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University Maintenance Grant Cut

Article by Jonathan Farr March 12, 2016

It is widely recognised that many students are only able to attend university with the assistance of government funded student finances. The governmental choice in 2010 to increase Tuition Fees from £3,000 to £9,000 a year, alongside this year’s new maintenance policy changes, makes going to university increasingly more expensive for our generation. Currently, students attending university have a variety of student finance options annually: a Tuition Fee Loan can pay for your course, a Maintenance Loan can help cover the cost of living and if the individual is from a lower income household, he or she can be eligible to receive up to a maximum of £3,387 in a non-repayable grant. However, new government policies have once again changed the rules for students who choose to start a degree on and after the 2016 to 2017 academic year.

With the incentive to save money, the recent governmental decision to cut Student Maintenance Grants means that all maintenance related fees will now be provided only in loans. Here are the figures for a student with a household income of £25,000 or less per year, who is entitled to the maximum funding:

Displaying Picket signs against cuts.jpg

Picket signs against cuts: © Selena. Original via Flickr/ Creative commons Attribution-Sharealike license.

 

 

 

 

 

While the books balance in funds available, this decision to cut non-repayable grants means that students starting university from the 2016 to 2017 academic year will be finishing their degree with the same amount of funding but with higher amounts to repay. Sir Peter Lampl – Chairman of the Sutton Trust and the Education Endowment Foundation (EEF) – noted that the change in policy might have an adverse effect on universities’ applicant rates of low and middle income students. He stated, ‘since grants were reintroduced, there have been significant improvements in participation from full-time less advantaged students, and this will be put at risk by today’s Budget plans’. In light of his statement and claims, it seems illogical for the government to be eradicating Maintenance Grants when they are, according to Lampl, impacting a students’ decision to gain further education.

However, the government’s decision to scrap the Maintenance Grant can only be seen as a positive move for Chancellor George Osborne. He stated, ‘to ensure universities are affordable to all students from all backgrounds we will increase the Maintenance Loan available to £8,200, the highest amount of support ever provided’. As Osborne notes, the new loan threshold is higher than it has previously been and will now provide students with, what the government accounts as, an adequate amount of money to sufficiently cover the costs of general living expenses. While the raise in the loan’s threshold may appeal to students short-term, the increase in debts after graduation is sure to act as a long-term deterrent.

Displaying Protesters against cuts.jpg

Protesters against cuts: © William Murphy. Original via Flickr/ Creative commons Attribution-Sharealike license.

Maintenance Loans are repaid when earning over £21,000, at which point 9% of an individual’s earnings is paid to the government. In regards to the new policy, Sean Coughlan notes, ‘there have also been concerns raised at the decision not to increase the repayment threshold of £21,000 with inflation, which means that, in real terms, repayments begin at a lower rate’. Through the lower repayments, students will be paying off their loans for a prolonged period of time. Taking into consideration the longer periods of repayment, it is not surprising that graduates are attempting to avoid paying their student loans all together. Conservative MP Jo Johnson has highlighted the possibility that this repayment avoidance has a negative effect on our economy: ‘as more loans are issued to new students each year, it is vital that the repayment process is robust, convenient for borrowers and working efficiently to ensure the sustainability of the student finance system and value for money for the taxpayer’.

The Conservative Party’s decision to proceed with the changes to Maintenance Grants was criticised as ‘The plan to scrap Maintenance Grants, which help half a million of the poorest students pay for university life, will go through a legislation committee… without a vote and debate on the floor of the House of Commons’. The government believes the cutting of Maintenance Grants will aid in the economy of the country, yet as they are aware of the controversy their new policy has caused, they have sought to avoid a consensus vote. It only took ninety minutes, ten Ayes and eight Noes from eighteen MPs to make the decision to scrap Maintenance Grants; those in attendance were described as ‘a committee most people have never heard of’. This poses the question: why did the government approach the scrapping of the loans in the way they did: why have eighteen MPs, who are not affected by the cuts and who are disconnected with the realities of their aid, been allowed to make a decision that will affect thousands of students across the country? Ultimately, the issues surrounding student cuts stem from the actions of the Conservative government and, specifically, the way they have implemented their decision.

However detrimental the cuts will be for students starting university in August 2016, the government are still enabling and providing financial aid. Fortunately, this still gives the opportunity for those affected by the soon-to-be-implemented cuts to go to university, study and gain a higher education.

Have your say on the new Maintenance Grant cut @milkbathspa

 

 

Feature Image:  London Student Riots © Bob Bob. Original Via Flickr / Creative Commons Attribution Share-alike License

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