Question to the Department for Education:

To ask the Secretary of State for Education, what assessment he has made of the effect on the public purse of replacing university maintenance grants with larger maintenance loans in every year since that change was introduced in 2016-17.

An assessment was made at Summer Budget 2015 of the costs of replacing maintenance grants with loans for all full-time higher education students from the 2016/17 entry cohort. The then former Minister for Universities, Science, Research and Innovation Jo Johnson, my hon. Friend for Orpington said in the House of Commons Debate about Student Maintenance Grants on 19 January 2016 (c1308) that:

“The switch from maintenance grants to loans will, in a steady state, save around £2.5 billion per year from the fiscal deficit. […] We acknowledge that a proportion of the loans will not be repaid. This is a conscious decision to invest in the skills base of our country, and protect those who go on to lower-paying graduate jobs. We forecast that the long-term annual economic savings will be around £800 million per year.”

An equality analysis was also published by the government in November 2015, which included analysis of the impacts of the change from maintenance grants to loans: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/482110/bis-15-639-student-finance-equality-analysis.pdf.

There has been no further analysis of the impact of this policy, as current student loan expenditure and repayment will be impacted by all the policy changes which have been enacted since this date.

A review of post-18 education and funding is underway. This is being informed by independent advice from an expert panel, chaired by Philip Augar. The panel have undertaken an extensive programme of stakeholder engagement and evidence gathering. They will report in 2019 before government concludes the overall review.