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FMQs on grants and loans October 2015: the annotated version

October 29, 2015

The question of student grants and debt was covered at length at FMQs today: official report here.

Below is an annotated transcript of the exchanges, with comments on the various claims made.   In brief, the FM held to the  now well-established and presumably very conscious SG decision not to acknowledge the fact of grant reductions in 2013-14.

The government lines that were used rested heavily on a number of claims that are open to challenge, as explained in my comments below, with the FM providing an exceptionally clear example of classic political number play.  In particular, the repeated use of final debt figures for 2014 leavers to represent the debt facing Scottish students is very open to misunderstanding. It would be interesting know how far Ministers are aware of what this figure actually represents.

What’s below is a long read, but worth providing in full to bring out the extent to which almost all the factual claims made in defence of the current student funding arrangements by the FM are vulnerable to some sort of criticism.  I have also commented on a couple of opposition points.

Post script: What’s not mentioned can be revealing too. The FM made no reference to the idea of the “minimum income guarantee”, usually a central element of the government script.   As detailed elsewhere, one-third of the young students targeted by the MIG policy have not achieved it, because they have not taken up the high level of borrowing required, while actual numbers getting MIG are half what the SG originally predicted.  Whether awareness of that explains the absence of any reference to the MIG in such a long series of exchanges is unknowable, but it’s possible.


Kezia Dugdale:

I thank the First Minister for that very welcome and full reply.

I turn to student finance. Figures that have been published this week by the Student Awards Agency for Scotland show that, under the Scottish National Party Government, the average student bursary or grant has been cut by almost 30 per cent, and that it is the poorest students who are suffering. Students from deprived backgrounds are being forced to take on an even greater debt burden. Students who have the potential to get on in life and to do great things are being held back because their parents do not have a lot of money. The gap between the richest and the rest has grown on the Scottish National Party’s watch.

Comment: Rising student debt has affected higher income as well as poorer students, so that the gap between those who actually borrow at incomes over £34,000 and borrowers at lower incomes has narrowed. However, the figures also strongly suggest that students from the highest income households are far more likely to borrow nothing, compared to students from low and middle income households.    So it is reasonable to assume that the “the richest” have been largely unaffected by recent changes and the debt gap between them and the majority of the less well-off has grown.  However, no figures are available which can demonstrate that specific point directly.

I know that the First Minister will talk about tuition fees in answer to my next question—it is her standard response whenever we talk about student debt and grants—but I would like her to answer this question very specifically. Can she tell us the total value of student debt in Scotland?

The First Minister:

I am not going to talk about tuition fees; I am going to talk about student support, because that is what Kezia Dugdale has asked me about, and it is an important question.

Our students have

“the best support package in the whole of the UK”.

Those are not my words; they are the words of the National Union of Students Scotland.

Comment: The framing/attribution to NUS is very careful and likely to be deliberate.  These words were used by then NUS President Robin Parker on 22 August 2012 (echoing the headline in the SG news release of the same day: the comparison seems to have originated with the SG).  The line has however been absent from more recent NUS comments, such as its response to the current parliamentary inquiry into student support.  Also, when it is not directly quoting NUS, the SG now qualifies the “best in UK”  line with “for students who live at home” (as in the Cabinet Secretary’s interview here).  That’s important, because the claim was originally founded on Scotland offering the most upfront help with living costs: but as the graph at Figure 1 here shows, total living cost support for low and middle income students away from home is generally more generous in England or Wales (both of which also use more grant to achieve this).  There was around a month, from August to September 2012, when Scotland did have the highest announced maximum package of grant plus loan of any UK jurisdiction: however,  by September 2012 the Welsh Government had announced increases for students away from home which overtook the Scottish figures.

The number of students who are receiving support is higher than ever before,

Comment: Only once fees and loans are included.  The numbers receiving non-repayable grants have fallen. These are the numbers receiving any kind of bursary or grant in 2005-06/2010-11/2014-15:   58,750/68,960(after introduction of the independent student bursary)/52,315. Table A8 here. Within that, the number receiving a means-tested bursary are 37,930/55,490(ISB again)/49,295.  The numbers on means-tested support specifically aimed at young students were 35,965/34,140/32,310.  Aside from the introduction of ISB, it’s a clear story of declining numbers: and even ISB claimants fell last year.

and the average support that is being provided is higher than it has ever been.

Comment: Again, this is when increased loans are included.

