Students: Loans

Department for Education written question – answered on 4th November 2019.

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Photo of Philip Dunne Philip Dunne Conservative, Ludlow

To ask the Secretary of State for Education, what assessment he has made of whether it is possible to replace tuition fees with maintenance grants and be cost-neutral to the public purse; and whether there would need to be a reduction in the number of student places to achieve that change in the current spending round.

Photo of Chris Skidmore Chris Skidmore Vice-Chair, Conservative Party, Minister of State (Department for Business, Energy and Industrial Strategy) (Universities and Science) (Joint with the Department for Education)

Taxpayers subsidise around 50% of the cost of higher education. The cost of the student finance system is a function of 3 main parameters: (i) the number of students supported, (ii) the level of resource per student and (iii) the terms of the funding (for example the balance of loan vs. grant funding) provided to students and institutions. Changing any of these parameters, for example by reintroducing maintenance grants, will require changes either or both of the other 2 if the outcome is to be cost neutral.

The Institute for Fiscal Studies has recently published illustrative estimates of the potential cost to HM Treasury of abolishing tuition fees. This can be found here: https://www.ifs.org.uk/publications/14369.

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