The viewing statistics for this site strongly suggest that the numbers searching for information on next year’s SAAS figures are growing: posts with titles to do with SAAS plans for next year are rising quickly up the table.
As previous posts have pointed out, these figures are now very late: the absence of complaint from NUS Scotland in turn implies that that there may be continuing negotiations going on.
What might be holding things up? The budget passed earlier this month gave no indication of additional funds for student support. With no provision in the plans for extra cash between this year and next year, there is not at first sight much scope for increase in grant next year (although the £21 million it was recently revealed had been held back from the funds for universities might be a straw in the wind). There may be more headroom on loans, though increases there would require the government to be willing to be more upfront about the scale of its reliance on these. As this post argued, there’s a case for doing something to provide more to those at just over £34,000, whether as loan or grant, as well as a case for restoring in whole or part the large grant cuts of 2013-14, to deal with Scotland’s uniquely regressive pattern of student borrowing.
Within grants, something could usefully be done urgently to increase what’s available to those coming out of care: it seems particularly unfair to expect this group to borrow almost all their living costs. The numbers of such students are small – itself a cause for concern – so the cost of giving them a decent grant (or more discreetly and cheaply, a debt write-off?) would be low.
NUS Scotland, as well as the Liberal Democrats, have lately argued for an increase in the repayment threshold: that might still be on the cards.
A more spectacular deal would do something about the status of FE student support, which remains discretionary, unlike that for students in full-time higher education. Again, however, the budget doesn’t look helpful here, unless (again) loans are coming in to the frame.
The First Minister recently announced that there were to be a series of announcements around education and tackling disadvantage, so some extra investment in student support for the poorest can’t be ruled out. The problem, as ever, is that there’s not much cash: most of the government’s non-loan spending on student support is tied up in fees and therefore untouchable. Even £21 million can only go so far.
For readers looking for hard information, it remains a case of watch this space – but surely not for much longer?
This post belatedly does a bit more work to tease out differences in actual borrowing by household income under the arrangements for student support introduced in Scotland in autumn 2013. The published data is less clear on this than it used to be, but it turns out that the statistics still provide a reasonable way to compare students in the lower and upper half of the income distribution, at least.
It explains how:
- at minimum students from incomes below £34,000 accounted for 61.5% of all borrowing, but were only half, probably slightly less, of all students, and
- the average amount borrowed in the lower income group was £5,780 and in the higher one £4,140, a difference of £1,640 a year (+40%).
Data issues
In contrast to previous years, for 2013-14 it was not possible to tell directly from the data published by SAAS how debt was distributed across the different income bands. For 2012-13, figures on all forms of support were provided in income bands of £10,000. There were two further categories. One was for those deemed “exempt from contributions” , who are entitled to the highest value loan and grant (mainly mature students, but also those coming out of care, for example). The other covered those who did not declare any income detail, because they were not seeking any form of mean-tested support. They came mainly from higher-income backgrounds.
For 2013-14 Table A6 instead has this simpler structure:
| Loans | |||
| Number of Students | Amount (£ million) | Average Amount (£) | |
| All | 85,655 | 429.6 | 5,020 |
| Income not declared / required | 48,840 | 229.9 | 4,710 |
| Up to £16,999 | 19,375 | 108.8 | 5,610 |
| £17,000 to £23,999 | 7,175 | 39.0 | 5,430 |
| £24,000 to £33,999 | 7,510 | 40.0 | 5,320 |
| £34,000 and above | 2,755 | 12.0 | 4,340 |
While this shows a clear income-related effect, the figures are incomplete at lower and higher incomes, as the first line combines the borrowing of those previously classed as “exempt from contributions” (many of whom will have been borrowing sums either side of £6,000) and most of those at incomes over £34,000. The “£0 – £16,999” category therefore excludes many of those assessed as having no relevant income at all, while the “£34,000 and above category” only catches a small number of cases at that level.
However, there is a new set of figures among the 2013-14 statistics which can be used to unpick what was happening at lower incomes a bit further. This post looks at those.
Comparing claimants for two types of loan
The new information provided in Table A11 splits the student population into two groups: (a) those who claimed “income-assessed” loan; and, (b) those who only claimed “non-income assessed” loan.
Those claiming an income-assessed (ie mean-tested) loan by definition must have declared incomes below £34,000. The rest will mainly be students whose incomes were £34,000 and above. The second group could in theory contain some students from lower incomes who chose not to claim the higher loan, for whatever reason (perhaps because they were living at home). In practice, that group appears likely to be small, however: see footnote 1. So Table A11 appears to provide a pretty good basis for comparing borrowing between those above and below £34,000. Just under half of students will have fallen into the lower-income group and just over half into the higher one (footnote 2).
The figures show that students claiming a means-tested loan borrowed £264m, out of total student borrowing of £430m. So we can say that at minimum students from incomes below £34,000 accounted for 61.5% of all borrowing, but only half, probably slightly less, of all students. Conversely, the better off half (plus) of the student population took out at most 38.5% of total loans.
Students from homes below £34,000 took a lower share of total debt than in 2012-13: that year they accounted for around three-quarters of borrowing (footnote 3). That’s not because their debt was falling (far from it: it rose by around 40%, see footnote 4) but because a substantial rise in the non-means-tested “minimum” loan, from under £1,000 to £4,500, entitled students at higher incomes to anything between a few hundred to several thousands more (for example, the minimum loan at £47,000 used to be £3,000). Borrowing rose faster in this group than at lower incomes, as students responded to this.
However, because their starting point was so much lower, the average debt for the better-off half remained significantly below that for poorer students. Table A11 also shows that the average amount borrowed in the lower income group was £5,780 and in the higher one £4,140, a difference of £1,640 a year (+40%). These average figures are for active borrowers, of which there were more in the lower income half or so of the student population (45,675 versus 39,980). If non-borrowers were factored in, the differential in borrowing between the two groups would be wider.
Differences within each half of the income distribution
A household income of £35,000 is very different from one of £80,000, as discussed here. If we could split the upper half of the income distribution in half again, we would be likely to find the effect above repeated in miniature, with higher take-up, and probably higher average borrowing, for those between £34,000 and around £50,000 and the rest: there were some signs of that pattern in last year’s data. However, from this year all students from homes with incomes over £34,000 appear identically in the SAAS records, so this exercise cannot be done.
Similarly, if we could identify separately those who get maximum support because they have nil income, we would be likely to find a group of students whose borrowing and take-up rates were higher than for the rest of the lower-income group. The data to do that probably does exist, even if not in the official statistics.
Skewed debt: an act of policy, not nature
As ever, it is important to emphasise that the skewing of debt towards poorer students is not some sort of irresistible natural phenomenon, which is a common automatic reaction among people in Scotland when this effect is drawn to their attention. It is a direct result of policy choice, as comparison with other parts of the UK shows.
Footnote 1
In 2012-13, a total of 43,100 borrowers were classified as having an income below £30,000. Separate figures produced for a PQ last year suggested a further 3,000 or so borrowers at incomes between £30,000 and £34,000, suggesting around 46,000 borrowers from incomes below £34,000 last year in total.
Let’s assume that there has been no significant shift in the absolute number of low income students. That seems reasonable: total grant claims fell slightly between the two years, but for reasons to be discussed elsewhere, that is not necessarily a sign that fewer poorer students were in the system. Let’s also assume the likelihood that low-income students would borrow did not fall: that also seems reasonable. If anything, with grants being cut the pressure in the system would have been towards increasing the numbers taking out a loan. In other words, let’s assume there were still at least 46,000 lower-income borrowers in 2013-14.
In practice, 45,675 students took out a mean-tested loan in 2013-14. That suggests that this category includes most of the borrowing by low income students – and conversely that most low-income students who borrow, do not restrict themselves to the minimum loan. That wasn’t necessarily a predictable effect: more self-limiting borrowers might have been predicted at lower incomes, as such students tend to report more debt aversion in qualitative studies. But what seems to be happening here – and it deserves more testing – is that students at low incomes tend either to engage fully with the loan scheme, or not at all.
There may still be a small amount of borrowing by lower-income students not included in this category, but it would be likely to have a de minimis effect on the figures: 1,000 students borrowing the standard non-means tested amount of £4,500 would account for 1% of total borrowing.
Footnote 2
For 2013-14, again we only know the total number of students supported by SAAS in 2013-14 at incomes below £34,0000 excluding those exempt from contributions (on grounds of low income). The figure was 43,505, but with so many missing students, it is not much help.
