Yesterday’s loan announcements

As part of his Budget announcements, the Chancellor, Philip Hammond, provided more detail on maintenance loans for part-time students and doctoral study.

Part-time maintenance loans for degrees will arrive in 2018/19 with an age cap (you must be under 60), while the government has delayed loans for Level 4 and 5 qualifications, such as HNCs and HNDs, until the following year. It is also planning to review what support will be made available for part-time distance learning. The OBR states that the government intends to offer lower levels of maintenance support to those students, but has yet to finalise a figure.

The Open University has expressed its ‘alarm and concern’ over the announcement and is seeking urgent clarification on this change of heart regarding distance learners.

“The decision will affect one third of all part-time learners and seems to undermine the whole premise of the Government’s policy of arresting the decline in part-time study to help boost growth and close the productivity gap.”

From 2018/19, Doctoral loans will offer students without full funding a one-off loan of £25,000 towards fees and the costs of study. Doctoral loans will be wrapped up with taught postgraduate loans (£10,000) to create a single balance. The repayment threshold will be £21,000 and the repayment rate 6%, meaning that those with undergraduate and postgraduate loans will see 15% taken from gross earnings over £21,000. (With income tax at 20% at the lowest band and Class 1 NI at 12% that indicates a marginal take of 47% over the repayment threshold. The government appears to have very little (no?) impact modelling here to assess affordability and the knock- on effects for e.g. participation in employer pension schemes).

In light of the recent discussion of undergraduate maintenance support, the impact analysis for doctoral loans indicates that

The cost of living during doctoral study is strongly dependent on the location of the university. Forexample, Oxford and London are at the top end of living cost, at around £14,000 per year. The cost of living in cities such as York, Sheffield or Aberystwyth is lower, at around £11,000 per year.