When we look at the average student loan debt, we find that the figure for Scotland is significant lower than the figure for any other part of the United Kingdom. In England, the figure is £21,180, in Wales it is £19,010, in Northern Ireland it is £18,160 and in Scotland it is £9,440. That is the reality.

Comment: £9,440 was the reality for students who left HE in 2014, who spent only one year under the new funding system. That average includes HNC/D students who only studied for one or two years, who bring down the figure (by about one-quarter, I’ve estimated elsewhere).  It also ignores the variation round the average, which means that in  Scotland, alone in the UK, average borrowing is higher at lower incomes. Annual average borrowing is now £5,270 (A1 in the stats), making a final debt nearer £20,000 more plausible for current degree students.  That’s pretty similar to the position in the other devolved nations and once variation round the average is taken into account, the poorest students in Scotland are in fact likely to be borrowing more than those in Wales and NI.  England is a different story and indeed the figure here of £21,180 shows how out of date these numbers are. If comparison with debt in England is the benchmark, the SG could now take debt well over £30,000 and still claim criticism was unfounded.

Kezia Dugdale may or may not be aware that the Scottish Government has also taken the step of increasing the bursary element of the student support package in the current academic year.

Comment:  After reductions in support in 2013-14 close to £1000 in many cases, and as much as £1640 in some, followed by a freeze in 2014-15, the SG has raised  bursaries for those below £24,000 by £125.

In the next academic year, we will raise the income threshold for eligibility for the maximum bursary.

Comment:  In 2013-14, the threshold for maximum support was reduced from £19,300 to £16,999.  Next year the cut will be almost restored (in cash terms) to £18,999.

Those changes were described by NUS Scotland in the following terms: “great news for Scottish students … the Scottish Government is to be congratulated for doing more to tackle student poverty.”

Comment: There’s been a strong contrast in NUS’s  involvement with debates about grant north and south of the border. In England, it is threatening legal action over the decision to remove grants there. I have discussed some of the factors which may explain NUS Scotland’s position on the 2013 changes here.  NUS Scotland issued this statement after FMQs today, which has a markedly different tone from the 2012 press notice,  highlighting the need to increase grants, although, in a parallel with the SG, it glosses over that the first £40m of any investment in grants will be making up for cuts which NUS by implication enthusiastically welcomed, under its 2012 leadership.

That is what the Scottish Government is doing, and we will continue to take action to ensure that all those who want to go into further or higher education can do so regardless of their background or circumstances.

Kezia Dugdale:

There was a lot of gloss in that answer, but the reality is that support for the poorest students in Scotland is the worst in all the four nations of the United Kingdom. I asked the First Minister specifically about student debt. I think that, on this occasion, she knew the answer but was too ashamed to say it out loud. The value of student debt in Scotland stands at £2.7 billion—or, as Alex Salmond might put it, £2,700 million.

Comment:  That figure is the amount included in the accounts, after adjusting for what is likely to be collected.  The actual face value of unpaid student loan debt is £3.5bn.

The value of student debt in Scotland is more than the combined cost of the new Forth replacement crossing and the Queen Elizabeth university hospital in Glasgow. In fact, the value of the accumulated debt of students in Scotland is now the Government’s single biggest financial asset.

The student debt monster that the SNP once promised to dump is now a debt mountain. Did the First Minister have any intention of keeping that promise?

The First Minister:

Kezia Dugdale cannot escape the fact that the average student loan debt is significantly lower in Scotland than it is anywhere else in the UK, or the fact that Scotland-domiciled students—here I will talk about tuition fees—do not have to pay the fees of up to £27,000 that are charged for tuition elsewhere in the UK.

Comment: The “up to” is important  here.  Northern Irish students in Northern Ireland and Welsh students going anywhere in the UK are limited to fee debt of just over £3,800 a year in each case.  The variety of UK fee regimes is generally not acknowledged by Scottish Ministers.

That is a real saving that does not become a debt in Scotland, as it does in other parts of the UK. Currently, if the least well-off students in England and Scotland took up the maximum amount of student loan that is available to them during the term of their degree, the English students would accumulate about £12,000 more in debt than the Scottish students. That is the reality.

