MPs' muddled repayment logic 1

July 18, 2003

There is some very muddled logic in the proposals from the select committee on education and skills to make full-cost maintenance grants available to students from poor backgrounds and paid for by higher interest rates on student loans ("MPs savage white paper proposals", THES, July 11).

What happens when a graduate who failed to qualify for a grant because their parents' income was marginally above the set level ends up on public service pay that just passes the loan repayment threshold, while a colleague who received a grant pursues a career that is substantially better paid? The former will directly contribute, probably for the rest of their working life, to the larger net income of the latter. It is no less inequitable if both earn the same relatively low income: one is tied for the long term into repaying a loan at an ever-increasing rate of interest, the other repays nothing.

If the principle behind student loans is that the main beneficiary of higher education, the student, pays retrospectively and according to their future means, it is nonsense to have a restricted system of non-repayable grants that are determined by parental income at a quite different stage of a student's career. It betrays a pessimistic (or cynical?) belief that higher education - or lack of it - makes no difference to a student's chances of earning more or less than their parents. The principles behind the proposed loans and grants system are diametrically opposed. According to one principle, students shoulder the financial burden, and according to the other, parents do.

If the desire is to encourage people into higher education who might be deterred by future debt, then let there be means-tested grants. But these should be funded by general taxation rather than by forcing other students further into long-term debt to pay for them.

Susan Sherratt
Ashmolean Museum
University of Oxford

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