Skip to content

Student grant in Scotland: a catch-up

January 16, 2016

There’s a lot of coverage right now of the plans to abolish grant is England.  This post is as reminder of how the 40% grant cuts in Scotland in 2013-14 were constructed and handled and what they have meant for students.

The details are in the table below is an updated version of one I did last year, which included comparative material on England, which I’ve left in for interest.

In the context of the current debate about England, the most salient points are:

  • total spending on grant for low-income students was cut in Scotland in 2013-14 by 40%: some students lost over £1,600 a year.
  • there was no announcement, to the Scottish Parliament or anyone else:  the relevant  press notice covering other changes happening at the same time was indefensibly silent about this, and there is still no official statement that admits this happened. Letters to students did not explain that their grant was lower because of changes to the rules. The government continues to deal robustly, let’s say, with anyone who raises that this happened.
  • as well as less being spent, fewer students are now receiving an income-related grant in Scotland – the reasons for this are unclear and it is surprising, given that other data shows some increase in the numbers from disadvantaged backgrounds.
  • the NUS in Scotland were enthusiastic about the changes (and like government talked up the changes and avoided attention being drawn to grant cuts), which they were involved with designing, on the basis that even though grant was rising, a large increase in living cost support was being provided at the same time, across the income range, using loans.  By contrast, NUS in England has not been persuaded to subscribe to grant reductions by the (even higher) loan-based living cost support being provided there as part of the change.
  • fees in England mean debt is much higher there – but with a black irony this means that in practice these grant cuts will have less impact pro rata  in practice than those that have been implemented in Scotland, because, as the IFS has shown, so many grant-eligible students in England were already unlikely to pay off their loan before it was written off under a time bar.

 

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).
Grant 

 

 

 

 

 

 

 

 

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. Largest loss £1,640, losses either side £1,000 common.

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, from £89m in 2012-13 to £53m in 2013-14. In 2014-15, it was £52m.  It should be higher in 2015-16, as a small increase (£125 pa for some students) was applied this year.

 

 

 

In 2012-13, 51,500 students claimed an income-related grant; slightly over 49,000 did in 2014-15, a fall the reasons for which are not immediately clear.

 

No equivalent to the university provided system of support in England. Some institutions have income-related schemes, but looking at individual university websites strongly suggests they will collectively provide a relatively marginal level of support to Scottish students, but there is no national data collected on how much is spent.

Spending  will fall over the 4 year period from 2016-17, and should be de minimis by 2020.At £1.6bn, spending on national 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 to zero.

Around 550,000 students get a maintenance grant, broadly  pro rata the number in Scotland on population terms (it’s a slightly higher proportion of the student population, probably as grant is  currently available to a higher income level).

 

These figures exclude the system of institution-provided non-repayable funding in cash and kind (mainly bursaries and fee waivers) overseen by OFFA, which institutions are required to provide.  Spending on these is forecast to be £399m in 2016-17  (para 25 here), likely to be about two-thirds pro rata the residual national Scottish grant. This system will continue, although for how long at this level is not predictable.

 

Thresholds Threshold for max support was reduced from £19,300 to £16,999 (rising back to £18,999 from August 2016).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 and parliamentary approval 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. No legislation of any kind was required. 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.

Requires parliamentary approval, but has been delegated to committee in Commons, which met on 14 January.

 

Reaction
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. There are plans for an opposition debate.
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.
Advertisements

From → Uncategorized

Comments are closed.