‘Students face higher debts’
STUDENTS from Wales starting university for the first time next month will have less cash in hand and higher debts than previously.
The Welsh Government’s new finance package is not widely understood, UK think tank the Higher Education Policy Institute (HEPI) claims.
Under the package starting for all new students from Wales from September, debt will soar by 20% to 85% depending on a student’s background; there’s a £500 cut to cash-in-hand support for the poorest students and; parents are no longer expected to contribute towards maintenance support.
Full-time tuition fee loans for undergraduates from Wales are rising to £9,000, just under the current English maximum of £9,250.
HEPI says: “This is roughly double the previous amount typically borrowed by students from Wales for their fees, as they were previously entitled to a fee grant worth around £5,000 which reduced their tuition fee and loan to around £4,400.”
Under the old system, students got different levels of total maintenance support depending on their background. Students from households with incomes of less than around £18,000, were entitled to a £4,300 loan and a £5,200 grant totalling £9,500.
Students from richer backgrounds were not entitled to a grant but were entitled to a loan worth £6,900 where household income was around £50,000 falling to £5,200 if income was above £60,000.
From 2018-19, all full-time, firsttime undergraduate students will have an entitlement to maintenance support from loans and grants amounting to £9,000 a year, irrespective of household income – £500 less than last year.
All full-time students from Wales will be entitled to a (non-repayable) maintenance grant of £1,000. The balance between loans and grants depends on household income.
“Now, students from the richest families are expected to borrow around nine times more than students from the poorest households to cover their living costs,” Nick Hillman, director of HEPI and author of the report says.
From September, over a three-year course, those from the lowest-income households can expect about £30,000 of debt, made up of £27,000 for fees and just under £3,000 for maintenance, excluding interest. Those from the highest-income households can expect £51,000 of debt, made up of £27,000 for fees and £24,000 for maintenance, excluding interest.
The HEPI says: “In other words, under the new system everyone will owe more than now.
“But the increase in debt is much more substantial for those from betteroff households.”
A Welsh Government spokesman said: “We welcome Nick Hillman’s recognition that Wales has a financial package that will help many students and ensure well-funded universities.
“All the research shows – and this has been widely endorsed by the NUS and experts from across higher education – that it is upfront living costs that discourage students from accessing higher education, particularly those from poorer backgrounds.
“That is why we have the most generous system of support in the UK – a system that designed to ensure that all eligible students are able to access a minimum level of support, regardless of household income.
“Our ‘whole system approach’ also means that Wales will be the only country in Europe to provide equivalent maintenance support – in grants and loans – to part and full-time undergraduates and postgraduates.
“What this research does not take into account is that no student actually has to take out a loan; a student from household below £18,000, for example, could just take out an £8,100 grant.
“It’s also important to point out that any full-time undergraduate student from Wales taking out a maintenance loan has access to a partial cancellation of their loan when they enter repayment – this can be worth up to £1,500.”
A spokesman clarified the statement “no student actually has to take out a loan”.
“By that, we meant that the additional loan is optional, eg a student may prefer to supplement their grant with a part-time job or parents may be able to help – we don’t expect them to but they may want to,” he said.