Student grants must return – and be extended

At the National Union of Students, we’ve joined forces with Universities UK, Million Plus, University Alliance and the Association of Colleges to call for the next government to reinstate and extend non-repayable maintenance funding for all students studying a higher education qualification.

Wonkhe’s Jim Dickinson has argued that the proposed return of maintenance grants in England is a “nasty scam” for poorer students – because it could make them believe that higher education had become more affordable when in fact it would have either no immediate effect on their income during study, or bring their income down.

With so much of the sector in favour of restoring grants, the Augar Review recommending their return and two of the main parties (Labour and the Liberal Democrats) making commitments in their manifestos, it goes somewhat against the grain to question the wisdom of bringing grants back. Jim isn’t completely alone however; Ryan Shorthouse of the liberal Tory think tank Bright Blue is opposed too – albeit for mostly different reasons.

Before you roll the dice

So should the sector think again? At this stage, we don’t have enough information from any of those promising the return of the grant to judge. We need detail on the rates of grant and loan that might be available under the new system, the household income thresholds at which they would be paid, and loan repayment conditions. Without that, we just can’t say what the exact impact will be, either on immediate student incomes or over the longer term.

Of course, any reduction in cash-in-hand for students would be a Very Bad Thing. There is a risk – but when grants were restored the first time around in 2006, it wasn’t simply a resurrection of the system scrapped in 1998, and there’s no particular reason to imagine restoring them now would mean a carbon copy of the 2016 rules, even within the same broad budgets.

Do not go without me

But beyond that, restoring grants is simply the right thing to do. For a start, grants were only abolished because of an accounting trick that helped the Treasury hit its deficit targets, not to benefit students. That distortion to public policy no longer applies thanks to the ONS – but regardless, the current arrangements are an injustice.

Right now we have a system where the poorest students graduate with substantially more student loan debt than their better-off peers – it can be in excess of £15,000 more in the case of those on a three-year degree, studying away from home outside London – purely because maintenance loans are partially means-tested.

It is true that some will never have to pay any of that additional debt off, but you can also have two graduates following identical career paths and one paying less loan debt and less interest than the other solely on the basis that they were from a richer family when they were a student. It is deeply iniquitous to allow that situation to continue. If some higher earning graduates who started out from lower income backgrounds pay less than now, that’s exactly as it should be.

That’s the way it is

If there’s a choice between loans and grants (even partially) it can make a huge difference. We know from the research of Claire Callendar that many poorer students already feel they must make different decisions in order to reduce their exposure to debt. In some cases, it’s not to go into higher education at all, but in others it is choosing to study closer to home, or taking a different subject, or working longer hours. The return of grants is no panacea, but we need to do more to ensure those from working class backgrounds feel as free to choose the right path for them as middle class students. You only have to look at the impact on nursing students – and the now broad consensus that bursaries should return – to realise the impact that switching exclusively to loan maintenance can have.

We also should worry that the return of statutory maintenance funding might accelerate the decline in the availability and level of the non-repayable support which is currently available in the form of institutional bursaries. Sadly, spend in England has been declining for several years (both before and after the abolition of grants) with the not-quite-explicit encouragement of first OFFA and now the OfS who were and are sceptical of their efficacy.

In any event, as the excellent work of Gill Wyness at the UCL Institute of Education has shown, the huge variation in the availability of bursaries means it’s only a limited number of poorer students who benefit. In the more prestigious universities, many students are supported handsomely, but in other less selective institutions support is usually limited or non-existent. A lottery of non-repayable bursaries is no solution.

It is true that the system we have transfers large sums of students’ money to baby boomer landlords and PBSA investors. The NUS Poverty Commission report sets out clearly that we need urgently to address students’ costs as well as income. Working out how is much harder, though Labour’s manifesto does commit them to introducing rent controls.

As with grants, precise details are scarce, so if and how they would apply to student accommodation is unclear – but in any case, whether or not grants are restored won’t in itself address this profiteering, and some other interventions or regulation are urgently required. But if there is to be a transfer, better for poorer students that it’s more clearly the state’s money – that might just spur the politicians into action.

It’s all coming back to me now

Several writers have pointed out over the years that student finance is a “wicked issue” where solving one problem in the system creates a new set of issues to be resolved. Restoring maintenance grants demonstrates that rule as well as any proposition.

But whilst a single student finance intervention can’t be expected to fix all the issues of access and affordability, the principle that the poorest students should receive no-payable financial support is important, and hard to retrench from once (re-)established. We won’t fix every problem if grants return – but it’s no scam, and given what doing so could achieve, it’s a very good place to start.

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