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The value of student maintenance support

Published Monday, January 18, 2016

How have student maintenance support levels changed over time? How has the balance between grants and loans changed? What will the Chancellor's Budget announcement on the ending of grants mean to this and to potential students?

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 Summer Budget 2015

The Chancellor announced on 8 July that new students from 2016/17 will receive all their maintenance support as loans -maintenance grants will end. At the same time the maximum value of support will increase to £8,200 (from its 2015/16 level of just over £7,400) for students living away from home outside London.

At the same time a consultation on freezing the repayment threshold was announced. On 25 November the Government's decision was announced -to freeze the threshold for five years from 2015. The decision was published alongside analysis of the impact of this and the replacement of grants with loans.

Maintenance grants, maintenance loans levels and income thresholds were all frozen in England at 2009/10 levels in 2010/11 and 2011/12. 2012/13 saw maximum grant levels for new students from England increased by 12%, maximum loan levels by 11%, changes to income thresholds and fee loans were extended to part-time students. Those starting in 2012 were the first to come under the new funding arrangements and were liable for tuition fees of up to £9,000 per year. The maximum grant increased by 3.2% in 2013/14, it will be 1% higher in 2014/15 and frozen in 2015/16. Maintenance loans were frozen in 2013 and the maximum will increase by 1% in 2014/15 and 3.3% in 2015/16. Income thresholds were frozen in 2012/13, 2014/15 and 2015/16.

New students from 2016/17 will receive all their maintenance support as loans; maintenance grants will end. At the same time the maximum value of support will increase to £8,200 (from its 2015/16 level of just over £7,400) for students living away from home outside London. The Government accepts that this change will mean that students from poorer families will graduate with the largest debts. It says that any risk to participation from these students is 'low'

This note looks at the value of the support for student maintenance since the late 1970s, shows the changing balance between grants and loans, describes the impact of this on public spending and looks in some detail at recent announcements on income thresholds for grants and loans. It includes a comparison of the changes to loan and grant rates in 2012/13, the current rates and the proposals made by Lord Browne.

Commons Briefing papers SN00916

Author: Paul Bolton

Topics: Higher education, Students

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