A study by the Higher Education Policy Institute (www.hepi.ac.uk), published on Thursday, 30 August 2018, looks at the new student finance regime being introduced by Labour and the Liberal Democrats in Wales, which remains poorly understood across most of the UK.

From this autumn, undergraduates from Wales will no longer get a tuition fee grant. As a result, tuition fee loans will more than double (to £9,000 for those studying in Wales), embedding high tuition fees and loans across more of the UK. Maintenance support is changing too. Although there is to be a new universal maintenance grant, many will be expected to take on larger maintenance loans.

The new report shows the effects of the changes include:

  • higher student debts, which will rise by 20% to 85% depending on a student’s background;
  • a £500 cut to cash-in-hand support for the poorest students; and
  • a boost for parents, who are no longer expected to contribute towards maintenance support, contrary to concerns about inter-generational fairness.

Nick Hillman, the Director of HEPI and the author of Is ‘progressive universalism’ the answer? The new student funding arrangements in Wales, said:

The UK benefits enormously from having a single higher education system. There has been mutual respect between the different parts of the UK, collaboration between different institutions and a UK-wide research infrastructure. University staff often move from one part of the UK to another. This has helped us punch above our weight globally. Yet, in recent years, deepening devolution has meant the concept of a single higher education system has been stretched close to breaking point.

Nowhere is this clearer than on student finance. The UK now has very different student funding arrangements in Belfast, Cardiff, Edinburgh and London. In many respects, it is positive that each part of the UK has opted for its own preferred system that reflects local priorities. But there are political and practical obstacles too. For example, there are challenges when people move from one part of the UK to another for their studies, and the job of the UK-wide Student Loans Company becomes more challenging every year as the four separate systems continue to diverge.

In Wales, a Liberal Democrat Cabinet Secretary in a Labour-led Government is making high tuition fees the norm by getting rid of the old fee grant as well as introducing a universal maintenance grant. This is striking because, at Westminster, both these political parties have called for a shift away from high fees. With the notable exception of the SNP, it continues to be the case that major political parties seem to back high tuition fees in power but oppose them in opposition.

The Welsh package has been well designed. It crafts a careful balance between resources for teaching, cash-in-hand for students and support for different types of students. It deserves close investigation by all, including in England by the current Post-18 Education and Funding Review.

But it also shows the tough trade-offs that have to be considered when putting affordable student finance rules in place. Few people have recognised that living cost support is being reduced for the poorest Welsh students or that student debt levels are rising by up to 85%. Some people may also question whether parents should get a completely free pass.

There is a risk the new package will turn out to be unsustainable if current reviews already underway lead to changes in the way student loans appear in the national accounts or if major reforms are made to student support in England.

Notes for Editors

  1. Is ‘progressive universalism’ the answer? The new student funding arrangements in Wales (HEPI Policy Note 8) by Nick Hillman is being published at 00.01am on Thursday, 30 August 2018. It looks primarily at how the student finance rules are changing between 2017/18 and 2018/19 for new full-time undergraduate students from Wales who live outside the parental home.
  2. The Higher Education Policy Institute (HEPI) was established in 2002 to influence the higher education debate with evidence. It is UK-wide, independent and non-partisan. We are funded by organisations and universities that wish to see a vibrant higher education debate, as well as through our events. HEPI is a company limited by guarantee and a registered charity.