Most of what we read about higher education funding in Scotland refers to tuition fees, or more precisely the absence of them. It’s great politics, but the jury is out as to how good the policy is. So, how has Jayne-Anne Gadhia’s independent review of student support fared in redressing the balance?
The report’s eye-catching headline recommendation is that students in both HE and FE should receive a the same total allowance of £8,100 a year for maintenance – a figure based on a calculation (38 weeks, 25 hours a week of study) linked to the Scottish National Living Wage of £8.45 per hour. Students’ income can be augmented by a maximum of 10 hours’ worth of work – in line with recommendations made in the Cubie Review – to make up the remainder of the 35-hour working week.
And this is deemed to be the amount of support – via loans, bursaries, benefits and other payments – that every student should be entitled to. The mixture of loans and grants will vary depending on a means test, an approach familiar in Scottish HE but new to an FE system used to a higher bursary and discretionary funding handled at college level.
Much of the detail concerns the precise split between bursaries and loans that each student could expect. Currently in Scotland each undergraduate can expect a bursary of up to £1,875 (depending on the income of their parents), and in FE the maximum amount is £3,915. Option one maintains these amounts, topping the remainder up with student maintenance loans to get to the £8,100 targets. This is revenue neutral as regards direct cost, but would notionally cost a further £252m in loans.
But the recommendation of the review is for option two: a possible 50:50 split between bursaries and loans for FE students, with the amounts for HE staying as currently. This would increase the direct cost (of bursaries) to the Scottish government by £16m each year and the notional further loan cost would fall to £231m.
Option three, raising the HE bursaries to allow the potential of a 50:50 split, would have a direct cost of £123m a year.
As you would expect, the report is keen to trumpet the lowest annual borrowing and lowest interest rate for student loans in the UK. The proposal claims to solve the issue of students from low income background graduating with the highest debt – but as students of means are not required to take up loans this is perhaps debatable.
More notably, students with outstanding FE loans would see these written off when and if they enter HE. This is aimed at increasing the number of young people taking a longer “learner journey”. There are implications here for widening participation, as those without suitable compulsory qualifications for direct HE entry are subsidised to gain these via the FE system.
Students would be offered flexibility on the way their loans and bursaries are paid – be this termly, monthly, front-loaded or split into equal instalments. And because the minimum income guarantee is clear, students are able to see their maintenance funding as a total, rather than juggling numerous amounts from numerous sources.
There’s good news after graduation too: the repayment interest rate should – it is recommended – be held at whichever is lowest between RPI or 1% above the Bank of England base rate; loans still outstanding after 30 years could be written off (down from 35 years); and we could see an increase of the repayment threshold from £17,775 to £22,000 per year – the median salary of graduates working in Scotland.
Scottish politicians are often quick to compare the funding their HE system to that of England. “Free tuition” is a totemic political position, and although students living away from home have access to slightly more per year as a maintenance loan in England, the existence of the bursary and more generous repayment terms would put the system ahead if these recommendations are accepted.
However, the issue of maintenance for part-time students has been largely ignored in both countries. The Scottish report parks the issue for further analysis by the government – meaning that we should watch the detailed response very carefully. We also note that nursing and midwifery, postgraduate and industry or institutional support have been marked out of bounds at the remit stage – likewise the thorny issue of tuition fees themselves has been roped off.
Unlike in England, some students in Scotland are eligible to claim benefits while studying – there are also a range of other payments which some students may be eligible for. While the report elegantly counts these towards the £8,100 minimum, there’s little written about the additionality of such payments. Students with – for example – a disability still have the general food and accommodation cost that other students have, but will incur additional costs for specialised equipment and support.
The £8,100 minimum is generous (in that it will cover accommodation costs in most cases, leaving plenty to spare for books, travel and food) – but it is accessed largely (at HE level) through loans. This is a significant increase in the debt that many students will hold on graduation – it is low compared to other parts of the UK, and the repayment terms are better, but it is still a burden which may not have been there before. And it is likely to fall disproportionately on students from poorer backgrounds – those with well off parents can choose not to take out loans, others do not have this option.
Numerous features of the system, in particular the very low interest rate, make this proposed system attractive to well-off students who may choose to borrow to invest, pocketing the profits and making a repayment of the full amount immediately on graduation.
Both Universities Scotland and the Scottish Funding Council (SFC) have offered a cautious welcome to the report. John Kemp at the SFC told us “Today’s report is the result of a comprehensive study of student support for both further and higher education. We look forward to working with the Scottish Government, colleges and other partners to take forward its findings.”
A Universities Scotland spokesperson told us: “We welcome the findings of the Student Support Review. From our perspective we see the overall improved package of student support for both university and college students a positive step”.
NUS Scotland offered another cautious welcome, but called for further bursaries for the poorest students.
The sheer policy detail and depth that makes the Diamond Review in Wales – a favourite of policy wonks – is missing here. The appendices concern a survey rather than economic modelling and the emphasis is firmly on presentation. The panel has sketched an outline of a way forward but it will be left to the government to contribute the detail, meaning that the clarity aimed for may still be some way off.