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

July 30, 2015

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.]

Scotland England
Timing From August 2013 From August 2016
Students affected Changes were applied to all students, including those already in system Changes will affect new starts only, other than changes to loan repayment threshold (see below).










Means-tested grants substantially reduced, with cuts of up to 100%, depending on students’ income and whether young or mature. Overall reduction of around 40%. Means-tested grants will be entirely abolished.
Maximum reduced from £2,640 to £1,750.For those below max, gradually tapered system replaced with step-change reductions, with students getting £1,000 or £500, depending on income.From 2015-16, entitlement in middle band rises to £1,125 and max entitlement rises to £1,875. Maximum of £3,387 in 2015-16. For those below max, system is currently tapered, with entitlements falling gradually as income rises.
Spending on means-tested grants fell by 40% following changes.Spending fell from £89m in 2012-13 to £53m in 2013-14. Spending likely to fall by something like 30%/55%/85%/95% over the 4 year period from 2016-17. Spending should be de minimis by 2020.At £1.6bn, spending on grants in England is currently around three times higher than in Scotland, pro rata size. It will be at a similar level in both countries by 2017-18, before falling further in England.
Thresholds Threshold for max support was reduced from £19,300 to £16,999 (rising back to £18,999 from August 2015).Upper threshold was left unchanged at £33,999. Threshold for maximum support will be maintained in 2016-17 at £25,000.Upper threshold for grant currently around £42,000: will no longer be relevant.  Not yet clear how loan entitlements will reduce at  incomes above £25,000.
Loan (entitlements) Loan replaced lost grant Loan will replace lost grant
Further loan was made available to increase total living cost support in real terms.Minimum loan increased from just under £1,000 to £4,500 (now £4,750). Further loan will be made available to increase total living cost support in real terms.Minimum loan previously £3,610: no suggestion as yet that this will rise.
Total value of support (grant plus loan) Maximum support (away from home) increased by 13.6% .In 2015-16, maximum, whether living at home or away and regardless of place of study, will be £7,625.Falls to £6,875 at £19,000; £6,250 at £24,000; £4,750 at £34,000.Figures for 2016-17 not yet available. Maximum support (away from home) increased by  13.1%.In 2016-17,  maximum if living away will be £8,200. Max will be £10,702 for those in London.  Living at home max will be £6,904.Applies at incomes up to £25,000. Not yet clear what figures will apply above that.
Debt distribution Regressive: highest debt now expected at lowest incomes. Regressive: highest debt will now be expected at lowest incomes.
Total debt 4-year degree debt at lowest incomes of £28,000 (mature) or £24,000 (young student), including interest. Expected 3-year degree debt of around £53,000 at lowest incomes (young and mature).
Loan (repayment rules) No change was made to rules for the repayment threshold in 2013.The threshold is £17,335 in 2015-16, and will continue to rise in line with earnings.It should reach the cash value of the current threshold used in England in around five or six years. Loan repayment threshold, currently £21,000, to be frozen for five years, rather than rising in line with average earnings as originally promised.
Students affected All. UK govt consulting on whether to apply threshold freeze only to new entrants or to all those who have taken out a loan since 2012: seems likely to be applied to all.
Likelihood borrowing will actually be repaid Relatively high, due to smaller overall total and relatively low repayment threshold. Relatively low, largely due to scale of sums involved, although freezing the repayment threshold will increase how much is repaid (by around £6,000). Freeze means that by around 2021/22, repayment threshold will no longer be lower in Scotland.
Form of announcement Press release on changes to student support from 2013-14 issued 22 August 2012 making no reference to grant cuts or reduction in threshold for max support, and concentrating on increase in total combined max value of loan/grant support. No announcement of student support changes to the Scottish Parliament. SG has yet to officially acknowledge grants were reduced in 2013 (only Ministerial comment to parliament has been to suggest there had been no cuts to grants, though this was formally corrected later). Changes to loans and grants announced to parliament in budget on 8 July, followed by a detailed ministerial written statement on 9 July.
Parliament/opposition parties Opposition debate June 2013 and various opposition PQs: criticism from Conservatives, LibDems and Labour (not Greens). No parliamentary approval required for changes.  Early day motion opposing grant cuts, with signatories so far from Labour, Lib Dems, SDLP, DUP and SNP.  Greens have started a petition on 38 Degrees. Regulations will need to be approved by parliament later in year.
NUS Very positive, addressing only the general increase in living cost support, telling members “Take some time today to celebrate and reflect on what a huge win this is, one that will fundamentally change the lives of so many of our members. … Today is a great day for the student movement in Scotland, so take some time to savour it.” Very critical.
BBC Has never reported grant cuts in Scotland; repeated terms of SG news release in August 2012. Did report grant increase of £125 announced in May 2015. Various pieces on planned grants cuts and loan repayment increase.
Press No reporting of grant cuts until  opposition identified the plans in October 2012 (picked up  by Scotsman only). More coverage since summer 2013, prompted by work by this author. Extensive coverage of grant cuts immediately after announcement and of trails of announcement in preceding month.
Independent think tanks/commissions No analysis or reaction to changes in Scotland in almost three years since they came to light. Briefing note from IFS on impact of changes in England published on 21 July 2015.Comment on effect of grant cuts in report from Independent Commission on Fees on 30 July 2015.
Other Report commissioned from this author (a freelance researcher) as part of ESRC-funded project in early 2014, after self-publishing. Mainly so far on the Critical Education site, run by freelance research Dr Andrew McGettigan.

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