Still no answers on Scottish student support

With the Forth Bridge no longer in need of constant painting, seekers of a metaphor for a seemingly never-ending task might now do worse than consider the process of reviewing student support in Scotland.

In April 2016, the SNP manifesto promised a review of student support. The review chair was announced towards the end of that year, the review reported last November and yesterday, at last, more two years after the election, the government responded. The answer: one small positive change in 2018-19, some further very modest changes in HE in 2019-20 (plus a somewhat larger one in FE), another change delayed until in 2021, and yet another review, starting in the coming academic year, together with some new research. The contrast with the urgency and sense of purpose with which the SNP entered office in 2007 and immediately abolished the graduate endowment could hardly be greater.

Yesterday in HE-olyrood

Addressing the Parliament, the Further and Higher Education Minister, Shirley-Anne Somerville stressed her focus on helping the poorest students. To the end, she promised a modest increase in the maximum value of the two means-tested grants, Young Student Bursary (YSB) and Independent Student Bursary (ISB), in 2019-20. Both will rise by £125, to £2,000 and £1,000 respectively. Unless the accompanying loan also rises, this means total maximum support will increase by 1.6% to £7,750, the first change in its value since 2015-16.

YSB will still be only around two-thirds of its real-terms value in 2012-13, when the Scottish Government applied large cuts to non-repayable support: ISB will have returned to its cash value in that year. In 2019-20, the income threshold for maximum support will also rise from £19,000 to £21,000. This will take it back almost to its pre-2013-14 level in real terms.

The Minister suggested that the increases could not happen until 2019 because “the year that is required to introduce the bursary changes is a legislative requirement”. However, in contrast to other jurisdictions in the UK, bursary rules in Scotland are set purely by administrative fiat. Indeed, in May 2015 the then Minister, Angela Constance, announced a £125 increase in YSB and ISB for the academic year 2015-16, which was successfully implemented. The decision in last autumn’s budget not to put aside any extra funding for the Student Award Agency Scotland for the current year must however have been a material constraint.

Rowing back

The Scottish government is therefore still playing catch up with its loss of attachment to student grants five years ago. When the Minister says over 30,000 people will benefit from these changes, she is also unavoidably sharing how many lost grant as a result of earlier decisions in the opposite direction. In 2013-14 grant spending was cut by around £35m. The changes just announced look likely to cost around £5-10m, on top of around £5m already put back in since the cut was made.

Changes announced to loan repayment will improve the protection for lower-earning graduates and are a clear improvement. The surprise move is that the repayment threshold will rise to £25,000, matching the new level in England and Wales. That goes beyond the manifesto commitment and the review recommendation of £22,000. This change will not take effect until April 2021, however, leaving Scottish graduates making repayments under the existing Plan 1 threshold (currently £18,330) for three more years. Five years will have passed between making a commitment and implementation.

The Minister explained the SLC was acting at the “earliest opportunity” it could, the delay reflecting practical difficulties, as “the Student Loans Company [is required] to build up an entirely different student loans package”. Yet the new system could be described with equal truth as a version of the current Plan 1 system, just with the repayment threshold increased by more than usual inflation upgrade; or the existing Plan 2 system, but plugging in a lower interest rate. The existing tax code for Plan 2 should work, at the employer end. Despite all the usual challenges of IT development, three years therefore feels like a surprisingly long lead in, not least as the intention has been around for two years already.

Other changes

There are other changes: the 100% grant for care experienced students brought in last year rises to £8,100 from 2018-19, which is a modest increase for those in HE but almost doubles the funding for those in FE. This group lost grant in 2013, but the Scottish Government is now taking its responsibilities towards those coming out of its care much more seriously, and deserves credit for that. There are also plans over the next couple of years (again, urgency is not obvious) to improve the on-line front shop for student support in Scotland, badly overdue investment and an overhaul, and to make a few other administrative changes recommended by the review.

But much is thrown back into the promised further review, which will consider “all non-core and discretionary support”, as well as what to do about part-time students, who remain without access to maintenance funding because, in the Minister’s words, the review “didn’t get round” to that. Support for carers and disabled students will also be covered.

