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University grants for poorest UK students replaced by loans

Half a million students will be affected by the new changes, leaving them with more and more debt

From today, people starting university in England will no longer be able to apply for grants previously meant to help low-income students with living costs. Instead, maintenance grants will be replaced with loans, a change that will affect over half a million students.

The change was announced as part of George Osborne’s budget last July, but came into effect today (1 August). Switching over to maintenance loans has been heavily criticised, as a committee of just 18 MPs helped to implement the change in an 18-minute debate passed without a parliamentary vote, reports the Independent. The move will restrict working class students who wish to continue into higher education, creating an even narrower, less diverse university system bubble that benefits the middle class and privileged.

Sorana Vieru, the National Union of Students vice president, called the move “disgraceful”, as it “basically punishes poorer students simply for being poor”. In an interview with BBC Breakfast, she said: “So they have to take a bigger loan than those students from privileged backgrounds”.

“It could put off students from underprivileged backgrounds from applying, who might not understand how the loan system works, or are very debt-averse,” she added.

“We also know mature students are way more debt-averse than younger students and BME students perceive student debt on a par with commercial debt.”

Previously, students with a family household income of £25,000 or less were able to apply and receive a grant of £3,387 a year – what was already a pretty tight number given the essential costs for undergraduate students, especially those that live away from home. The grant was offered to those on a sliding scale, up to a threshold of £42,620 for a family income.

With the new move, students who live away from home within London will be able to apply a loan of up to £10,702, while those outside of London can get up to £8,200. Paying back the loans will require the same process as tuition fees, once graduates have passed earning £21,000 a year.

“This is a very frightening prospect for young people and their parents,” said Liberal Democrat leader Tim Farron, after hearing about the plans back in January. “This is a typical Tory reaction, they don’t understand what it is like to struggle.”

“We have worked to target support to the poorest students, removing that vital help will hurt those who need it most. Plans to cut maintenance grants are wrong and we will fight these plans tooth and nail. Social mobility is a real priority and these changes threaten to further entrench inequality.”

Back in 2012, the government promised to freeze the student loan repayment scheme in place, though a major U-turn was made this recently that would see over two million graduates forced to pay back more despite what was originally guaranteed. Though 84 per cent of respondents to a consultation on student loans were against the freeze, the changes went ahead. However, a parliamentary debate had been triggered after more than 130,000 people signed a petition calling for the Tory government to scrap the changes.

Speaking at the debate, Helen Jones, Labour MP for Warrington North and chair of the Petitions Committee, said: “What’s happening at the moment is simply and totally wrong. The worst thing about this decision is it is retrospective. A commercial organisation would not be able to do this, but the measures it imposes on others it appears (the Government) is not prepared to adhere to itself.”

The majority of MPs present at the opposition debate voted to see in the changes surrounding student loans repayment as detailed in the petition, but the next moves have yet to be announced.