Using a similar approach to footnote 1, we can see that in 2012-13, a total of 54,450 students in receipt of some form of support from SAAS were classified as having an income below £30,000. Separate figures produced for a PQ show there were a further 3,730 students between £30, 000 and £34,000, giving a total of 58,150 at incomes below £34,000 in 2012-13.
That was 48% of the total number of SAAS supported students (excluding EU domiciled students, who are ineligible for loans) that year.
Because of the absence of separate data for the exempt group this year, it is impossible to judge whether the proportion of lower-income students was exactly the same in 2013-14. But from what data we have, not least for grants, there is no obvious reason to assume that there this group has increased as a proportion of the SAAS caseload: around half of SAAS-supported students are likely still to report incomes below £34,000.
Footnote 3
The 2012-13 SAAS statistics show that students between £0-£30,000, plus those exempt from contributions, accounted for £178m of loan. In addition, a PQ answer from last year allows us to estimate that 45% of the debt taken out among those between £30,000 and £40,000 fell to students with incomes up to £34,000. That comes to £12m. Altogether, that gives total borrowing for all students at incomes up to £34,000 of £190 million, out of a total student loans of £254m.
Footnote 4
£190 million (see note above) divided by 46,000 gives £4,128, as the average for this group in 2012-13, to compare with £5,780 in 2013-14.
This question is prompted by setting recent media coverage of a possible announcement of a £6,000 fee cap by Labour against logic lately applied by the Convenor of the Scottish Parliament’s Education and Culture Committee.
Back in October, Stewart Maxwell MSP generated a fair amount of press coverage for his calculation that “Scottish students save £1 bn with free tuition“. The figure, badged as “new research”, was a response to a request made to the Scottish Parliament Information Centre (the full document they sent to Mr Maxwell is here): it was based on working out what Scottish students would have paid in fees over three years had each new cohort entering the system been charged the average amounts applying in England in 2012-13, 2013-14 and 2014-15. SPICe was not asked what the equivalent calculation would be for grant funding, where English spending is higher per head, so that element was not included.
In a common pattern for this sort of piece, the Press Association picked up and repackaged the material in the SNP press release, and the PA report was then run in near-identical terms in The Scotsman, The Herald and The Courier (only the Courier credited PA), and in various less high-profile places, with the headline “Students ‘saved £1bn under SNP’ (Courier), “Scots students have saved £1bn in tuition – SNP” (Scotsman) and “Scots students save £1bn in tuition fees under SNP” (Herald). The SNP press release in fact avoids a direct claim that the SNP alone has saved students all this money (though that’s the clear implication): it was the headline writers who made the point explicit.
What if a lower fee cap of £6,000 had applied? A quick sum reveals that the saving would have been £0.26bn less. So if a lower fee applies in England in future, Scottish students will save less. Conversely, the higher fees are in England, the more Scottish students save …. Is that a good thing or a bad thing?
These are all, of course, pretty peculiar calculations, because they depend on the premise that Scottish students are constantly at risk of having the full effects of English fee policy applied to them. This despite there being no party here advocating fees at the English level (other than for rUK students, for whom the current Scottish Government has famously argued the case for such a fee, and applied it) . Nor, as far as we know, does the government here have plans to set up a review body whose deliberations will be strategically timed over an election, the technique used by successive Westminster governments to achieve fee rises.
It’s certainly fair to say that without devolution Scottish students might well have ended up in the same higher fee regime as now applies in England: but we have now had devolution for almost 16 years and for 15 of those Scottish students have been treated more generously for fees, under governments of various parties. Really, it’s time to start taking our own policy making in this area as seriously as that of our neighbours.
And that’s the point of this post. Rather than worrying away at how students would have been affected if devolution had never happened, shouldn’t those in a privileged position to do so be examining the effects of decisions which have actually been taken in Scotland in recent years?
So we might ask what students have saved from the abolition of the graduate endowment versus what more they have lost as a result of more recent reductions in grant. At 2013-14 prices, the total saving in endowment payments is £32 million (see here: page 44), while the total reduction in grant spending since 2006-07 is £56 million (footnote 2 below), giving a net annual loss to students of £24 million.
As I showed (pp 45 onwards), it is possible to go further and chart the relative winners and losers from these two exercises: low-income HN-level and degree students in particular have lost, while higher-income degree students have gained the most: so the net loss masks a greater loss concentrated on those from lower incomes. This analysis has been in the public domain for a year. The Scottish Parliament’s Education Committee under Mr Maxwell has never looked into this effect, however.
Mr Maxwell has instead continued with his interest in the £9,000 fee, taking the time to do a different calculation of what Scottish students have been saved for this piece from January. A recent proposal to increase the lower Scottish repayment threshold for student loans, which would be a significantly progressive more, was dismissed with further comments on English fee policy (as discussed here). And as this post discussed, Mr Maxwell’s Committee does not seem to be concerned that information provided to it by the Scottish Government in 2012 over-estimated the numbers likely to claim the low-income grant for young students under then new system by some 25%. Discussions in the Committee have barely touched on the increase in student borrowing from £241m in 2013-14 to £468m next year.
Mr Maxwell once took more interest in decisions affecting Scottish students directly, saying in 2007:
Labour’s policies since 1997 have been disastrous for Scotland, removing grants, imposing student loans and tuition fees, and leaving our graduates with massive debts… Labour have plunged Scotland’s students into thousands of pounds of debts. The SNP have taken the first step to alleviating that debt. I know students and their families will welcome this decision.
Reductions in grant and increases in loan for Scottish students are themes to which he could now return. He could make the fair point that the Scottish government’s room for manoeuvre is considerably constrained by what’s happening with the Barnett formula, but still examine the impact of not giving living cost support at lower incomes the same priority as fees in the cash budget, which is a purely local political choice.
There has been a serious gap in the scrutiny of the Scottish government’s decisions on student funding over the past three years. In the hugely privileged position of convenor of the relevant Holyrood committee, Mr Maxwell is uniquely placed to put that right (think of Alex Neil’s use of the same post to push forward policy on lifelong learning a decade ago). Just because he is a government backbencher doesn’t mean he can’t ask the government hard questions (think Christine Grahame on corroboration). All that’s needed is for the detail of policies made in Scotland to exert as much fascination as decisions taken over the border.
Footnote (1)
Credit is due to the SNP for publishing the whole SPICe note. As well as setting out the detail of the calculation it includes some other observations, including:
It might be worth stressing that these figures tell us how much revenue HEIs in England are able to generate from the increased tuition fee now in place – and what income HEIs in Scotland would be able to generate based on charging the estimated number of students the same average tuition fee as charged in England. What these figures don’t tell us is how much government spending goes on tuition fee loans.As some students will not take out a loan for some or all of their tuition costs, the government only need to meet the cost of any borrowing to cover the cost of tuition fee loans. …One final point is a simple note of caution as these figures are very much estimates based on a set of assumptions that should be in the right ball park, but may not (if we had more detailed figures) come out exactly the same as we are estimating.
That’s a reminder that the other way to look at all calculations like this is as a proxy for the cost of investment in undergraduate tuition (it’s not perfect, as the net fee in England appears to be higher than funding per student in Scotland, while against that, the cost of funding EU students in Scotland is not included).
Footnote (2)
The latest out-turn data from SAAS, not available when I wrote the original report, shows that total spending on all forms of non-repayable grant was £103 million in 2006-07 and £65 million in 2013-14, all at cash prices. Using the most recent GDP deflators, the 2006-07 figure becomes £121 million at 2013-14 prices, giving a fall of £56 million per annum. Reduced spending on Young Student Bursary accounts for most of this.
Is Stewart Maxwell MSP, Convenor of the Education and Culture Committee of the Scottish Parliament, more interested in the welfare of students in England than in Scotland? The question seems fair, in the light of his reaction to the suggestion that the repayment threshold for student loans in Scotland should be raised.
The proposal has been made most recently by the Liberal Democrats, but also featured in the NUS Scotland submission on the Scottish budget. At the moment, the state collects 9% of all earnings over £16,910 from Scottish graduates: in England and Wales, it’s 9% of everything over £21,000. Northern Ireland is like Scotland for this.
Raising the threshold to the same level as applies in England and Wales would tackle some pressure off lower earning graduates, and mean that the lowest earners would end up paying back less debt overall. As Chowdry, Barr and others have shown, increasing the repayment threshold for loans is a progressive policy. And Scotland, as the only part of the UK which visits more student loan on low-income students than ones from better-off homes, could badly do with one of those in this area.
