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SNP conference announcements on student support: what’s changing and what’s still to come?

June 10, 2018

What to make of announcements at yesterday’s SNP conference about student funding? The most comprehensive information comes from the Scottish Government’s press release .

snp conf 2018

Loan repayment rules

The increase in the repayment threshold for student loans from April 2021 is a clear improvement. The current threshold for student from Scotland (and Northern Ireland) is £18,330: the figure rises each year roughly in line with inflation. The increase means that from April 2021 those earning between whatever £18,330 has been inflated to by then  (somewhere in £19-20k range) and £25,000 will cease to make any payment. Those earning over £25,000 will pay a bit less than £600 a year less than now.   The £25,000 limit matches that applying already in England and in Wales, and is higher than than the £22,000 which was in the 2016 SNP Holyrood manifesto and the current Programme for Government, and endorsed by the  Scottish Government’s student support review last November.

Another improvement is the reduction in the period before a loan is written off, from 35 to 30 years, bringing Scotland into line with the rest of the UK.

Why these changes improve the situation for lower-earning graduates is discussed in more detail in this post. That post, which drew attention to Scotland’s unusually strict repayment terms within the UK,  was written in March 2014. NUS Scotland’s campaign for change came subsequently, manifesto commitments were made by the SNP and other parties in 2016, and the changes will take effect in 2021. So improvement will have been a long time coming, but it is at least now firmly scheduled for the future. The impact will first be felt a week or so before the next Holyrood election by those with month-end wage payments, as an increase in take-home pay of up to £50 a month, and so just meets the “within this parliament” promise in the SNP manifesto. Scrutiny of the decision ought to examine why it is not being implemented any sooner.

Increased grant for care experienced students

In March 2016 the Widening Access Commission recommended all support for care experienced students in higher education should be provided as grant.  At that point, all young students unable to declare any family income were on a grant of £1750 and a loan of £5750.  As most care experienced students would be expected to fall into the group with no family income, they were very likely to be among those who had suffered a cash loss when the maximum YSB was cut (from £2640 to £1750) in 2013, and who were faced with the choice of getting less support or borrowing more. The new 100% grant was implemented in 2017-18.

The announcement means first that the 100% grant support for these students in HE will increase from £7,625 to £8,100 from this autumn, increasing their support by 6%. The total maximum value of support has been held at £7,625 since 2015-16; this increase is enough to restore these students’ support to its 2015-16 real terms value (which was worth around £8060 at current prices).  The change has been announced relatively late for the academic year 2018-19, so that the relevant SAAS literature is suddenly out of date. In practice, the delay probably will not have mattered for individual decision-making.

The other, more significant, change is that the same grant will be made available to care experienced students in FE. FE here refers to the level of study, not the place: there are HE students in college, on HN courses. Care experienced students in FE are currently on a lower bursary of £4,185, and no loan. So this almost doubles their funding, and is a major improvement. For this group, the lateness of the announcement is more likely to mean some people may already have discounted continuing in education for financial reasons who might not otherwise have done so, but this will still be substantial useful funding for those who do enter from this autumn.

The Scottish Government expects the change under this heading to cost around £5.5 million. Most of this cost is likely to be incurred in FE, where funding will rise by almost £4,000 a person.  I can’t quickly find numbers for the take up of the existing bursary in HE, but a £475 increase per head won’t cost much there.  It probably is not a coincidence that in the budget last autumn (p73) the additional £5m was identified for implementing the student support review was added to the budget of the SFC, which administers FE bursaries, rather than to the budget of SAAS which covers HE. Scrutiny here might look at why the specific use of the SFC’s £5m could not be announced any earlier, to aid student decision-making for 2018 entry.

The main student support arrangements

The final element of the announcement, on which more detail is promised in the press release “in the coming days”, is that

£16 million will be invested next year in increasing college bursaries and university grants for students from the lowest income families and expand access to them

The notes to the press notice add that “Bursaries for further and higher education students will be increased from 2019/20.”  This is helpful, as the First Minister’s speech (here at c21:40mins onwards, or text here) was less clear on timing, with the FM stating “as a first step, we will spend £16m next year to increase college bursaries and university grants … “. The next academic year starts in August, but next financial one is 2019-20, so it’s important to know which was meant.

Total spending on means-tested bursaries in HE is around £60m, and on FE bursaries it is around £90m, so the proposed increase across all bursary spending is around 10%.

£16m is exactly the amount the student support review calculated it would cost to increase the existing bursary in FE to £4,050, under its “Option 2”. For young students living at home the maximum is currently around £1,000 less than that: for older students and those living away it is already just below £4,000.

The £8,100 being used for care experienced students is also the same figure the student support review recommended as the value of combined grant and loan support for all students (as a “minimum income”). The care experienced bursary has moreover up to now been based simply on replacing the loan element of the main package with grant. So the increase to £8,100 for this group might be expected to imply that this is the new maximum which is going to apply more generally.

I wondered aloud if, if a general increase to £8,100 were planned, it would be done using loan or grant. Unprompted, the relevant SG Special Adviser appeared to answer it would be grant.

mcallister

I read this initially as saying that there was indeed going to be a general increase, and it would be achieved by grant. However, realising later that the FE figure quoted is specifically for the care experienced bursary, it looks like Colin McAllister was not referring to the package of support for all, but only to that for care leavers. It remains unknown therefore whether the total value of maximum support in HE will remain the same, or be increased using loan, or using grant.

Using grant to increase the maximum to £8,100 for those at low incomes would imply a rise in maximum YSB from £1,825 to £2,350, and in ISB from £875 to  £1,350. That would cost around £15m, I think. It would however also leave an even bigger drop in entitlement as soon as family income exceeded the eligibility threshold, to £1,125 YSB and zero ISB.  So some extra money would probably also have to be spent on smoothing. The £16m would be all used up on HE alone.

It looks more likely therefore that the Scottish Government is heading towards accepting the review’s Option 2, at least as far as bursary is concerned. That would mean higher FE bursary and no change to HE bursary.  The remaining question is then whether it will also follow the review’s proposal that total support should be raised to £8,100 for FE and HE students at all incomes, by increasing loans in HE and introducing them in FE for the first time. The review estimated this would mean issuing around £231m more in loans each year: annual lending to students is currently around £500m.

option 2 2

When will more be known?

The announcement “in the coming days” could be very soon.  There is a PQ down for answer on Wednesday, 13 June about plans for student support. 13 June is the next Education oral PQs, and as this is from the government Chief Whip, it can safely be assumed that it is what’s politely known as an “inspired” PQ (and less politely, a “planted” one).

kidd

In passing, the phrasing is a bit odd, as it reads as though the review picked out care experienced students uniquely for a minimum income. It didn’t, but recommended this for all students, and argued that care experienced ones get it all as grant. But the reference to a minimum income does give a peg for announcing such a thing for students more generally, so the slightly peculiar wording may be deliberate.

How would living cost support in Scotland compare with other parts of the UK in 2018-19, if it was set at £8,100?

That’s a whole different blog post. I’ll do that in the comings days, as SG might say.

 

 

 

 

 

 

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