No fees? No pain?

For many people, it is obvious that Scotland must have a fair system for funding students. Since the abolition of the graduate endowment in 2007, the government has pressed home that we should be proud to have a system based on “ability to learn, not ability to pay.” The alternative story is not so strong on rhetoric: it is more about attention to numbers.

Abolishing the graduate endowment has saved the students affected (not all had to pay it) just over £30million a year. However, in 2013-14 the Scottish government cut its spending on student grants by £35m, or 40%, after freezing grant rates for several years. Total annual spending on all non-repayable grant is now £65m, barely half what it was in real terms in 2006-07, and much less than in the period prior to the initial introduction of fees in 1998. To put that in context, the government finds almost £1billion each year to support the cost of undergraduate teaching in full.

The benefits of abolishing the endowment were initially spread across students, with some bias towards the better off as those already exempt tended to be poorer. For those from the lowest incomes the positive effect has since been more than wiped out by the large reductions in grant: many are thousands of pounds worse off overall.

This year the maximum Young Students Bursary is worth £1,750. Around one in seven students get that much. It falls quickly from that level in a single step to £1,000 and then to £500, at a “residual household income” of £24,000 (measured before tax). At an income of £34,000, it stops.  Mature students get a flat rate £750, provided their income is below £17,000. For many students in Scotland, grant is now at token levels.

Fewer than a quarter of students on a grant borrow nothing. How these manage on such little public support is worth asking. The rest, unsurprisingly, lean heavily on the student loan system to cover their living costs. Most who borrow, borrow the most they can and now face a government debt of between £23,000 and £27,000 for a four year degree.

At incomes above the threshold for grant, around two in five students borrow nothing. Those who do are borrowing amounts which imply an average final debt of £16,500 after four years. Their lower figure is due in part to the government not allowing them to borrow quite so much, but they are also less likely to use their full allowance. Some students at these incomes would borrow more if allowed, but the statistics strongly suggest that many would not feel the need.

As a result, a markedly unequal distribution of student loan is stacking up in the Scottish graduate population. And the total debt is large: this year, the Scottish government plans to lend students almost £0.5bn, double the amount ten years ago. In the years ahead, it will be graduates who started from the homes with fewest resources who will be liable to pay back the largest share of that to the state. The loan repayment rules used by the Scottish government also collect more from lower earning graduates compared to other parts of the UK. This is what a regressive policy looks like, not a progressive one.

It’s the same old story…

One common, depressing response to this analysis is that it’s aye been thus. Poorer students have always had more debt, there’s nothing we can do about it. But we could prevent it, as others already do. Scotland is the only UK nation to settle more government debt on its poorer students than its better off ones. In Wales, where fees are less than half the English level and grants the highest in the UK, students from the lowest income homes end up with lower debt than everyone else. At low incomes, the Welsh system can sometimes even mean lower debt in absolute terms compared to Scotland, even before taking into account the availability of shorter degree courses.

Dispiritingly, another frequent response is that debt for living costs doesn’t matter in the same way as debt for fees, as students can always stay with their parents if they want to keep their living costs down. In other words, low-income borrowers are choosing this level of debt, particularly if they have aspirations to stray too far in pursuit of their higher education. Living at home is a fine way to reduce costs for the children of happy, reasonably-housed families who do not feel the need to ask for much help with the bills, and whose higher education aspirations can be met on their doorstep. It’s hard, often unrealistic, advice for many others.

The most inadequate response has been “but our students don’t have to pay (or borrow) £9,000 for fees”, as though this is enough to close down any further scrutiny of how we distribute resources among our own students within Scotland and as if the choice has to be between what happens here now or the system in England. The obsessive comparison with English fees fails to take responsibility for what we do with the resources we have and the decisions we make here in Scotland.

Nor can we even show that the system adopted here has given Scotland the edge in widening access, despite the frequent claim that free tuition is essential to achieving this. Scotland does not stand out in the UK for progress made on access: even NUS Scotland, which supports free tuition, has been critical of our record there.

I have been writing about what has happened to grant, and how we distribute student debt, for almost two years now. In a political community supposedly defined by its interest in equality and fairness, it has been strikingly difficult to generate concern about the long-term regressive effects of the way we fund our own students.

The government’s presentation of what is happening with student funding in Scotland has often fallen short of what people deserved if they were to understand how all the pieces fit together. But my real disappointment is with those who, having come across this story, remain keen to claim their progressive credentials, will reel off the debt levels expected in England but who cannot bring themselves to show an interest in, let alone object – I mean really object, object as often and as loudly as they do to the possibility of students here incurring any debt at all for fees – to how our diminished system of grants means that within Scotland it will be those graduates who started from the poorest homes who will end up digging deepest into their future earnings as a consequence of having gone to university.

Our student finance system is actively reinforcing inherited inequalities in wealth. It’s that simple. For those who genuinely care about equality and social justice, it’s time to care as passionately about this as about whether we retain 100% debt-free tuition for everyone – in fact, whisper it, it matters more.

See also this update on Lucy’s own site: http://adventuresinevidence.com/2015/03/23/nicola-sturgeon-at-the-lse-why-do-scottish-first-ministers-have-such-trouble-understanding-their-own-student-finance-system/

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