As Convenor of the Scottish Parliament’s Education Committee, it might have been hoped that Mr Maxwell would take a serious interest in all this. Disappointingly however his comments – at least as quoted in The Herald – are confined to these:
For Willie Rennie to start courting the votes of students after the way his party spectacularly betrayed them over tuition fees takes something of a brass neck and will fall on deaf ears as students – like the rest of Scotland – continue to reject his party.
The Lib Dems are responsible for students south of the border being up to £9,000 per year worse off – and despite Willie Rennie’s shameless claims, their betrayal of students will continue to haunt them through the general election campaign and beyond.
Scotland’s students won’t forget the way the Lib Dems ditched any pretence of principle in order to jump into bed with the Tories – and May’s election is the perfect opportunity to hold them to account on their history of broken promises.
And that’s it.
He is arguably on tricky ground on the question of what he terms “broken promises”, given that in 2007 the SNP campaigned to “Dump the Debt” by replacing loan with grant, but has subsequently allowed the exact opposite to happen. But even leaving that to one side, as in fairness most people here seem happy to do, is it too much to expect that the convenor of the relevant parliamentary committee in Scotland might at least show as much interest in the detailed operation of the system that actually affects Scottish students as he does in what’s done elsewhere? As students in Scotland – particularly poorer ones – have drifted into ever-increasing levels of debt to the state, the Education Committee of our Parliament has paid no real attention.
As the Liberal Democrats and the NUS have both rightly noticed, there is scope to offer low earning graduates some relief from this situation, even within the budget constraints faced at the moment by the Scottish Government. Mr Maxwell has an especially privileged platform in this debate. He could be calling for evidence from the Scottish Government and from experts such as Chowdry. He could be asking his committee to examine an analysis by SPICe which shows that, due to Scotland’s lower threshold and longer write-off period, the lowest earning Scottish students will end up paying back more in practice than their English counterparts, even if they have half the debt on paper. Sadly, however, Mr Maxwell seems to have pointed his platform, and attention, firmly to the south – and those low-income students, and low earning ex-students, who actually fall within his remit can only wait and see if their situation will ever catch his eye.
The surprising answer to the question above turns out to be, perhaps not very.
In the autumn of 2012, the Education and Culture Committee of the Scottish Parliament published its report on the Scottish government’s budget proposals for 2013-14.
The Committee reproduced in its report a table provided by the Scottish Government in which the government had estimated the numbers expected to claim grant and loan at particular levels under the proposed new system. The table is at the foot of this post.
An interesting thing about this table was that it appeared to estimate that some 42,000 students would be claiming Young Student Bursary in 2013-14. Given only 33,140 were claiming it in 2012-13, that seemed surprisingly high, but with changes in the rules for repeat years and the rolling into YSB of younger claimants from other schemes, perhaps the government knew something that was not apparent from the previous year’s figures. The numbers implied spending on YSB of £55.017 m.
(Another interesting thing about this table was that it gave income thresholds which were different from those already published elsewhere: but that’s a minor point by comparison.)
We now know the actual number of YSB claimants for 2013-14, was 33,155, an increase of 15 (people, not per cent). Spending on YSB was £40.6 m. The claimants and implied spend for Independent Student Bursary was, by comparison, much closer to the original estimate: see below.
The table provided to the Parliament was, in other words, way out, over-estimating the number who would benefit from YSB by 26% and implying spend 36% higher than actually occurred. As far as I can tell, no explanation for this has been volunteered, or sought.
Exactly where the problem lies in the figures we cannot tell, because the statistics published last October do not – again surprisingly – include equivalently detailed data on the numbers benefitting from loan and grant at each of the different rates.
This means it is also not possible to test the statement made at the time that “the Scottish Government expects the minimum income guarantee to benefit 40,668 students next year”, because the number of young students in receipt of the maximum YSB has not been separately identified. That’s also surprising.
Does any of this matter? I’d say so, but it remains to be seen whether that view is at all widely shared. Whether we will ever have the detailed figures for comparison and an explanation for why the estimate provided to the Committee was so different from what actually happened is equally unclear.
Extract from the committee’s budget report, para 108:
“The Scottish Government provided the following table, showing estimates in take-up of the various levels of student support in 2013-14—
| Support type | Household income group | Number of expected students | Bursary (£) |
Loan (£) |
Total support (£) |
| Young Students | Less than £17,000 | 24,047 | 1,750 | 5,500 | 7,250 |
| £17,001 – £23,000 [sic: in practice, £17,000 – £23,999] | 7,982 | 1,000 | 5,500 | 6,500 | |
| £23,001 – £32,000 [sic:in practice, £24,000 – £33,999] | 9,906 | 500 | 5,500 | 6,000 | |
| £32,001+[sic: in practice, £34,000+] | 56,835 | 0 | 4,500 | 4,500 | |
| Total Young Students | 98,770 | ||||
| Independent Students | Less than £18,000 [sic: in practice, £17,000] | 16,621 | 750 | 6,500 | 7,250 |
| £18,001 – £29,000 [sic: in practice, £17,000 – £23,999] | 1,635 | 0 | 6,500 | 6,500 | |
| £29,001 – £32,000 [sic: in practice, £24,000 – £33,999] | 290 | 0 | 6,000 | 6,000 | |
| £32,001+ [sic: in practice, £34,000+] | 2,172 | 0 | 4,500 | 4,500 | |
| Total Independent | 20,718 | ||||
| Total | 119,488 |
Notes:
The implied total of YSB claimants is all those in the three lowest income categories i.e. 41,935.
The implied total YSB spending is £55.017 million i.e. the grant rate multiplied by the expected number in each of the first three lines.
The total number of ISB claimants estimated is shown in the first line only of that section, i.e. 16,621, and the implied total spend is that figure multiplied by £750, i.e. £12.466m. These estimates were pretty accurate: the final figures were 17,405 (+1%) and £12.3million (-1%). Puzzlingly, though, the actual figures for 2013-14 imply an average payment of £707 for a grant with a flat-rate value of £750, meaning spending is some £0.7 million less than the number of claimants alone would imply. It would be interesting to know how that works.
The total number of students benefiting from the “minimum income guarantee” was the total number expected to receive the highest possible grant, either YSB or ISB, i.e. 24,047 plus 16,621.
The total number of students potentially able to claim grant of living cost loan (in practice, Scottish domiciled full-time undergraduate students) was 120, 565, 1% higher than the estimate, again a reasonable degree of accuracy for this sort of exercise.
The student support rates for new and continuing students in Scotland for 2015-16 remain unknown.
This must be about as late as they have ever been (see this earlier post). They are already an unprecedented 10 and a half months behind announcements for England, where admittedly the 2015-16 rates were announced exceptionally early, on 13 March last year.
On Wednesday, the Scottish Parliament will be debating Stage 3 of the Budget Bill and, presumably, passing the figures into law. So an announcement on student grant and loan rates might be due in the next few days, as part of that. If, for example, NUS Scotland’s bid for a bit of extra grant at low incomes has been successful, that might be a good news story for Wednesday and an indication that the new administration is not simply rolling forwarded inherited policies. A rise in the minimum grant of £250, to £2,000 for the poorest students, would be a tidy headline. It would cost between £5 million and £8 million, depending how it was done (see footnote). Raising mature students from £750 to £1000 would cost a little under £5 million.
These sort of figures could be found from the £21 million the Funding Council has been asked to hold back from university funding for next year, even after finding extra cash for FE bursaries. But they would make a large dent in that and store up a pressure for future years; and even a change on this scale would represent only a step towards restoring the £35+ million taken out of the grant budget last year.
Still, there must be a reason for the delay and, now it’s clear that the SG has possibly found a way to liberate some £20 million from within the post-school budget, something on these lines surely can’t be ruled out.
Footnote
The most recent SAAS data (Table A8) showed that in 2013-14 there were 33,155 claimants for the Young Student Bursary. The table does not give separate figures for the numbers claiming at the highest rate (£1750) and the two lower rates (£1000 and £500), but evidence provided by the Scottish Government to the Scottish Parliament (see below) in autumn 2012 suggested they expected 57% of claimants to be at the maximum rate. If 57% of YSB claimants received an extra £250, it would cost £4.75 million: if they all did, £8.3 million. A problem with only giving extra grant to the poorest group is the even sharper cliff edge it would create when household income tips from £16,999 to £17,000. There were 17,405 claimants for the Independent Student Bursary: giving each of them £250 more would cost £4.351 million: the same cliff edge effect would apply.
