Ministers ‘quietly tighten financial screws’ on students in England – IFS
Students in England are being hit by stealth cuts and tax rises by a government which is using high inflation to “quietly tighten the financial screws”, according to the Institute for Fiscal Studies (IFS).
The IFS paper highlights a series of ways in which inflation is eroding the value of student loans and tuition fees, enabling the government to claw back money from students and universities to the tune of £2.3bn.
The report, published on Thursday, comes at a time of concern about the impact of the cost of living crisis on already hard-up students and uncertainty about the future of higher education funding.
According to the IFS thinktank, students will see substantial real-terms cuts to the value of maintenance loans, with the parental earnings threshold frozen at £25,000 when it should have risen to £34,000, meaning many students are not receiving full maintenance loans.
In addition, the IFS says the rate at which the level of maintenance loans will be increased – at 2.3% – falls short of both the current level of inflation and predicted levels for the year ahead. “This means that many students will see their maintenance loans cut in real terms, even though the real value of their parents’ incomes will also have fallen,” the report said.
The IFS also highlighted the recent government decision to freeze the student loan repayment threshold at £27,295 rather than applying the current rate of inflation, so that a graduate earning £30,000 will need to pay £113 more towards their student loan in the next tax year than originally agreed.
Tuition fees meanwhile remain frozen for the fifth year at £9,250 which amounts to a 15% real-terms cut in the level of tuition fees over the past decade, the IFS said, hitting university income
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