As part of the new Conservative government’s drive to make savings in departmental budgets, it is understood that maintenance grants to the poorest university students may be cut.
Currently costing the Department of Business an estimated £1.57bn per year, the maintenance grant – which is provided, on a sliding scale, to all students whose family incomes are below £42,000 – is once again the subject of discussions between government ministers as a means of delivering budget savings ahead of July’s budget. In 2013, a similar proposal was blocked by the ex-deputy Prime Minister Nick Clegg, however the need to find savings has forced ministers to reconsider the idea.
Ministers are understood to be considering numerous options surrounding this issue, from eliminating the grant completely (which would save an estimated £2bn over 3 years) to converting part of the grant system into the loan system or restricting eligibility for a maintenance grant.
With the maximum grant one could receive being £3,387 per year, it represents a significant portion of a student’s budget. Indeed, there are concerns that, whilst the increase in tuition fees did not have the negative impact on the volume of university applicants that many predicted, changes to the grant system would.
Despite these concerns, however, Nick Hillman from the Higher Education Policy institute believes that this development is almost inevitable, stating:
BIS (Department for Business, Innovation & Skills) is one of the departments that no party promised to protect, and this is one of the very big items in their budget, so I do think this is likely to happen.
Government sources have refused to deny the proposal, stating that officials are ‘looking at everything’.
Although the proposals would save money in the short term, higher education experts have questioned whether the taxpayer would save money in the longer term – if more students were transferred onto the loan system, then theoretically more taxpayer money would be used to help subsidise these loans.
With internal disagreement between the Business Secretary Sajid Javid and the universities minister Jo Johnson over how to save money from the Department of Business (Johnson is understood to be more concerned about cutting maintenance grants) this proposal is by no means certain to happen.