The review recommended an increased grant in FE: here, again, the government has gone slightly further than the recommendation (a £4,500 maximum rather than £4,050), but again only from 2019-20. The review also proposed extending loans to FE students to provide further help. This “cannot and will not be ignored” the Minister said, and so further research “on demand and concerns” will be commissioned which will be available by the end of the year. The government wishes to “be able to consider this recommendation further once we have a solid evidence base to underpin that consideration”. I hope the review group do not feel too offended by that.  Their task was made harder by the Scottish government having invested little in research related to student support over the past decade, after it withdrew from the Student Income and Expenditure Survey after 2007. So it will be a challenge for anyone to produce a substantive piece of work based on new evidence in the time allowed. If FE loans are to happen, it looks unlikely to be before the academic year 2020.

Alongside all this further work there hovers like the ghost of Banquo the review’s central big idea. Borrowing loosely from the Diamond report, it recommended a £8,100 “minimum income” for all, regardless of parental income, to be achieved in HE entirely by a large extension of student loans. About that, the Minister said nothing, and side-stepped a question, repeating her focus on the poorest students. Should that be read as code for there being no plans to make any additional loan available across the income range? It certainly sounded rather like the quiet burial of the review’s principal proposal.

A regressive support offer

If so, the government still has a problem. In Scotland support in any form drops away particularly sharply as income rises. The Minister opened her statement by reiterating that Scotland has a system based on “ability to learn, not ability to pay”: she meant for fees, of course. For living costs, the contribution expected from families at lowish to middle incomes is substantial, especially if their children live away from home.

The problem is not cost. The student support review, with the government’s aid, identified that there was enough loan available to it to implement a £8,100 universal entitlement: it would mean increasing lending by up to 50%. But this stirs up another haunting presence: the SNP’s high-profile election promise in 2007 to “dump” student debt. In practice debt has doubled, and ministers have been persistently reluctant to acknowledge, much less, defend this. They could reasonably argue that they only have so much cash to spend on students and have chosen to invest it largely in fee support. Yet however much maintaining free tuition is held up as one the SNP’s great achievements, as it was again by the First Minister at the weekend and the Minister yesterday, the government has never seemed comfortable defending this as a choice against other things. Nor of course does it sit well with prioritising the poorest students.

The Scottish government’s discomfort with its recent increased use of student loan was evident even in questions after the statement. Asked what assessment the government had made of whether rising debt levels had had a negative effect on access, the Minister might have pointed to an increase in numbers from the most disadvantaged areas over the recent years. But she did not, making instead some general comments about doing everything she could to ensure “that we deliver for students who come from some of the poorer households”. Just noting that its own increased use of maintenance loan does not appear to have damaged access looks to be a problem for a government which resists tuition fee contributions on exactly that argument.

Thus, for as long as ministers cannot find a comfortable defence of loans, a large pool of funding for students in HE sits untouched and, it increasingly seems, untouchable. Meanwhile, the big money in higher education, around 90% of all the cash spent on HE undergraduates, remains locked away in universal 100% tuition fee subsidies.

There are parallels here with the post-18 review in England. The Scottish government set up a review so constrained in its terms it could only look to loans for help. Yet ministers seem to have been caught out, unenthusiastic and low on alternatives when it did. Something of the same sense of an impossible mission now hangs over the UK government’s own review. However, south of the border the pressure will be very great to make changes quickly, for good or ill. Up here in Scotland, by contrast, a government which entered office with bracing certainty about tuition fees is now into its second decade of struggling to make sense of maintenance support, and showing little sense of urgency about deciding what to do next.

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2 responses to “Still no answers on Scottish student support

  1. “The existing tax code for Plan 2 should work, at the employer end.” This isn’t correct as the Plan 2 threshold is £25,000 in 2018-19, will rise to £25,725 (i.e. by 2.9% average earnings increase) in 2019-20 and so will not be £25,000 in 2021-22 when the new Scottish threshold takes affect.

  2. Very good article. In short, SNP prioritised giving middle class Scots students a huge subsidy funded by taxpayers (basic rate 21% +1% over the rest of the UK). Nothing for maintenance and the universities can’t offer generous grants either because they don’t get enough in tuition fees. The situation is complicated by all the short courses but for a Scottish degree (which is four years, vs three year options in England and Wales, compounding the burden) the poor are: a) paying more year-on-year,b) paying more in absolute terms than affluent groups, and c) paying vastly more as a proportion of their household income.

    As for the no-end-in-sight student support review, “Our toils obscure and all that.”

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