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Sharp increase in student debt after scrapping of bursaries

THE scrapping of bursaries for the poorest students north of the Border has led to a sharp increase in levels of debt, new research shows.

MICHAEL RUSSELL: Scrapped grants for the poorest students.
MICHAEL RUSSELL: Scrapped grants for the poorest students.

Analysis of the latest figures from the Student Loan Company shows student debt rose more sharply in Scotland than anywhere else in the UK in 2013/14 - up by a record 58 per cent to £436 million for the year.

By comparison, student debt rates in England, where loans also cover tuition fees of up to £9000 a year, increased by 26% while in Wales and Northern Ireland the increases were 15% and 8%.

The increase prompted calls from opposition parties for the Scottish Government to reverse cuts in bursaries for the poorest students first announced in 2012.

Michael Russell, the Education Secretary, replaced the grants as part of an expansion of loans to cover living costs, arguing that the biggest deterrent to students was the cost of living rather than debt.

The move was supported by national student body NUS Scotland, but opposition politicians accused the Government of heaping debt on the most vulnerable students.

The latest attack on the policy comes after former Scottish Government civil servant Lucy Hunter Blackburn - who helped devise the graduate endowment charge scrapped by the SNP in 2007 - said debts taken out by Scottish students to meet their living costs soared by £160m last year.

She said the increase was the highest annual rise in total student debt in any part of the UK since the mid-1990s.

However, Scottish students still have the lowest average debt in the UK, at £5344 per head compared to £8924 in England, £6191 in Wales and £6214 in Northern Ireland.

Neil Bibby, Scottish Labour's deputy education spokesman, said: "The SNP has already reduced grants, which means many Scots from poorer backgrounds are less able to access university education. The drastic rise in student loans being taken out shows the SNP needs to think again about how to support students and they could start that by reversing the cuts to bursaries for the poorest students."

Scottish Liberal Democrat education spokesperson Liam McArthur added: "The news that overall student debt rose more sharply in Scotland than the rest of the UK will no doubt surprise many.

"We have previously warned that the SNP's decision to reduce grants and replace them with loans could have a particular effect on those who need grants most. This increase in student debt is light years away from the SNP's manifesto promise to scrap student debt altogether."

NUS Scotland said it would campaign for the return of grants. Gordon Maloney, the organisation's president, said: "We will be working with the ­Scottish Parliament to push for increased grants for the poorest students, not instead of these student loan increases, but in addition."

Announcing the new funding scheme in 2012, Mr Russell played down the greater use of loans by arguing the new package would give Scottish students the most generous deal in the UK, entitling them to at least £7,250 overall.

The Scottish Government said it was clear Scottish students still had lower debts on average than others in the UK. A spokesman said the loans offered students more flexibility in how they supported themselves. In addition, 12,175 college students received educational maintenance allowances worth £8.3m in 2011-12.

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