Student Maintenance Grants

Liz McInnes Excerpts

Tuesday 19th January 2016 Commons Chamber

[Liz McInnes (Heywood and Middleton) (Lab)]

I am grateful for the opportunity to speak in the debate, because I have been urged to do so by many students in my constituency. This is a matter of great interest to the general public, and the Government’s behaviour has been noticed by them, even if the Government themselves are still in denial.

The fact remains that the Chancellor’s replacement of maintenance grants with loans may dissuade many students from modest backgrounds from going to university, while none the less resulting in large sums never being paid back to the Treasury because graduates will go into what the Prime Minister described last week as “menial labour jobs”. That point has not been addressed, although a number of Members have raised it.

Even with maintenance grants, which support students from the poorest backgrounds through university, the system remains stacked against working-class students. According to the education charity The Sutton Trust, students from wealthy backgrounds are 10 times more likely to secure a place at university than those from poorer backgrounds.

The Government have consulted about freezing the current student loan repayment threshold at £21,000 for five years. Martin Lewis, of moneysavingexpert.com, has pointed out that only 5% of the responses to the consultation were in favour of the proposal, while 84% were against it. He has written to the Prime Minister to ask why the Government have pressed ahead regardless with increasing the amount that our students must pay for their current student loans. In 2011, Martin Lewis was appointed head of the Independent Taskforce on Student Finance Information. Ministers told him unambiguously that, from April 2017, the £21,000 repayment threshold would start to rise annually with average earnings. The decision to backtrack on that is hugely damaging. It means that many lower and middle-earning graduates will repay thousands more over the life of their loans.

Martin Lewis says that this issue is just as much moral as legal. The retrospective change destroys trust in the student finance system, and perhaps even more widely in the political system as a whole. The Government seem remarkably relaxed about the fact that our poorest students will graduate with £53,000 worth of debt before they have even started work. What guarantee will the Government give that they will not move the goalposts for repayment of this loan as well?

There is a huge body of evidence to support student maintenance grants. I do not have time to go into all of them, but they are opposed by the University and College Union, which says:

“Maintenance grants are crucial for engaging students from disadvantaged backgrounds who are already daunted by cripplingly high tuition fee debt. Increasing the debt burden…will act as a disincentive to participation”.