Today's student finance changes will "punish the poor for being poor"

The government removed student grants today, amid widespread concern that the poorest students will be put off attending university.

Grants - lumps of money given to students from poorer backgrounds in order to help them through university - have been completely scrapped as of today, and replaced with loans.

The NUS have criticised the move, saying it would "punish the poor for being poor".

Increase in debt

The Institute for Fiscal Studies (IFS) have looked into how debt students will have now that the the government have scrapped grants for poor students, replacing them with larger maintenance loans.

According to the IFS figures poorer students will face the biggest increase in debt out of all income groups, as well as coming out of university with the largest debts overall.

The below graph shows how much debt students would face before the reforms, and how much they'd face afterwards, based on their income groups. The horizontal line shows parental income, whilst the vertical shows how much students will owe the government after their degree.

The poorest students have the largest debts

The biggest jump in debt will be for the poorest students. Current students with a parental income between £2,500 and £22,500 would expect to owe the government £40,737 at the end of their degree. After the reforms (which remove grants that these students would normally receive), their debts are expected to hit £53,216.

In contrast students at the richer end of the spectrum will actually see a slight fall in the amount they owe. Students with parents who earn over £62,500 will owe around £100 less than they would now.

NUS vice president Sorana Vieru said the scheme would punish the poor for being poor:

"It’s a disgraceful change that basically punishes poorer students simply for being poor, so they have to take a bigger loan than those students from privileged backgrounds," she told BBC Breakfast

"It could put off students from underprivileged backgrounds from applying, who might not understand how the loan system works, or are very debt-averse."

"We also know that mature students are way more debt-averse than younger students and [black and minority ethnic] students perceive student debt on a par with commercial debt."

Concerns poorer students will be put off higher education

Meanwhile, a study by the National Union of Students (NUS) has found that half of students (52%) thought that receiving grants was absolutely essential for them to be able to go to university. Megan Dunn, the President of the NUS said:

“The students of this country recognise the profound and damaging effects the cut to maintenance grants will have. The government needs to sit up and take note. We must tackle the causes of this crisis and cut the costs that are pricing the poorest out of education.”

A report from the Sutton Trust also claimed that students from poorer backgrounds would be put off by the scrapping of grants, as well as finding that previous increases to tuition fees had put off mature students from attending university.

Debt written off after 30 years

Concerns have also been raised that the increase in debt taken on by students won't actually lead to more money being recouped by the government. Currently maintenance and tuition fee loans are written off after 30 years. Last year MPs warned that nearly half of students wouldn't pay back their full loan, after having them written off after the 30 years were up.

With higher loans, the government is likely to end up writing off even more debt, saving money in the short term by removing the grant and leaving it for a later government to cover.

In effect poorer students may get their grant, just 30 years later than they needed it.

What do these reforms mean for you?

If you're worried about what these reforms mean for you, take a look at our guide (for reassurance purposes):

Students- What the Grant Reforms Mean for You

Or for something less depressing, check out how these students have been saving money with one simple "toilet hack"...

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