Funding reforms mean ‘substantially higher debt for poorest students’

The government will push university students from poorer backgrounds further into debt following reforms announced in the budget that will save the Treasury £2bn in the first year, according to a leading tax and spending watchdog.

The Institute for Fiscal Studies (IFS) said George Osborne’s reforms of higher education funding, which will scrap university maintenance grants in 2016-17 for the poorest 40% of students and convert them into loans, “will result in substantially higher debt for the poorest students”.

It said the benefits claimed for the public finances would also be short-lived as a high rate of non-repayment by students over the coming decades would increase the amount of loans written off under the scheme.

Critics of the move, such as Sir Peter Lampl, chair of educational charity the Sutton Trust and of the Education Endowment Foundation, have already warned that increasing the burden of loans could put off many low- and middle-income students from going to university.

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