This table from the SG was included in the Education Committee’s report on the 2013-14 budget proposals (para 108). It always looked a bit odd, as it projected total claimants for YSB of just under 42,000, well in excess of the numbers claiming up to that point and – in practice – more than 25% higher than the actual number in 2013-14. The Education Committee has not, as far as I am aware, been given any explanation for this difference. The estimate of 57% of YSB claimants on the maximum rate assumes that even if the total numbers were not accurately predicted, the distribution between income bands is usable enough.
The SG slightly under-predicted ISB claimants, but within more normal margins of error for this sort of exercise: although, also slightly oddly at first sight, it used different income cut-offs from the actual scheme, which presumably would have been on the SAAS website by that point.
| Support type | Household income group | Number of expected students | Bursary | Loan | Total support |
| (£) | (£) | (£) | |||
| Young Students | Less than £17,000 | 24,047 | 1,750 | 5,500 | 7,250 |
| £17,001 – £23,000 | 7,982 | 1,000 | 5,500 | 6,500 | |
| £23,001 – £32,000 | 9,906 | 500 | 5,500 | 6,000 | |
| £32,001+ | 56,835 | 0 | 4,500 | 4,500 | |
| Total Young Students | 98,770 | ||||
| Independent Students | Less than £18,000 | 16,621 | 750 | 6,500 | 7,250 |
| £18,001 – £29,000 | 1,635 | 0 | 6,500 | 6,500 | |
| £29,001 – £32,000 | 290 | 0 | 6,000 | 6,000 | |
| £32,001+ | 2,172 | 0 | 4,500 | 4,500 | |
| Total Independent | 20,718 | ||||
| Total | 119,488 |
The Herald reports that the Scottish Government has agreed to find the extra £7 million colleges have reported they need, in order to meet demand for bursaries for students in further education.
Students on higher education courses in FE colleges (almost all at Higher National Certificate and Diploma or equivalent level) fall within the national scheme of student support run by SAAS. Those on further education courses don’t. They depend on funds which the Scottish Funding Council parcels out to colleges, who then administer them, with the possibility that the cash will run out if demand is higher than expected. This is what appeared to be about to happen.
Demand has reportedly risen by 15% since 2011-12. This isn’t very surprising. The recent college performance indicators confirmed that college provision is increasingly shifting towards younger, full-time students, in response to direction from the government that this is what it wants. As the new Cabinet Secretary, Angela Constance MSP, explained:
In the last few years, colleges have successfully targeted our priority groups, which has increased the cost of student support.
This shift was always likely to push up the pressure for living cost support: full-time students are by definition less available for work and therefore likely to be more dependent on the state. The more the system goes this way, the heavier the pressure on FE bursary funds is likely to become. That was a predictable effect and it is reasonable to expect the government to plan for it.
So the reaction of NUS Scotland, and opposition parties, that the increase is welcome but only a short-term fix looks right.
The problem is that the long-term fix doesn’t look too easy. In order to protect spending elsewhere, the Scottish Government has already taken £36 million out of grants in higher education, a 40% cut which leaves total spending on HE grants at just over £50 million, half the budget for FE bursaries, which now exceeds £100 million.
As a group, students in higher education now rely on loans for nearly 90% of their living cost support. In theory, the Scottish government could afford to spend even more on loans, because it gets a much larger Barnett consequential for lending costs than it needs – because it has no high-fee system to prop up. Could it use some of this headroom to help out students in FE? As far as I know, the current Scottish government has never argued that low income students in HE should get loan instead of grant towards their living costs because of their potential future “earnings premium”. It has simply asserted that loan allows it to make public money go further. In 2012, NUS Scotland embraced this argument enthusiastically for HE students and added its own twist – that public debt is better than commercial debt. Such arguments could be made equally well for students in FE.
In England, student loans are used in a limited way for FE students under the “24+ Advanced Learning” scheme: this only covers course-related costs, however, not living costs and is limited to £300.
Ironically, if loans were extended to FE students, Scotland would find itself in a situation where the group of full-time students likeliest to emerge from tertiary education owing the state little or no money would be those from better off households, who are disproportionately likely in turn to have done a degree – pretty much the group for which earnings premium arguments can be most convinvingly made. That would be an interesting outcome to defend.The current position, under which government lending to students is already skewed towards those from poorer households, is interesting enough.
Whether there is any appetite in Scotland for extending loans into FE is a different question and hard to tell: no-one is saying, if so.
The other story today – which may or may not be related – is that the Scottish government has asked the SFC not to distribute £21 million of funding previously earmarked for university research. The Herald records that:
a Scottish Government spokesman said the decision had been taken to give ministers more flexibility over budget priorities throughout the year.
He said: “The Scottish Government will be providing over a billion pounds in funding in 2015/16, having invested more than £7 billion in higher education since 2007.
“Next year our overall provision of funds for Post 16 education and training will rise, reflecting our commitment to new education and training facilities and the reforms that are part of Developing Scotland’s Young Workforce.
“As expenditure can vary in the course of the year, we have asked the funding council not to allocate their budget for next year in its entirety in the first instance, as was made clear last year. This provides flexibility going forward to align resources where needed across our funding for post-16 education.”
It was already unclear how the government was planning to cope with a cash-flat budget for student grant and fees in HE, when student numbers are rising. Now we see the pressures in FE. It’s hard to avoid wondering how these various stories may join up.
The maths underlying the higher and further education budgets has looked challenging for a while. The job of making it all add up inherited by the new Cabinet Secretary isn’t enviable.
Interviewed in yesterday’s Guardian, Julie Walters was worried that young people from working class backgrounds had less opportunity to train as actors, compared to the 1960’s and 70’s. She said:
People like me wouldn’t have been able go to college today. I could because I got a full grant.
This is a very rare sighting of someone raising the question of living cost support, not fees, as the critical issue for students from low-income homes. Hoorah for Walters.
It’s less clear whether she would be right to believe that either the value of living cost support is lower than when she was a student or that working class students are deterred by the fact that grant only accounts for part of this.
- The real value of living cost support is now higher than in the 1970’s, due to the padding out of student grant with loan. This House of Commons briefing note includes a table which shows how the value of support has changed over the years (later years of data apply to England only): see page 10. Students are however now largely excluded from the benefits system: if the loss of housing benefit and the ability to sign on in the vacations was taken into account, the difference might well be smaller than it looks, or non-existent.
- As far as we can tell from the evidence (see here for example), young students are pretty neutral in the short-term about whether their living cost comes as grant or loan and indeed do not seem to be deterred in practice by (though they may be very unhappy about) quite large amounts of debt, for living costs or fees. Participation rates among young people from working class backgrounds are at a historic high in all parts of the UK.
Walters’ comments, and similar ones from others, have attracted some criticism. Colleges have argued that they have a good record of recruiting young people from poorer backgrounds. They suggest the real problem for those coming from backgrounds without money is what happens after students graduate, given the financial pressure and insecurity young actors face. And here Walters’ point about lower grant, and by implication higher debt, may have more force – and there’s a Scottish twist or two.
First, we know that Scotland’s unusually low grant system means that, uniquely in the UK, those who start from poorer backgrounds are likelier to leave university in Scotland with higher debts. They will also start paying back their debts sooner than counterparts from England or Wales, because the repayment threshold is lower here.
Second, there are two institutions providing free-tuition undergraduate drama courses in Scotland. The Principal of one of these, the Royal Scottish Conservatoire, has recently worried aloud about the effects of capping on their ability to recruit Scots (though more in music than drama). If low-income would-be actors from Scotland find themselves going over the border to get a place, they are faced with the double-lock of high rUK fees and low-grant Scottish living cost support. Thus they face leaving college with exceptionally high levels of debt, even compared to their English peers.
It’s also the case that in Scotland the specialist institutions – which include RCS – perform relatively badly on participation by students from deprived areas compared to other types of higher education institutions, with figures at or below the level of the ancient universities: see Table H here.
