THE Scottish Government’s review of student finances was set up last year to answer an important question: how can we improve the system of funding for university and college students? But was anyone expecting the answer “give students a living wage”? Based on the minutes of their meetings so far, that looks like the solution the review group is starting to favour. It is a bold idea; whether it can work is another matter.

What no one really questions is that the current system does need improving. Not only are there significant differences in what is available to university and college students, many students are often unclear about what they are entitled to. It has also become obvious many colleges do not have the cash they need to fund student support payments. That can lead to unfairness, particularly for college students, which the review group was set up to tackle.

The group’s potential solution of a living wage, or perhaps more accurately a minimum income, has come from the chair of the group, Jayne-Anne Gadhia, and is based on the idea students should not be seen as a burden on public finances but as a group that is contributing to society. In the minutes, Ms Gadhia takes the idea further and suggests students should be seen as employees and be paid an annual amount of £8,100 based on the living wage. They wouldn’t be paid a wage as such – the money would come in the form of bursaries or loans – but the system would start from the first principle that every student is entitled to £8,100, worked out on the basis of an equivalence to the living wage.

The proposal has some obvious potential benefits, including simplification of the system. Students would know they are entitled to £8,100 subject to possible means testing. For many students, the new system would also mean a considerable increase in the money available to them – university students can currently borrow up to £5,750 –for college students it is much lower.

However, the idea also has some drawbacks, some of which the group has already considered – for example, the payment would be subject to attendance, which is a good idea. Another issue would be how the £8,100 would affect other payments students can claim – certain benefits, for instance, or the education maintenance allowance.

But a greater concern must be how the new system would be funded. Without means testing, the review group suggests the cost would be £400m – means tested it would be £200m –either way this is not something that the Scottish Government could easily afford. The other concern must be that the proposal would increase debt by effectively allowing some students to borrow more.

These problems should not necessarily kill off the idea, which starts from a well-meaning principle. But if the proposal is to have any traction at all, then answers will have to be found to the funding problem. The review group has come up with an arresting and progressive idea,

but it raises as many questions as it answers.