IFS analysis reveals students and graduates hit hard by budget changes

20 July 2015

Students from the poorest families will leave university owing 'substantially more' to the government than their richer peers, warns analysis of changes to student funding in the budget released today.

The Institute for Fiscal Studies (IFS) says replacing student maintenance grants with a repayable loan will result in the poorest 40% of students at university in England graduating with debts of up to £53,000 from a three-year course, rather than up to £40,500. However, the IFS says the change won't make much difference to long-term government borrowing.

The IFS says the decision to freeze the amount of money graduates earn before they start repaying their loans back will make more of a difference to government borrowing. The analysis also estimates graduates on median incomes will be hit the hardest paying back over £6,000 more in 2016 money.

UCU general secretary, Sally Hunt, said: 'The government has created a situation where the poorest students that aspire to university will have to take on much larger debts and be hit with bigger annual repayments once they graduate. It is little more than a tax on aspiration and exposes this government as certainly not being on the side of the strivers.'

Last updated: 10 December 2015