Also, prospective students from England interviewed by the Guardian were worried about the cost of living in London, which has a high concentration of the UK’s drama schools. That’s an even bigger issue for Scots, who uniquely no longer get any extra help with living costs for London-based courses
And in all this lies the point of interest for those looking at this from a Scottish perspective. If there is anywhere in the UK where the medium-to-long-term financial consequences of going into acting – or any other insecure, poorly-paid line of work – look distinctly more difficult for those from low income backgrounds compared to everyone else, it is likely to be Scotland, due to our limited use of grant and lower repayment threshold. Julie has a point.
At the time of writing, the student support figures for England, Wales and Northern Ireland for 2015-16 are available, while those for Scotland are still to be announced.
England, Northern Ireland and Wales
Main points
- In all three countries, grant thresholds and maximum grant rates will be frozen in 2015-16.
- Loans will be frozen in Northern Ireland.
- Living cost loans will rise in England and in Wales, so that total support for the poorest students will rise by 2.5% and 2.2% respectively.
- Total living cost support (ie loan plus grant) remains highest in Wales, where the maximum, available to those at the lowest incomes, is now just below £8,000 a year.
- Thresholds for maximum grant (and maximum total support) and for the point at which grant runs out will have been frozen for at least three years in all three countries.
The table further down contains figures for grant and loan next year.
Scotland
In Scotland this year (2014-15) grants and thresholds have been frozen since last year, after cuts to both in 2013-14.
The announcement of 2015-16 figures will now be relatively late (as this post explains). It is very unusual for students and prospective students not to have this information by Christmas.
The Scottish Government’s draft budget published last autumn (linked here) contained this promise to:
continue to deliver on our commitment to support the poorest students with a minimum income guarantee of £7,500 per year in maintenance support and to keeping higher education free for Scottish domiciled students
That appears to imply a freeze in total support at the same level as in 2014-15.
In its submission on the draft budget (linked here) NUS Scotland argued that:
For students in higher education, we need to see continued increases in support as a whole, and for the poorest students particularly we need to see that through grants rather than loans.
The delay may reflect some sort of discussions continuing behind the scenes (that would explain NUS’s lack of public complaint about the absence of information), or new Ministers taking the chance to take stock more generally. The draft budget (again, see here) left no obvious room to increase grants, given that it included a small reduction in the combined funding for fees and grants – and fee costs are surely due to rise further, with rising numbers of students seeming likely to be entitled, from Scotland and the EU. Meeting NUS’s request would be difficult, even if the government is sympathetic.
A complicating factor may be that the NUS is also lobbying for increased investment in grants for FE students, who are dealt with under separate arrangements.
Figures in comparison
The table below shows the position for those at the lowest incomes, entitled to the maximum amount of grant and largest amount of support. Some students at higher incomes will be entitled to more loan, but less overall support, because they get less or no grant.
The income thresholds for maximum support next year will be unchanged: £16,999 (Scotland); £18,370 (Wales; £19,203 (Northern Ireland); and £25,000 (England).
The table compares grants and loans, and the combined total of these, in 2015-16. The loan and total figures are for students living away from home outside London: for students from England, Northern Ireland and Wales lower figures apply to students who live at home, and higher ones to those who study away from home in London. Scotland currently applies the same figures to all students. Grants are unaffected by where students study or live.
The table includes for comparison indicative figures showing the position for Scotland if, as the draft budget implies, the 2014-15 arrangements are repeated in 2015-16 but these Scottish figures should not to be relied on.
| A | B | A+B | ||
| Max grant | Loan at lowest incomes | Max total (grant plus loan) | ||
| £ | £ | £ | ||
| England | 3,387 | 4,047 | 7,434 | |
| Northern Ireland | 3,475 | 2,953 | 6,428 | |
| Scotland (est) | Young | 1,750 | 5,750 | 7,500 |
| (if 2015-16 = 2014-15) | Mature | 750 | 6,750 | 7,500 |
| Wales | 5,161 | 2,796 | 7,957 |
Sources: Official student finance on-line calculators for England, Northern Ireland and Wales.
Two separate posts, to follow, give further context.
The first will look at how total maximum support has changed across the UK over the past decade and, within that, what has happened with grant and loan. This shows that grant rates have been gradually frozen, and more rarely cut, at different points in recent years. Unless Scotland increases grants, these will have been frozen in all parts of the UK for 2015-16: since 2012-13 in Wales, 2013-14 in Scotland, 2014-15 in England and, in the longest case, since 2010-11 in Northern Ireland. Total support will have risen in real terms over the five years to 2015-16 in all parts of the UK except Northern Ireland, where it will have fallen.
The second will look at the even more complex way in which thresholds for grants have become frozen over time. By 2015-16, these will have been frozen since at least 2013-14 in every part of the UK, and sometimes rather longer, again unless Scotland announces any change. Scotland is the only country to have reduced the cash value of thresholds in recent years. There may therefore be behind the scenes pressure on the Scottish Government to reverse this, but there has been no public campaigning.
Last month the SLC published the latest figures for all forms of student support spending in 2013-14 in England, Northern Ireland and Wales. The equivalent Scottish figures were published a month earlier.
As this earlier post noted, spending on Disabled Students Allowance (DSA) in Scotland appears to have settled for now at the new, lower level established in 2012-13.
The new figures from the SLC on DSA are final for 2013-14 for Northern Ireland and near-final for England and for Wales. They show that as in 2012-13, England and Wales are spending significantly more on DSA than Scotland or Northern Ireland.
On trends, the numbers claiming and the amounts claimed rose most in England and Wales, with the average value of a claim falling slightly in England and remaining unchanged in Wales. In Northern Ireland, the numbers claiming and the amount claimed both fell: the average fell slightly. In Scotland numbers claiming rose, and the amount claimed rose less quickly, giving the same fall in the average as in England.
| Nos claiming (000’s) | Amount claimed (£m) | |||
| 2013-14 | Change from previous year | 2013-14 | Change from previous year | |
| England | 58.5 | 6.50% | 126.1 | 5.10% |
| NI | 1.6 | -6% | 2.8 | -6.70% |
| Scotland | 4 | 5.40% | 7.7 | 3.40% |
| Wales | 3.3 | 6.50% | 8.1 | 6.60% |
In absolute value, the averages for Wales remains the highest, followed by England, then Scotland and then Northern Ireland.
| Average | ||
| 2013-14 | Change from previous year | |
| England | 2156 | -1.90% |
| NI | 1750 | -0.80% |
| Scotland | 1815 | -1.90% |
| Wales | 2455 | 0% |
In Wales and England 5% of all students claimed DSA. In Scotland and Northern Ireland the figure was 3%. Lower average payments and low proportions of students claiming mean that spending on DSA in Scotland and Northern Ireland is worth around half that in England or Wales, pro rata the size of student body. This is much the same pattern as last year.
| Total students receiving any support(000s) | % claiming DSA | Value of DSA per head of whole student population (£) | |
| England | 1160.8 | 5 | 109 |
| NI | 51.3 | 3 | 55 |
| Scotland | 137.3 | 3 | 53 |
| Wales | 64.4 | 5 | 126 |
Very early figures provided for 2014 for England and Wales suggest that claimants are significantly higher in both nations than at the same point last year (12% and more than double, respectively). Though spending is also higher (6% and 33%), it has not risen as fast. However, these figures normally represent a relatively small share of the final numbers and so have to be treated with considerable caution.
Cuts to DSA were due in England in 2015-16, but have been put back a year. So for the moment, Wales and England seem likely to remain well ahead of the other two nations in the scale of their investment in DSA.
It’s exactly once month since Alex Salmond unveiled the now-famous stone outside Heriot-Watt University on his last day in office. In doing so, he revealed not just a splendidly unmelted piece of rock, but also a startlingly loose grasp of the effects of policy over his period in government and particularly in the budget he and his Cabinet colleagues agreed for 2013-14.
After declaring that free tuition was now “a commitment writ in stane”, he told one newspaper:
As somebody who had a modest upbringing in a council scheme in Linlithgow, whose parents in an atmosphere of both free education and full grant, scrimped and saved to send four children to university, I know what a challenge and what would have happened with the imposition of large debt to people like myself.
Yet over the past seven years, in real terms student borrowing has doubled, including for poorer students, while spending on grants has almost halved.
Alex Salmond’s full grant would have been worth a little over £5,000 at current prices. As a result of changes introduced in 2013, those young Scottish students who are entitled to the full grant now receive just one-third of that, £1,750. They are expected to borrow the rest of their living cost support, which means taking out an annual loan of £5,750 to gain access to the Scottish government’s “minimum income guarantee”, implying a debt of £23,000 over four years. For mature students, with their lower grant, it’s £6,750/£27,000. That’s around half what applies in England but not very different to the figures for Wales or Northern Ireland – indeed, in practice, new data strongly suggests that at low incomes Welsh students are now borrowing substantially less than Scots over the course of a typical degree (despite paying fees).