Comment: This figure appears to take account of the additional local fee waivers and bursaries in England. It shows how at low incomes the gap with England is rather less than the £27,000 for fees, often quoted.  Thus, the group who benefit most from reduced debt compared to England are those at higher incomes. Equally interesting is the absence  of any attempt to extend the comparison to Wales or NI.  Both of those come out around £3,000 lower than Scotland on this sort of comparison.  The existence of alternative policy making in the other devolved nations remains problematic for the SG, whenever it wants to draw comparisons.

We have the best student support package in the UK, and the average student debt is less in Scotland than it is in any other part of the UK. We are also taking steps to increase the bursary element of the total student support package, which stands in sharp contrast to what the UK Government is currently doing. Not content with imposing tuition fees, the Chancellor of the Exchequer announced in his budget speech that the UK Government is going to abolish bursaries altogether and move entirely to loan funding. That is something that the Scottish Government will not do.

Comment: It has taken the proposal to abolish grant in England for the Scottish Government to make its first positive public commitment since 2013 to preserving what remains of grants in Scotland.  The grants now being committed to are currently worth £1,875 up to £16,999, £1,125 to £23,999 and £500 up to £33,999 (for young students: they are £875 up to £16,999 only, for mature students).   The gap between some, arguably all, of these figures and zero is not very substantial.  Indeed, if the locally-run bursary system, however flawed, is retained at its current level, English spending on targeted non-repayable support for poorer students could still be worth half or more that in Scotland, pro rata, even after national grants are abolished. Nothing similar exists on the same scale in Scotland.

Kezia Dugdale:

That is all from a First Minister who told students that their debt would be zero. We were told by the First Minister to judge her on her record. So here it is. The reality is that, today, it is easier to be poor and get to university in England, even under the Tories, than it is to do so in Scotland under the SNP. [Interruption.] I heard cries of “Shameful.” Yes, that is shameful.

The First Minister promised to abolish student debt; instead, it has increased. She promised to expand grants; instead, they have been cut. Is not it the case that, despite all the promises and all the moments of self-congratulation, the SNP Government is letting down Scotland’s poorest students

The First Minister:

As I think I said in both my previous answers, in this academic year we have increased the bursary element of the student support package. [Interruption.]

The Presiding Officer (Tricia Marwick):


The First Minister:

It was that which led NUS Scotland to say that the Scottish Government should be

“congratulated for doing more to tackle student poverty.”

Since 2006, there has been a 50 per cent increase in applications to universities from the 20 per cent most deprived areas in our country. Young people are more likely to participate in higher education by the time they are 30 than was the case in 2006.

Comment: According to UCAS, there has been a 63% increase in applications from POLAR2 Q1 (its deprivation measure) in Scotland since 2006 (Annex A here).  The equivalent figure for England is 72%.  The HEIPR for Scotland has risen slightly since 2006 (from 53.2% Table E here to 55% Table M here).  However, the % participation rate has fallen slightly for Scottish HEIs (to 32.1%), while rising for HE in FE colleges (to 21.0%): Table E again – a further small percentage is accounted for by those going out of Scotland . These disaggregated figures only run to 2012-13 – the split by sector is no longer published.  In England, the HEIPR has risen from 42.2% to 46.6% over the same period.

On the specific issue of student debt, let me repeat some of the figures, because those are the figures that matter to people and students across Scotland. In Scotland, the average student loan debt is £9,440; in England, it is £21,180. In Wales, which was being governed by a Labour Administration the last time I looked, the average student loan debt is £19,010—almost double the figure in Scotland.

Comment: the extent to which the SG relies on the £9,440 figure is very problematic, in terms of providing a clear and accurate picture of the position under the system it introduced in 2013.  Looking at some of the reaction to the debate on-line, it’s clear that the relative debt position of Scottish students compared to other parts of the UK is a very persuasive point for some, so describing this accurately matters very much.

Everybody knows that we live in tough financial times, and tough choices always have to be made, but we will continue to ensure that we provide good support for our students so that more of our students from the most deprived parts of our country can take the opportunity to go to university. We will continue to get on with the job and we will, as usual, leave Labour to moan and whinge about it, regardless of what we do, from the sidelines.

Ruth Davidson:

We have just heard a series of quite serious exchanges regarding funding and access to universities, but I did not hear in any of those exchanges a credible alternative plan for how we will fund bursaries for poorer students and ensure the wider access that we all say that we want. So here is one. Under our plans, we would ask all graduates who have enjoyed their university education to pay back a contribution once they get a decent job. [Interruption.]

