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Students and graduates hit hard by budget changes

Students from the poorest families will leave university owing “substantially more” to the government than their richer peers, warns analysis of changes to student funding in the budget released today.  UCU general secretary, Sally Hunt, said: ‘the government has created a situation where the poorest students that aspire to university will have to take on much larger debts and be hit with bigger annual repayments once they graduate.”

Bath Vice Chancellor Glynis Breakwell has publicly expressed her support for the Government’s plan to scrap maintenance grants and extend loans.   In the past she has also supported calls for increases in tuition fees.

The British Universities Directors of Finance Group adds in its recent briefing:

“In a week in which universities minister Jo Johnson confirmed the details of student support packages for 16/17, a briefing note from the Institute of Fiscal Studies (IFS) found that the average student debt owed by graduates from poorer backgrounds could hit £53,000 following the changes to student loans outlined in the recent budget. The briefing note explains how the increase, from an average of £40,500 under the current system, will result from the moves to replace maintenance grants with loans, and freeze the loan repayment threshold.

The study also found that government finances will not be much better off in the long-term as a higher proportion of graduates from poorer backgrounds do not repay their debt in full, and so much of the extra amount lent will not be repaid. IFS estimates put the short-term reduction in national account spending at £2bn a year, but only £270million actually saved per cohort over the lifetime of the loans. There is further analysis of the figures on the BBC website and in the Times Higher.

In related news, Jeremy Corbyn MP, a candidate for the Labour leadership, has proposed to launch a policy of scrapping tuition fees altogether if he becomes Labour leader, and replacing them with grants. “

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