Poorest will get student support of up to £2,100

January 23, 2003

Key points

  • Grants of £1,000 a year reintroduced from 2004 for students from households with incomes of £10,000 or less
  • Partial grant will be available to those whose families earn up to £20,000 a year
  • System of waiving the current £1,100 tuition fee for those whose family income is less than £20,000 will continue
  • Tuition fees paid back after graduation, when earnings reach £15,000, at a rate of 9 per cent of income

The poorest students will be entitled to a non-repayable support package of up to £2,100 a year under new arrangements designed to persuade the least well off that they can afford to go to university.

The white paper heralds the re-introduction of a £1,000 grant for the poorest students, with ministers conceding that the abolition of grants in 1997 did more to damage access to university than the introduction of fees.

Combined with plans to continue to waive tuition fees up to the current level of £1,100 for students from lower-income backgrounds, the least well off will be entitled to a total of £2,100, with a loan of up to £3,900, taking their total support package to more than £5,000.

"We have listened to those who say that students from the poorest backgrounds need additional incentives and financial help to continue in full-time education," the paper says.

From 2004, a £1,000 annual grant will be available to those on full-time courses from households with incomes of £10,000 or less.

Some grants will be available for students whose families earn between £10,000 and £20,000. The government says that one-third of students will benefit from either a full or partial grant.

The current £400 million system in which tuition fees are waived for poorer students will continue. Currently, those from families with incomes of less than £20,000 do not pay any of the £1,100 flat-rate tuition fee, and those with incomes of between £20,000 and £30,000 pay only part of the fee. "This will reduce any contribution that students have to pay by up to £1,100 at current prices," the paper says.

If students entitled to the £1,100 fee waiver opt for courses at universities that decide not to increase their fees under the new top-up fee regime, they will get a full waiver.

However, if they choose a university that asks for a higher tuition fee, the student will have to pay the difference between the government's £1,100 contribution and the higher top-up fee.

At current prices that would mean that instead of paying £3,000 for a top-price course, students would only have to pay £1,900, the paper says.

Claire Callender, a government adviser on access, said this arrangement was a "serious danger" as it would encourage poorer students to go to the less prestigious universities that charged the lowest tuition fees. She also said the grant was "disappointingly low".

Students will also be entitled to interest-free maintenance loans of up to £3,905 if they live away from home - more if they live in London.

Further targeting of support has not been ruled out. The paper says: "For the period after 2006, we will continue with this level of resource, but will carefully review these arrangements to see whether they best assist access for those from the poorest groups."

All fees will be paid after graduation, based on graduate income. "No one will have to contribute to the cost of their course until they can afford to do so," the paper says.

Fees will be repaid through the tax system when the graduate's earnings reach £15,000 and they will be paid at the rate of 9 per cent of their income, "so that graduates pay at a rate they can afford", the paper says.

The £15,000 threshold will also apply to loan repayments from 2005. They are currently set at £10,000.

"The change will mean a reduction in repayments of £450 a year for every graduate earning £15,000 or more," the paper says. But ministers admit: "Repayment may be phased over a longer period."

The National Union of Students said it welcomed the reintroduction of the grant and the scrapping of upfront fees, but warned that student debt would rocket to £30,000. A spokesperson said: "We must question why the government refuses to recognise the deterrent that debt is for students from the poorest backgrounds."

Ministers have left it to the institutions themselves to top up the state package of support with their own bursary schemes.

The government said it was also improving "dramatically" the support package for part-time students, to make sure the government is "supporting those who study more flexibly".

Details are yet to be provided.


     Source : DFES The Future of Higher Education

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