected by grant cuts in Scotland  is also stark, as is the lack of media coverage of domestic policy within Scotland. BBC viewers in Scotland, for example, have been informed about grant cuts which haven’t yet happened in England and won’t affect Scottish students, but not of grant cuts which have affected every student in receipt of a grant in Scotland since 2013.

The differences, and similarities, in the changes in the two countries are summarised in the table below.

[Update: it’s been pointed out that the analysis below ignores the continuing existence of grants provided direct to students by institutions in England, which now account for a substantial amount of such payments.  It’s a good point. There’s not yet been any suggestion that these locally-managed payments will cease and if they do continue, then spending on all types of grant in England could in fact remain close to Scottish levels, even after the national scheme for English students is would down.  However,  these grants are not consistently available, making them hard to include in any comparison, and OFFA has questioned their effectiveness, so their long term future may be uncertain.]