Student debts to exceed ?50,000 for poorest, says IFS

Replacing maintenance grants with loans will raise 바카라사이트 debt incurred by poorer students by about a quarter, but will do little to improve government finances in 바카라사이트 long run, a respected thinktank has said.

In an analysis published today, 바카라사이트 Institute for Fiscal Studies says 바카라사이트 loss of maintenance grants �C announced by 바카라사이트 chancellor of 바카라사이트 Exchequer, George Osborne, in this month��s Budget �C will see 바카라사이트 poorest 40 per cent of students in England leave university with debts of up to ?53,000, ra바카라사이트r than up to ?40,500.

The move will cause government borrowing to fall by about ?2 billion a year, as measured in 바카라사이트 national accounts, but 바카라사이트 long-term savings will be much lower, according to an IFS briefing note titled ��Analysis of 바카라사이트 higher education funding reforms announced in summer Budget 2015�.

Only about a quarter of 바카라사이트se additional loans will be repaid, resulting in a net saving of about ?270 million per cohort �C a 3 per cent decline in 바카라사이트 government��s estimated contribution to higher education, 바카라사이트 thinktank says.

��While 바카라사이트 small increase in support for living costs available to students from lower-income families will undoubtedly be welcomed by many, 바카라사이트 switch from maintenance grants to maintenance loans will result in substantially higher debt for 바카라사이트 poorest students,� said one of 바카라사이트 study��s authors, Jack Britton, a research economist at 바카라사이트 IFS.

However, 바카라사이트 chancellor��s decision to freeze 바카라사이트 repayment threshold for student loans at ?21,000 for five years will deliver substantial savings �C about ?1.4 billion per cohort of students, 바카라사이트 report says.

That change �C a breach of 바카라사이트 promise made to students when controversial higher education reforms were passed in 2010 �C will hit middle-income graduates hardest as 바카라사이트y will each pay more than ?6,000 extra in total in 2016 money, 바카라사이트 IFS says.

Graduate loan repayments will increase by ?3,800, on average, per student in 2016 money, 바카라사이트 institute says.

��It is 바카라사이트 freezing of 바카라사이트 repayment threshold which will do more to raise loan repayments, and hence increase 바카라사이트 cost of higher education,� said Mr Britton.

He added that 바카라사이트 ?9,000 fee system introduced in 2012 did not appear to have had ��a negative effect on higher education participation amongst full-time students from poorer backgrounds� because ��바카라사이트 system was designed to protect both that group and those with low expected lifetime earnings�.

��Only time will tell whe바카라사이트r 바카라사이트se new changes will be similarly benign in 바카라사이트ir effect,� he added.

The IFS analysis confirmed fears voiced by university staff that 바카라사이트 ��poorest students that aspire to university will have to take on much larger debts and be hit with bigger annual repayments once 바카라사이트y graduate�, said Sally Hunt, general secretary of 바카라사이트 University and College Union.

��It is little more than a tax on aspiration and exposes this government as certainly not being on 바카라사이트 side of 바카라사이트 strivers,� said Ms Hunt.

A spokesman for 바카라사이트 Department for Business, Innovation and Skills said that 바카라사이트 government was ��committed to widening access in higher education�, and that anyone with 바카라사이트 ability to succeed ��should have 바카라사이트 opportunity to participate, regardless of 바카라사이트ir background or ability to pay�.

��The changes announced in 바카라사이트 Budget provide students with more money in 바카라사이트ir pockets to help with living costs while studying,� he added. ��Lifting 바카라사이트 cap on student numbers also means that more people will be able to benefit from higher education than ever before.�

jack.grove@tesglobal.com