If the former First Minister still believes, as he did in 2007, that “10, 15, 20,000 pounds of student debt” is an “enormous debt burden”, his comment suggests that he did not understand, or at best had forgotten by last month, the impact of his own government’s 2013-14 budget. That saw a large shift towards reliance on student loans to provide assistance with living costs, driven in part by a 40% reduction in spending on grants. Student borrowing rose by 69% between 2012-13 and 2013-14.
If the rocks will melt with the sun before Scotland introduces tuition fees, it seems equally possible that a’ the seas will gang dry before the architects of Scotland’s current system for student funding will acknowledge, perhaps even to themselves, that like those in the rest of the UK it too is built on a rapidly growing amount of student debt. In our case, uniquely, this is being shouldered disproportionately by the poorest, because we make so much less use of means-tested grants than elsewhere, not just in the UK but in Europe.
Perhaps, in the spirit of science, a member of the University Court will propose a companion stone to the one Heriot-Watt now has, with the most recently-issued statistics on actual grant and debt for the former First Minister’s term in office, which are, all at 2013-14 prices:
| 2006-07 | 2013-14 | Real terms change | |||
| £m | £m | £m | % | ||
| Actual student borrowing | 211.5 | 425.9 | 214.4 | 101% | |
| Total expenditure on non-repayable grants | 120.6 | 64.9 | -55.7 | -46% | |
| of which Young Students Bursary (YSB) | 78.3 | 40.6 | -37.7 | -48% | |
| £ | £ | £ | |||
| Average borrowing | 2708 | 5020 | 2,312 | 85% | |
| Average borrowing at incomes entitled to max grant | n/a | 5610 | |||
| Average YSB grant claim | 2244 | 1225 | -1,019 | -45% | |
| Number of students receiving YSB | 34,875 | 33,155 | -1,720 | -5% | |
Meantime, Heriot Watt’s new monument surely deserves a name, so it can take its proper place amongst Scotland’s growing collection of politically important rocks, real and metaphorical.
The Stone of Turning A Blind Eye To The Way Student Debt Has Doubled And Is Skewed Towards The Poor isn’t very catchy.
Maybe it could just be the Stane O’ Debt Denied, for short.
Further notes to table
Actual student borrowing shown is the amount students borrowed from the Student Loans Company in each year.
Total grant spending covers all forms of grant. Over the period, the separate grant for travel (£20.6m cash value in its final year, 2010-11) was abolished, while a new national grant for mature students (the Independent Student Bursary, worth £12.6m last year) was introduced. YSB values were reduced significantly in 2013-14.
Average borrowing shown is the average amount per active borrower. The figure shown here will underestimate average borrowing at the lowest incomes, as it excludes figures for the majority of mature students, assessed as nil income. These have been combined in the latest figures into a single category with a much lower-debt group seeking no means-tested support.
Comparing maximum grant obscures that grant is now withdrawn more quickly as income rises, falling in a single step to £1,000 at incomes of £17,000 and again to £500 at £24,000. In 2006-07, at an income of £21,400 (worth £25,000 at current prices) YSB would have been worth around £2,100, four times what it is worth now.
The falling number of students receiving YSB has occurred in the context of the total number of Scottish domiciled students supported by SAAS rising by 10% over the period. Also, YSB numbers should have been boosted in 2013 by the transfer into YSB of young students previously on the Student Outside Scotland and Health Directorate bursary schemes, which were abolished last year. Progress in widening access might also have been expected to have increased the numbers claiming YSB. The reasons behind the fall in YSB claimants would bear further investigation.
Including the current year 2014-15, the maximum total value of support available to students at the lowest incomes has increased in real terms over the period by just under 30% in 2014-15 prices, from around £5,800 to £7,500. However, these students now need to borrow twice as much as before in real terms to obtain that support, while the grant component of the package has fallen in real terms by 60%, from £2,940 in 2006-07 at current prices to £1,750 now. The increase in spending power has therefore come at the cost of a much sharper increase in debt, because grant has been not just frozen, but cut.
Table A6 in the most recent statistics allows loan take up to be calculated as 78% for those with a known income between £0 and £33,999. This however excludes take-up by those deemed to be “exempt from contributions” (mainly mature students): these are now counted with a better-off group who provide no income details because they are not interested in seeking any means-tested support. In 2012-13 the exempt group had 88% loan take up. Average take-up is 70%, implying that students from homes with incomes at £34,000 and above are not only borrowing less on average, but also significantly less likely to borrow than those from lower-income homes.
Sources
Grant rates in 1970’s from this House of Commons briefing note (figures are provided for England, but the systems across the UK were very similar at that point). Information on the income threshold for the full grant at that time is not available. It is now £16,999 in Scotland, the lowest figure in the UK.
2006-07 borrowing and grant spending totals from the official statistics for that year. Average figures for YSB claims and borrowing derived by author.
2006-07 grant rates from the official guide to students for that year.
Conversion of 2006-07 figures to 2013-14 prices using GDP deflators
2013-14 figures from most recent official statistics. Figure for average grant claim derived by author. Entitlements to YSB from the SAAS website. Figures for actual spending and borrowing not available for 2014-15.
At the end of last month, the Student Loans Company published the student borrowing figures for 2013-14 for students from England, Northern Ireland and Wales. Scottish figures came out in October. This makes it possible to compare for the first time the figures for actual borrowing in every part of the UK in the last academic year. This produces results in line with what looking at the models on paper predicted.
The figures show that within the UK, as a result of Scotland adopting its new, low grant system last year, students from Wales have now overtaken those from Scotland as the ones set to finish their degrees with the lowest average borrowing in practice. The figures for those from Scotland and Northern Ireland are slightly higher.
Moreover, combining these figures with other data suggests that in practice low income Welsh students are now set to be leaving their degree course with around 70% of the debt of the same students in Scotland.
Borrowing levels in England remain higher and the gap between England and the devolved nations will increase. In practice, average annual borrowing in Scotland looks set to be just under half that in England.
Comparison between Scotland and the other devolved administrations
| NI | Scotland | Wales | ||
| Average annual borrowing | 6460 | 5020 | 6240 | |
Average annual borrowing Scotland is still lower than elsewhere, now standing at around 80% of the figures for Wales and Northern Ireland.
However, take into account that degree students generally need to spend a year more studying in Scotland, and the implied average borrowing in Scotland for a typical degree is now around 8% higher than in Wales, and only a couple of percentage points lower than in Northern Ireland. (The Northern Irish figure below has been increased by slightly more than three times, see technical note 1 below).
| NI(3yrs) | Scotland(4 yrs) | Wales(3 yrs) | ||
| Implied average degree-length debt | 20790 | 20080 | 18720 | |
Moreover, these are averages. We know from recently published SAAS data that in Scotland those at low incomes borrow above average: in 2013-14 borrowers who claimed the means-tested loan, who must all be from low incomes, borrowed on average £5,780, 15% above the overall average (see technical note 2 below). Conversely, data supplied by the SLC last year showed that in the other devolved administrations those from low incomes borrowed below the average – around 80% to 90% of the figure in Wales and 90% to 95% in Northern Ireland (see technical note 3).
So at the lowest incomes, the implied average amount of borrowing for a typical degree in Scotland is £23,120 (four times £5,780). In Wales it can be cautiously predicted to be 90% of the figure of £18,720 above: £16,600, or around 70% of the Scottish figure.
What’s more, such students from Wales living away from home benefit from a more generous total package of support – that is, this lower borrowing was still providing this group with between £500 and £1,000 more a year to spend: see figure F here. Those living at home mostly have more to spend in Scotland – but at low incomes the gap is not so large.
These figures exclude interest. Interest rates are the same in Scotland and Northern Ireland. In Wales they are higher, but the Welsh government currently undertakes to write off the first £1,500 of student loans on completion, which has the effect of cancelling out the effect of the higher interest charged. So the figures above are reliably comparable.
England
England predictably has the highest figures.