The Presiding Officer:


Ruth Davidson:

That money could then be used to help to increase bursaries for poorer students who, under the current scheme, cannot even get a foot through the door. That plan is sensible and moderate and would help those who are most in need. What reason, other than an ideological one, would the First Minister have for not considering that plan?

The First Minister:

I give credit to Ruth Davidson. She is putting forward her policy, which is to support the introduction of tuition fees, and she is absolutely entitled to put that before the Scottish people at the election in a few months’ time to allow them to cast their verdict on it. However, we have an honest disagreement. I believe in free education. I benefited from that as a young person and I believe that I have no right to take it away from any other young person today.

Comment: It is not clear whether the FM also received a grant.

We will have that debate in the months to come.

Students who graduate and benefit from a university education pay that back through taxation. I believe that that is what should happen—not that we should have tuition fees, a graduate tax or whatever terminology Ruth Davidson wants to use.

Comment: In effect, student loans operate like a form of graduate tax, bring repayable relative to income. It is not clear on what basis the FM draws a distinction  between such loans, now issued in Scotland at the rate of £0.5bn a year,  as a funding instrument for students and a graduate tax.  The main practical difference between the way loans are used in Scotland and a conventional graduate tax is that the Scottish system requires those who started from a poorer background to pay back a larger share of their future income as a result of going to university than those who came from better off homes, whose incomes will be less affected, if at all.

We will continue to take the steps that I outlined in detail to Kezia Dugdale to support students from the poorest backgrounds to go to university.

I have already said, so I will not repeat myself at length, that we have increased the bursary element of the student support package and I have cited the figures that show the lower levels of student loan debt in Scotland. Ruth Davidson will be aware that, right now, the work of the commission on widening access is under way, and the commission will advise the Government on what additional steps we need to take to support poorer students to get into university. We will continue to do that hard and serious work and we will have the honest debate about the funding options that Ruth Davidson talks about as we approach the election next year.

Ruth Davidson:

I thank the First Minister for confirming that her position is based on an ideological point of view and that the SNP has written so-called free education on a tablet of stone. It is sad that this First Minister is too stubborn to recognise the need for change, because change is needed.

The facts are these: only one in 10 of our poorest 18-year-olds are getting to university, and someone who is rich is three-and-a-half times more likely to go to university. She talked about her situation growing up. Mine was similar. I was also on a full grant of student support when I went to university, which is what helped me to get there. For all the talk of widening access commissions, this Scottish National Party Government has singularly failed in more than eight years of office to close the gap between rich and poor in respect of access to university.

We have a solution, and it works. All that we ask is that the First Minister has the courage to ditch the stone carvings and the vanity projects and move to practical solutions for our poorest students. Will she?

The First Minister:

Ruth Davidson calls it “ideological”; I call it “principle”. It will be for the people of Scotland to make up their minds. Ruth Davidson will put forward her policy at the election and I will put forward mine, and I am happy to allow the Scottish people to be the judge.

In the meantime, we will continue the hard work to ensure that everyone has an equal chance of going to university. That is why we established the widening access commission. As I said, since 2006, there has been a 50 per cent increase in applications to university from those in the most deprived parts of our country.


Willie Rennie:

I have just listened to exchanges between the First Minister, Ruth Davidson and Kezia Dugdale. For five years, I have been lectured by the First Minister on student finance. All the while, her Government was breaking its promise to dump the debt. [Interruption.]

The Presiding Officer:


Willie Rennie:

It has—[Interruption.]

The Presiding Officer:

Order. Let us hear Mr Rennie, please.

Willie Rennie:

I have—[Interruption.]

The Presiding Officer:


Willie Rennie:

I have been lectured for five years. The debt has not been dumped; it has been doubled.


The First Minister:

First, I thank Willie Rennie from the very bottom of my heart for so bravely reminding the Scottish electorate, just a few months before a Scottish Parliament election, of the Liberal Democrats’ record on tuition fees.

Comment: although Liberal Democrat support in the Scottish Parliament was essential to the abolition of the graduate endowment for Scottish students in 2007, the later involvement of the Liberal Democrats at Westminster in raising fees for students in England has been subsequently used quite aggressively by the Scottish Government as a basis for de-legitimising any critique of funding for Scottish students in the Parliament by the Scottish Liberal Democrats. Some press reports in 2007 suggested that protection for bursaries had been offered to secure Lib Dem support for abolishing the GE, but I have not been able to trace that back to any primary source.


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