Maintenance grants get scrapped in new Government budget

Maintenance grants get scrapped in new Government budget


George Osborne presents the new budget – Photo:

Maintenance grants are to be eliminated from September 2016, as was announced in George Osborne’s budget on Wednesday 8 July. This is expected to affect over half a million students in England alone.

The grants, which are non-repayable sums of money intended to aid students with a household income of up to £42,620, shall instead be replaced with increased maintenance loans reaching £8,200 (this is a rise of £2,460 in potential loans for Kent students in the current system). These loans shall be repaid by students once they start earning £21,000 a year; this is in addition to repayments of tuition fees (which are currently capped at £9,000 each year).

Kent Union has declared their opposition to the abolition of the grants, stating: “We believe that these grants are often the difference between being able to access higher education or not. The government has seriously underestimated the impact of the maintenance grant and this move is incredibly unfair to students from the most deprived backgrounds. Being able to attend, study and succeed at university should always be about a student’s ability, rather than the size of their bank account.”

Maintenance grants have previously been worth up to £3,387 to students. So far, it is unclear what the repayment rate shall be under the new form of maintenance loans. It has also not yet been detailed which students can expect to be eligible for an increased loan. Currently, students living away from home and outside of London can receive a maximum of £5,740 in maintenance loans each year.

In contrast to Kent Union’s negative position, Universities UK (an organisation which Dame Julia Goodfellow, our Vice-Chancellor, shall become the President of in September) has welcomed the government’s change in policy. They have said: “Evidence has shown that students are more concerned about the level of maintenance support they receive while studying, than they are about the long-term repayment of their student loans.”

“The proposed shift from maintenance grants to loans does not in itself affect the money students receive for their living costs. It does affect the amount of money they pay back after they have graduated and are earning more than £21,000.”

Under these new changes, if a student were to attend university for three years and receive the maximum maintenance loan, they would graduate with £51,600 of debt. This figure is likely to increase, however, as Osborne also announced that the government is also looking to increase the tuition fee cap once again, after already tripling fees in 2012.

The Chancellor of the Exchequer said: “To ensure our university system is sustainable, we will consult on freezing the loan repayment threshold for five years and will link the student fee cap to inflation for those institutions that can show they offer high-quality teaching.” A figure has not yet been released, but a rise can be expected shortly.

InQuire spoke to Jack Lay, VP Education, about the possibility of a hike in tuition fees. He argued that instead of the current British system, the government should instead introduce a graduate tax as “this is the fairest way to fund Higher Education that is sustainable and doesn’t frontload debt on students”.

However, Lay continued that in this current economic climate, an increase in tuition fees in line with inflation is acceptable as, “otherwise we are going to see significant amounts of course closures, less modules and cut backs which are not good for students.”

Lay was then asked whether he thought an increase in fees in line with rising university costs would introduce a slippery slope with the potential for a tuition burden similar to that of the US system. He replied, “The previous £3,000 and £1,000 fee paying systems both went up in line with inflation every year, my brother paid £3,250 a year I think.”

“The problem is that as fees have gone up, central government funding to universities has reduced so when £9,000 fees were introduced universities had the same, and in many cases less funding than under the previous model. So as a result of costs going up every year (e.g. Staff pay, pensions, resources, building, buying resources) £9,000 is worth a lot less and there are only so many efficiencies that can be made.”

“Therefore, while I do not support tuition fees, I can understand, and on this specific issue I support increasing fees in-line with inflation.”

The newly announced Conservative government budget has undoubtedly had an impact on students across the UK with changes to maintenance grants, and is set to have an even greater effect as the government looks to raise tuition fees once more. The next few weeks are likely to produce further information on the matters and regarding the future of British universities.


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