Average actual borrowing in England has risen by £2,800 in total since the new fee regime came in. In 2011-12, it was £6,330. In 2012-13 (around one-third of students under new system) it increased by £1,570 to £7,900. The next year, 2013-14 (two-thirds under the new system) it rose by £1,230 to £9,130. This reflects that the fee maximum rose by some £4,500: the rise is coming in roughly a third at a time. The impact of the complex system of local fee waivers and bursaries, and the existence of courses with fees below £9,000, may also be showing here: average borrowing for fees among those under the new system was £8,110 last year and is currently running at £8,160.
This all means that the Scottish actual average borrowing figure was around 55% of that for England last year. Once the English system is fully rolled out, Scottish average annual borrowing looks set to be around 45% of that in England. Total actual debt for Scots at low incomes completing a degree in Scotland looks likely to be around 60% of the equivalent actual English figure (£38,000 approx, after adjusting for the higher interest rate applied in England).
Other factors to consider
These comparisons do not take into account that the loan scheme used for students from England and from Wales, as well as using higher interest rates, also collects repayments more gradually, at 9% of income over £21,000: Scotland and Northern Ireland use £17,000. Debt is also written off after 30 years rather than 35 (used only in Scotland). So more of this higher debt in England, in particular, is likely to be written off in practice. That is problematic from a public finance perspective, but does mean that differences in headline debt will not necessarily translate into a similar level in differences in repayments, particularly for relatively low earners.
These figures are for actual borrowers. In Scotland some 30% of students are non-borrowers, compared to around 10% in other parts of the UK. If actual borrowing figures were calculated as an average across the whole student population, the Scottish average would fall most from the figures above. However, as non-borrowers come mainly from high income homes, doing this calculation would also reveal an even larger gap in borrowing between low and high income students in Scotland than is shown below. For now, looking at the published figures provides a fair account of how systems compare for those who actually use them, who in all parts of the UK make up a comfortable majority of students, particularly at low incomes.
Technical notes
1 Around 30% of NI students go to England or Scotland to study, where they are liable for fees of up to £9,000. This means that the 2013-14 figures for NI will not yet fully reflect the impact of the fee rise on students from there. However, the effect of Year 3 of the new regime on the figures looks likely to be quite small. Over the first two years, average borrowing by NI students rose by only £460-470 pa and a further increase of that sorts therefore looks likely. As noted above the total rise in the fee cap was £4,500, and it affects less than one-third of NI students, so a total rise in the average over the period of £1,500 makes sense. Unlike the SLC figures, Scottish published average figures above exclude borrowing for fees by Scottish students going south. This group accounts for less than 5% of SAAS-supported students, however, so their effect on the average would be small: from the SAAS figures it would have added around £150 in 2013-14.
2 These figures come from Table A11 of the latest SAAS statistics. All those claiming the means-tested loan must by definition be from homes with incomes below £34,000. Some of those claiming the lower rate loan may also be from lower income backgrounds, but choosing not to borrow the maximum they could. However, these are likely to a relatively small proportion of the group, based on comparison with other data provided by SAAS on income and numbers of grant claimants.
3 This conclusion can be drawn from the figures discussed here. It may be possible at some point to get the 2013-14 figures by income for other parts of the UK, in which case these estimates could be updated.
The Scottish Government’s Health Secretary, Alex Neil MSP, announced today a review of the separate funding arrangement for student nurses and midwives.
The news release states the review’s aim is “ensuring that the process continues to be fair and reflects the needs of today’s students”.
Alex Neil is quoted as saying: “Scotland’s support package for nursing and midwifery students remains distinctive – the core bursary is not means tested or repayable – in stark contrast to the position in England. Though we believe we offer a good package for students, it is extremely important that nursing and midwifery continues to be an attractive area of study for our Scottish students. We understand that much of this depends on the support we have in place for those studying. Our intention this year is to review the funding package available to nursing and midwifery students, to ensure that it continues to meet the needs of Scottish nursing and midwifery students.”
The announcement comes ahead of the publication of any detailed proposals and follows a story run yesterday in The Nursing Times. The rhetoric is pretty vague, but the language makes more sense when the detail of the current scheme is compared with the mainstream student support arrangements and set against the nature of complaints about the current scheme.
The nursing and midwifery scheme is very different from those for other students, involving no loan and no means-testing: it operates more like a proxy pay scheme. Equally, however, the maximum value of what is on offer is now a little below the £7,500 combined sum of loan and grant available to the poorest students at university. The Nursing Times reports that a Scottish student has set up a petition seeking a significant increase in the value of the bursary and that Unison is campaigning across the UK (similar schemes operate in all parts) for an increase to £11,475 per year for students outside of London, with the Unison Scotland regional organiser Matt McLaughlin calling the current bursary of £6,578 per year for students in Scotland “grossly unfair” and explaining that the union has a longstanding campaign policy that “student nurses should be paid what we call a living bursary”.
The total cost of the current arrangements in 2012-13, the latest year for which figures are available, was £68m, for 8,755 students: see Table 5.1 and Figure 5.1 in the most recent statistics Student support statistics Scotland 2013-14. That is now more than the combined value of the Young Students and Independent Students Bursaries, collectively now worth only £53m and covering some 50,560 students.
According the the news release, currently the Nursing and Midwifery Student Bursary (NMSB) in Scotland provides all eligible students with a non-income assessed and non-repayable personal allowance of £6,578 per year (excluding additional allowances). According to the SAAS figures, the average award in 2012-13 before additional allowances was higher, at £6,990, and including allowances £7,860. This means that students on NMSB scheme are receiving around seven times as much support in cash than most other students. Indeed, given that many of this group are mature students, the real difference is more likely to 9 to 10 times as much, compared to the Independent Student Bursary of £750. Equally, however, they have no access to loan to top up their grant.
The Scottish Government of course has access to far more student loan than it can use, as a result of the Barnett consequentials of the English tuition fee arrangements, but is very short of cash.
Concerns about damaging the supply of nurses and midwives will be a real issue here and the professional bodies concerned may be less easily persuaded than was the NUS about the benefits of a major shift to loans. So it is hard to believe that placing this group onto the same support as other students have is a likely outcome.
However, some travel in that direction, sweetened by a loan-enabled decent increase in the total value of upfront support, must surely be at least one possibility, if the Scottish Government wants to use this to make any savings in the cash budget while also addressing anxiety about the total amount students are given to live on. Certainly the wording of the ministerial statement is open-ended enough not to rule that out. Although the press released includes a barbed reference to England, that model is surely being quoted as a reminder of how exceptional the Scottish scheme now is on any comparator. Details of the English scheme are here. It involves full payment of fees and a means-tested grant and a loan. For those on 30 week courses its total value is lower than mainstream English student support or the Scottish NMSB; for those on 45 week courses it appears to have a higher total value, though of course it is in part repayable.
A review of the analogous scheme in Northern Ireland in 2012 led to a slight reduction in the main grant and some cuts also to associated grants, but not a major redesign. The Welsh scheme has moved to means-testing and also involves loans, and like England can provide more upfront support than Scotland (although at first sight, still a lower total value package than Welsh mainstream students can get).
The chance of any cash savings which might be made here being recycled into the SAAS budget to restore the large cuts made to mainstream student grants last year are low. Although administered by SAAS, this scheme sits in the budget of the Health Directorate. Indeed, it may be that any cuts to grants will be made more palatable by promises to re-invest savings elsewhere in activities of interest to the relevant professional groups.
However this unfolds, it’s an interesting development, given the way in which student grants have been falling out of favour in Scotland over a number of years. The question is whether this arrangement will continue to be perceived and treated as, in effect, analogous to pay or will become more closely assimilated into student support.
Scottish government statistics published last week on student support include new figures for spending on Disabled Students Allowance in 2013-14 (Student support statistics Scotland 2013-14: tables A8 and A9 give the headline figures for grants, including DSA).
Spending appears to be settling around the new lower level established in 2012-13, though there was a small real terms rise year-on-year. The fall in claimant numbers has reversed more strongly, meaning that the fall in the value of the average claim has continued.
Total spending
Last year’s statistics showed that spending on DSA in Scotland had fallen between 2011-12 and 2012-13, from £9.022m to £7.487m, just under 20% in real terms.
The 2013-14 figures show a year-on-year increase in total spending, from £7.487m to £7.741m. That is 3.4% in cash terms or around 1.6% in real terms.
Claimants
In 2012-13, the number of claimants fell for the first time in many years, by 466 or just over 10%, to 4,029.
In 2013-14, claimant numbers rose by almost 6%, to 4,265, taking them back up to their 2009-10 level.
