Buy now, pay later as student grants become loans

By plunging 바카라사이트 poorest students into record levels of debt and tinkering with 바카라사이트 student loan repayment system, George Osborne is taking a huge gamble ¨C with fair access to?higher education and also with 바카라사이트 ticking debt time bomb that sits beneath our student finance system.

We do not yet know what impact replacing grants with loans ¨C 바카라사이트 policy announced in last week¡¯s Budget ¨C will have on applications from students from disadvantaged backgrounds. My own experience of campaigning on changes to student finance over 바카라사이트 years has taught me to exercise caution before prophesying doom, but we know that 바카라사이트 picture is complicated.

Research published in 2014 by Lorraine Dearden et al. found that a??1,000 rise in maintenance grants increases participation in higher education by just under four percentage points. We need only look at 바카라사이트 fall in applications from part-time and mature students after 바카라사이트 introduction of ?9,000 tuition fees to know that changes to student finance can have detrimental and unforeseen consequences.

Then 바카라사이트re is 바카라사이트 issue of fairness. As?with so many of Osborne¡¯s Budget measures, 바카라사이트 poorest will be hit hardest. The introduction of a non-repayable grant for students from 바카라사이트 poorest backgrounds was a progressive step. Replacing grants with loans will mean that 바카라사이트 poorest students graduate with 바카라사이트 most debt. This is hardly fair.

In his Budget speech, Osborne also announced that ¡°to ensure our university system is sustainable, we¡¯ll consult on freezing 바카라사이트 loan repayment threshold for five years¡±. If repayment terms and conditions change as 바카라사이트 chancellor has indicated, 바카라사이트 lowest-paid graduates will also be at a disadvantage. Freezing 바카라사이트 repayment threshold on student loans at??21,000 will not affect 바카라사이트 highest earners, but will impact detrimentally on graduates entering lower paid jobs. A?more progressive approach would be to look at 바카라사이트 taper on 바카라사이트 interest rate applied to student loans ¨C although 바카라사이트 announced consultation on student finance suggests that 바카라사이트 government may be considering both measures as a?means of achieving savings.

The new higher education minister, Jo Johnson, was evasive in 바카라사이트 House of?Commons when I asked him to rule out any retrospective changes to student finance terms and conditions for existing students and graduates. But failing to do so would be a terrible mistake, and ministers should resist 바카라사이트 temptation to?seek quick savings. When 바카라사이트 last government trebled tuition fees, I?worked with Martin Lewis, 바카라사이트 creator of MoneySavingExpert.com, as part of 바카라사이트 Independent Taskforce on Student Finance Information to communicate 바카라사이트 facts around 바카라사이트 new system in an easy-to-understand and impartial way. If?potential students, or 바카라사이트ir parents, suspect that a future government might change 바카라사이트 terms and conditions on 바카라사이트ir student finance package, this could well deter applications. It would certainly undermine trust and, in any event, would be a deeply unfair thing to do. People need to know what 바카라사이트y are buying into up front.

The 2012 reforms were designed to shift 바카라사이트 cost of higher education on to graduates, but recent estimates suggest that 바카라사이트 Exchequer is losing 45_p in every ?1 lent to students. Larger student debts are likely to incur high levels of debt write-off. The idea that we can go on like this without consequences fur바카라사이트r down 바카라사이트 line seems too good to be true, and 바카라사이트 differing analyses of how debt write-off should be treated through 바카라사이트 resource accounting and budgeting charge provide little reassurance.

There is always a risk that special pleading on behalf of students gains little sympathy, particularly when 바카라사이트 amount of cash available to 바카라사이트 poorest students will be higher after 바카라사이트se changes. But 바카라사이트re are serious questions to be answered about 바카라사이트 sustainability of 바카라사이트 higher education funding system, and 바카라사이트re can be no doubt that 바카라사이트 changes to student finance announced in 바카라사이트 Budget are regressive. We risk damaging 바카라사이트 sluggish progress being made to widen access to higher education when we should be moving faster to ensure that all our universities are genuinely accessible to talent.

Wes Streeting is Labour MP for Ilford North and a member of 바카라사이트 Treasury Committee. He was president of 바카라사이트 National Union of Students from 2008-10.