Budget 2015 – the impact of cutting maintenance grants – experts react

Students of poorer parents can’t rely on “Bank of Mum & Dad”. Academic evidence shows maintenance grants crucial to widening opportunities to study at university

For those education correspondents who may be previewing the Chancellor’s budget on Wednesday, two higher education experts comment on research into the impact of potential cuts to maintenance grants.

Professor Anne West, London School of Economics and Political Science:

“Maintenance grants are vitally important for students from low income families. It is unclear whether a reduction will affect the likelihood of such students going to university, but it is highly likely to mean that poorer students will have more debt than others as they do not have additional financial support from parents. 

Our research found that more affluent parents are better able to shield their children from debt – by paying all or part of their higher education costs, by putting money aside for future property purchases, by being prepared to step in to support loan repayments or by using other financial resources to pay off the debt. Parents with lower household incomes were not able to shield their children from debt in similar ways. 

In short, there are clear differences in the extent to which parents are able to mitigate the impacts of the student loan debt – more affluent parents are able to transmit their financial advantage to their children in a way that poorer parents are not, so creating a new emerging form of inequality, which a reduction in student maintenance grants will undoubtedly exacerbate. 

It is also worth noting that the amount of student support available through grants and loans currently falls far short of most students’ expenditure.  Sometimes the total value of a student financial support falls short of what the university charges for accommodation and food – so this is not to do with students’ extravagance.”

NOTE TO JOURNALISTS : RESEARCH REFERENCE:West, A., Roberts, J. Lewis, J. and Noden, P (2015). Paying for Higher Education in England: Funding Policy and Families. http://www.tandfonline.com/eprint/EnSD8vbNTkcbPsFGq4e3/full

Professor Anna Vignoles, University of Cambridge:

“Evidence shows that maintenance grants have had a positive impact on higher education participation and so people will rightly be concerned about their removal. However it is not simply a case of offering grants –  the size of the grant will also matter. 

The main financial barrier that poor students face when trying to go to university is whether they can afford to support themselves whilst studying. So offering a more generous loan that genuinely provides enough for poorer students to support themselves during university might be better than a very small or heavily means tested grant that does not provide sufficient income for enough students during their studies.“

Updated comment from Anne West, post Budget announcement:

“Maintenance grants are vitally important for students from low income families.  With the replacement of grants by loans, poorer students will have higher levels of debt than they do now and are likely to have higher debt levels on graduation as they do not have additional financial support from parents.  It is unclear whether a reduction will affect the likelihood of such students going to university.

Our research found that more affluent parents are better able to shield their student children from debt – by paying all or part of their higher education costs, by putting money aside for future property purchases, by being prepared to step in to support loan repayments or by using other financial resources to pay off the debt. Parents with lower household incomes were not able to shield their children from debt in similar ways.  

In short, there are clear differences in the extent to which parents are able to mitigate the impacts of the student loan debt – more affluent parents are able to transmit their financial advantage to their children in a way that poorer parents are not, so creating a new emerging form of inequality, which a reduction in student maintenance grants will undoubtedly exacerbate.  

Moreover, the amount of student support available through grants and loans currently falls far short of most students’ expenditure.  Sometimes the total value of a student financial support falls short of what the university charges for accommodation and food – so this is not to do with students’ extravagance. So again, students from poorer households are going to be disadvantaged as they cannot rely on parental support to make up the difference between the amount of the loan and living expenses.” 

Note to journalists: The research was funded by the Leverhulme Trust. West, A., Roberts, J. Lewis, J. and Noden, P (2015). Paying for Higher Education in England: Funding Policy and Families. http://www.tandfonline.com/eprint/EnSD8vbNTkcbPsFGq4e3/full

 

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