As ever with a George Osborne spending review, the devil is always in the detail. So while the theatre of the autumn statement was taking place, my nose was buried in the blue book that details every decision in the spending review. Sure enough, page 93 contained a sentence announcing that the government was not only amending the repayment conditions on maintenance loans for higher education, it would be applying these changes retrospectively to existing students and graduates.
The earnings threshold of £21,000 at which graduates begin loan repayments will be frozen for five years, where it previously rose with average earnings. This change will be backdated to students who started in 2012 and will affect students who have already graduated. According to the Institute for Fiscal Studies, the change means that, on average, graduates will pay back £3,000 more – with those earning a median graduate income paying £6000. The impact is regressive – hitting those graduates on lower and middle incomes more than those on higher incomes.
Students and graduates who took out a loan since 2012 should feel mistreated. They are, in effect, victims of government mis-selling. If a bank behaved like this, we’d be justifiably outraged.
The application of these changes to existing students and graduates with loans is totally unacceptable and will undermine trust in the government’s student finance information. In 2011, not long after I had finished my term as president of the National Union of Students, I was asked by the Conservatives’ higher education minister, David Willetts, to help with an independent campaign on student finance information headed up by Martin Lewis at moneysavingexpert.com. As an opponent of the coalition’s higher education reforms, I wanted to make sure students that students could make informed decisions because I was afraid that students from disadvantaged backgrounds might miss out on the life changing opportunities that university can offer.
I helped the government in good faith and feel personally betrayed by their behaviour, (something I made clear to the chancellor which you can watch here) but that is nothing compared with the betrayal of students who had taken out loans on terms set out at the time and will now see their repayment conditions changed in a way that will hit their pockets.
If this were not bad enough, Osborne has announced that he is scrapping bursaries for nursing students and replacing them with loans. In what world is it right or fair to launch an assault on the very people who look after us when we are at our most vulnerable? Nurses deserve nothing but our respect and admiration, but instead they have been let down like other parts of the NHS by this Conservative government.
In fact, this is a double-whammy for nursing students. As their starting salary is just over £21,000 they will not only lose bursaries going forward from 2017, but will then be subject to the threshold freeze upon graduation in 2020. I think nurses should be paid more for the job they do, and I am deeply concerned these changes will put people off the profession.
Finally, in failing to meet a commitment by changing the loan repayments threshold and in taking away bursaries, Osborne is going to hit mature students. Data from the Higher Education Statistics Agency shows that the number of over-26-year-olds studying at university has declined by 23 per cent, and the University and Colleges Admissions Service has shown that ove-21s were already deterred by the £9,000 fees introduced in 2012.
The vice-chancellor of the University of West England has pointed out that ‘four in 10 of those mature students come from disadvantaged or low participation backgrounds’ – and that those students make up 60 per cent of the nursing cohort. This is a risk to the profession and one that lets down mature students.
Osborne must rethink these changes and work to improve fairness for mature students, nursing students and students in general. This is fundamentally about trust and decency, and a failure to rectify it could have serious consequences for both disadvantaged students and the NHS.
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Wes Streeting is member of parliament for Ilford North and a member of the Treasury select committee. He tweets @WesStreeting