University grants to help low income families scrapped for new loans
The poorest students in the country are set to be hit with even more debt after the government has decided to get rid of maintenance grants in favour of loans.
Previously, students from families with annual incomes of £25,000 or less received a full grant of £3,387 a year towards their living costs.
From Monday this will not be the case anymore and the grants will be loans that must be paid back.
Former Chancellor George Osborne said last year it was a “basic unfairness in asking taxpayers to fund grants for people who are likely to earn a lot more than them”.
Now the new changes are being brought in next week though, those students who live away from home outside of London will receive a higher loan amount of up to £8,200, while those in the capital will get up to £10,702.
This will then all have to be repaid under the same terms as existing loans once a graduate earns more than £21,000 per year.
The change from grants to loans was recently debated in parliament after more than 130,000 people signed a petition calling on the Tories to overturn the decision. The petition said the retrospective changes “threatened any trust had in the student finance system”.
At the debate, MPs argued the Tories had “maxed out the nation’s credit card” and now students and graduates were being left to “foot the bill”.
The change in funding comes as a report questions politicians’ assertions that having a degree leads to higher earnings.
The report, by the Intergenerational Foundation lobby group, says having to pay back student debts will wipe out any graduate premium for most professions.
The government says going to university boosts employability and earnings.