Average claim
The cash value of the average claim between 2012-13 and 2013-14 has continued to fall, in line with the long-term trend, from £1,858 to £1,815, which is a 4% decrease in real terms.
Statistics from the Student Loans Company due out later this month for other parts of the UK will show how average payments compare across the UK. In 2012-13, the average was higher in Scotland than Northern Ireland but below that in England and, even more, Wales, which in 2012-13 had the highest figure at £2,452.
Long-term trends
This graph DSA Scotland graph Nov 2014 shows trends over the past decade, using real terms values for spending. The past two years show the lowest figures for spending, generally by some margin. Real terms spending on DSA was last lower in 2003-04 when it stood at £6,932 in current prices before travel (compared to £7,040 before travel in 2012-13).
Since 2003-04 the total number of students receiving support from the Student Awards Agency for Scotland has risen by around 14% (the number of DSA claimants has increased by 77%).
Note: General travel grant was abolished in Scotland in 2011-12 and travel costs incorporated into DSA. The impact of this on comparisons over the period is discussed further in the note to the graph.
Types of claim
Detailed information by disability is provided in table A13 of the recent statistics. Dyslexia and “other” remain the two largest categories. Over recent years spending and claimant numbers for dyslexia have fallen and then recovered in a similar way to to the total: “other” has seen annual increases both in claims and spend. Other disabilities accounting for much smaller numbers show a variety of patterns.
Comment
In the absence of any announced change to policy, it remains unclear what has caused the sudden – and now sustained – reduction in spending on DSA in Scotland.
The Scottish Government does not hold data on claims refused, so it is not possible to tell how far the fall may be due to students being refused support centrally. This lack of data may reflect the nature of the DSA process itself, which includes a local gatekeeper role for those in direct contact with applicants. That leaves open the possibility that local advisers themselves have for some reason recently been discouraging more claims or promoting lower value ones. The Scottish Government has pointed to changes in technology, and “mainstreaming” being likely to reduce the potential cost of, and even need for, extra support. This is plausible: but it is still not clear why that should have had such a strong, sudden effect in 2012-13 or why that should have happened in Scotland that year but not in other parts of the UK.
Moreover, given the impact of disability legislation in the education system as a whole over the last decade, together with general growth in student numbers, we might have expected a fall in equipment cost to have been off-set over the long-term by more young people with a variety of disabilities, not least the more complex and expensive ones, coming successfully through school to study in higher education. To the list of reasons for higher spending here could also be added the announcement in 2009 of a widening of the scope of DSA payments. More recently, the large fall in the value of student grants in Scotland in 2013-14 might have been expected to push up claims last year, given that there is good evidence that DSA is claimed disproportionately by those at lower incomes.
The drop in Scottish DSA spending still looks like it deserves more explanation.
Note: Real terms figures have been calculated using the most recent set of Treasury deflators.
The past fortnight has seen the most extensive coverage of Scottish student grants in the past two years, with references to the issue in the annual report produced by the Social Mobility and Child Poverty Commission, new comparative data from the European Commission and publication of the Scottish student support statistics for 2013-14 providing figures for the first time on the full impact of the change.
The Scottish Government has been urged to revisit its position on grants by NUS Scotland, the Association of Teachers and Lecturers and Labour and the Liberal Democrats.
Government lines reported in response concentrated on the protection of free tuition and increases in the combined value of loan plus grant, and did not directly acknowledge or defend the large reduction in grants which took effect from autumn 2013.
Although a number of broadsheet papers have run pieces on this issue, as far I can tell it has not been picked up by any of the broadcasters, tabloids or the main alternative Scottish news sites.
23 October:
(on the report of the Social Mobility and Child Poverty Commission)
24 October:
http://www.heraldscotland.com/comment/columnists/agenda.25660135
(on European comparisons)
27 October
(on both the above and picking up other figures from this site)
28 October
http://www.theguardian.com/education/2014/oct/28/scottish-student-borrowing-soars-record-levels
(on the 2013-14 statistics)
1 November
http://www.heraldscotland.com/news/education/poorest-students-up-to-840-a-year-worse-off.25748537
(on the 2013-14 statistics)
Absolutely central to the Scottish Government’s explanation and defence of its approach to student funding is that it based on “ability to learn, not ability to pay”. These exact words are used repeatedly, indeed almost inevitably, by the government whenever any aspect of student funding is being discussed and have been now for some years.
So when the latest edition of the annual statistics on student support, produced by the Student Awards Agency for Scotland, states in its opening paragraphs that:
The main work of the Agency is to assess and pay student financial support in line with the Scottish Government policy of fair access to Higher Education based upon ability to succeed [emphasis added] rather than ability to pay.
the change in wording stands out and must surely be deliberate.
How does ability to succeed differ from ability to learn? There is an implication that ability to learn by itself is not enough: the learning must be expected to be “successful”. Indeed, in many ways this is a truer statement of the situation. Presumably plenty of people who are refused a university place and therefore access to government funding still have the ability to learn, including in some level and type of HE. But they have been deemed either too unlikely to succeed on the particular course(s) to which they have applied or at least less likely than other applicants.
At first sight, it’s a small point. But “ability to learn” is so central to the government line, that it’s impossible not to wonder whether this shift in wording signals a localised desire for a different formulation, or suggests some broader debate within government or with those in HE about whether the system really can be described accurately as being based on ability to learn.
Given that, as this earlier post argues, the “ability to pay” half of the line is already strongly open to question, any debate about the other half would be an interesting proposition.
The accompanying Scottish Government news release , it should be said, sticks with ability to learn.
A further post on the 2013-14 student support statistics, now available.
The report is here and the data tables (easier to interrogate) are here Student support statistics Scotland 2013-14. The statistical news release is here and the ministerial news release is here.
This first post on these statistics looked at the position on the main means-tested grants. This one considers loans. Tables A1 and A6 are the sources for the figures quoted below. All figures are given in cash.
Total borrowing
Total borrowing for living costs has risen from £254.3 million in 2012-13 to £429.6 million, an increase of 69% in a single year.
This is higher than the figures reported earlier this year by the SLC, reflecting that this is the full year effect.
Average borrowing
The average amount borrowed has increased from £3,110 to £5,020, ie 61.4%. This takes average borrowing for Scottish students for a four year degree to over £20,000 for the first time. The average is now double in cash terms what it was in 2009-10 (£2,490).
It is not possible yet to see how average borrowing has changed for students at different income levels, because the data by income band has been presented in a different form from previous years. Data on a comparable basis may however become available at some point.
The report does however show some variation round the average, with the highest reported average at the lowest known income: an average of £5,610 reported at incomes up to £16,999. The lowest average of £4,340 is for the those on whom income data is held who have an income of £34,000 or above.
However, the group likely to have the highest borrowing (in effect, most mature students) has been included with the the group likely to have lowest (those above the means-test level of and seeking only the minimum loan) in a new single “income not declared/required” category. This is an odd decision, given how different these two groups are, and makes it hard to read the data as clearly as before. The average of £4,710 for this new combined group will hide significant variation between the two types of student.
It can though be roughly estimated that if the numbers and borrowing behaviour of the poorest mature students is similar to last year, then this group would have an average of a little under £6,000 while that the most well-off borrowers will have taken out bit over £4,000 per head. But the data will need to be disaggregated further before reliable figures can be given on this.
Take-up
Take-up rates have increased only slightly, from 60.3% to 62.4%.
This confirms the expectation that there would be little change in the borrowing behaviour of higher income Scots, many of whom have continued to take out no loan at all.
So it is more accurate to say that average lending continues to vary between the £0 typical for many at higher incomes and the higher amounts now faced by the poorest, which is likely to be towards £6,000 per year.
Distribution of total loan across the population by income
Particularly because of the treatment of the poorest mature students in the published data, it is not possible for now to reproduce the calculations previously discussed here, and show to what extent poorer students as a group still shoulder a disproportionate amount of all student borrowing in Scotland. The figures that we do have on average borrowing and take-up make it inevitable however that debt continues to be carried disproportionately by the poorest.
The increase in the maximum non-means-tested loan ought to have shifted the balance a bit towards the better-off, particularly if those at incomes between £34,000 and around £45,000 have taken advantage of the change as might be expected. However, the continuing evidence of much lower loan take-up generally at higher incomes means that borrowing in Scotland will remain much more biased towards the poorest in Scotland than elsewhere within the UK.
Adventures In Evidence 