Wednesday, 16 April 2014

University Education in Scotland is Free

In March 2011 Alex Salmond said "The rocks will melt with the sun" before the SNP allow tuition fees in Scotland.  Under this policy Scottish and EU students pay no fees, but English, Welsh, Northern Irish & non-EU students are charged. Fair enough. However, the question is how is this policy funded?

We know that around 85,000 college places have been cut by the SNP/#YesScotland government and that Audit Scotland say further cuts may be needed. This is counter-productive as Scotland's colleges are key to giving vulnerable people a second chance by getting them back into education. 

A second area which has been hard hit is the Student Grant paid to the very poorest Scottish students. The bar chart below shows how the nationalist government is short-changing the poorest Scots. Note that the poorest Scots get the lowest grant by far. Perhaps this explains why the abolition of tuition fees has not encouraged more Scottish children from poor families to go to university. Indeed, St Andrews University accepted just five students from most deprived areas in 2012.

The low Student Grant in Scotland means that those students from the poorest backgrounds have to take out large student loans just to live. The table below shows the typical debt for students who have used up all of their student loan entitlement. Note that although fees are not charged in Scotland, debt is still high. This data assumes that poor students elsewhere in the UK do not apply for the many university fee reduction scholarships available to poorer students (typically worth ~£5,000). 

It should also be noted that Graduates in England repay their loan once their income exceeds £21,000. In Scotland the threshold is just £16,910. This is really important as the loan expires (paid or not) after 30 years. It is possible to look at what Scottish and English students would repay over the 30 year period if they start work on a salary of £17,000 per year and receive an increment of 3% per year (not bad!). As the plot shows, the poorest Scottish students pay more than comparable English students until 2049(!) - by which time the debt has been written off.

So it appears that education in Scotland is only free with this SNP/#YesScotland policy if you can afford to pay for it. 

For a more detailed look at this paradox, please read this


  1. This comment has been removed by a blog administrator.

    1. This comment has been removed by the author.

  2. This comment has been removed by a blog administrator.

    1. This comment has been removed by the author.

    2. This comment has been removed by a blog administrator.

    3. This comment has been removed by the author.

    4. This comment has been removed by the author.

    5. This comment has been removed by a blog administrator.

    6. This comment has been removed by a blog administrator.

  3. This comment has been removed by a blog administrator.

  4. This comment has been removed by a blog administrator.

    1. This comment has been removed by the author.

  5. @Brigadoon,

    I notice that my comments above have been removed. I will give you the benefit of the doubt and hope that this was in error, but removal of reasoned comments that disprove arguments seems to be becoming endemic amoung certain circles of the BT campaign.

    Luckily, I saved my comments on your points and have attached below in the hope that it allows for a balanced debate.

    For the record, I am not a nationalist, I am not affiliated with any political parties, I am not an official Yes campaigner and I certainly do not vote SNP nor do I like Salmond. I just see more potential in Scotland as an independent nation than I do as part of the UK

    By your figures in the table above (reference the source please) figures for total debt possible taking on highest loan amount and highest tuition fees, are:

    Scotland (S) – £27,000
    England (E) - £38, 586
    NI - £25,575
    Wales - £38,706

    Factoring out the loan, which I stress again is optional, and factoring only the tuition fee cost (based on four years in Scotland, three in England) total debt possible is:

    Scotland - £0 (fees paid at point of use by Gov’t)
    England - £27,000
    NI – £11,055
    Wales - £27,000

    The maximum amount available in government assistance (ie. grants (g) (which do not require to be repaid) and Loans (l) (which do) over that same period) is

    Scotland – (g) £7000 (l) £27,000 total = £34,000
    England – (g) £10,161 (l) £11,586 total = £21,747
    NI – (g) £10,425 (l) £14,520 total = £24,945
    W – (g) £15,483 (l) £11.705 total = £27,189

    The total minimum amount payable when subtracting the cost of the grant available from tuition fees are:

    Scotland - £0 (technically, if the maximum grant is applied for, you will have an additional £7000 in the black over four years)
    England - £16,839
    NI - £630
    Wales - £11,517

    Amount of debt due if the grant is used to pay off tuition fees (when maximum loan has been applied for)
    Scotland - £20,000
    England - £28,425
    NI - £15,150
    Wales – £23,223

    So in all the above scenarios, the English system comes off worst value in terms of debt due. NI comes off best if the grant is used to pay off the debt incurred. Scotland come off best if loan is factored out (and this is maximum loan, there are various levels dependant on means assessment).

    However in Scotland, you can in theory not only have a free university course as fees are paid for, you can also have an additional £7000 grant. If you decided to take out a loan, one of up to £27k is available, but you can effectively have a free further education and be £7k better off for it.

    In England, the minimum you need to pay for your education is £27,000, based on the £9k p/a fees. A grant is available for £10,161 max, meaning the minimum payable for a three year university course is £16,839.
    NI fares better significantly, and Wales is between the two.

    While admittedly the grant size is larger in E, NI & W, the grant money does not even cover the cost of the tuition fees.
    When factoring out the loan (which is optional, have I mentioned that?) not only can Scottish student receive a free education, they can also get up to £7000 over the duration of their course. Obviously, if a loan was taken out, the amount of debt increases, but the maximum debt is well below English and Welsh universities, and on par with Wales.

  6. As I demonstrated in the figures above, the theoretical scenario where a poor student taking out maximum loan and maximum grant to cover cost of tuition fee is actually that presented in NI due to lower fees and higher grant. However this is all up front payment cost. The Scottish system, whilst not perfect, allows for a much higher loan if it is required to be repaid over time, while allowing free at point of service education. The English system comes off the worst in all regards (and I do hate this Them and Us scenario, don’t get me wrong, I believe higher education that is accessible for those that most deserve it regardless of financial means)
    A poor student in England would have to take out the grant simply to cover a proportion of their tuition fee costs and still be left with nearly £17k debt, which would then need to be covered by taking out a loan.
    A Scottish student does not need to use the grant money to cover tuition, and therefore is not only free from the burden of the fee debt but has an extra £7k potentially. A loan can then be taken out of whatever value is needed, and until that figure reaches the near £17k an English student has taken out for the above reasons, remains better off.

    The loan, being optional, means that if a student does not feel they can afford to take out the full £27,000, a much higher total than any other country, they can look for alternate means of funding (dare I say it, part time work.). The point is the money is there as the fail safe. The English student has no option but to take out the loan just to cover tuition fees let alone living costs AND look for additional means of funding.

    Therefore I fail to see in what way you think that people are being short-changed under the Scottish system?

    I am interested to know which of the above models you would you most advocate (E, S, NI or W), and why?

    1. You miss the point. A loan is not a grant, it's a loan. In England, poor students can also get a grant (not a loan) from the university. You have also not looked at the repayment threshold or horizon.

  7. You are missing the far more significant point, in that the Scottish system means a much smaller loan is required, if at all, compared to that in the English system. At no point have I insinuated there is not a grant available in England, Wales or NI.

    You conclude by stating:

    "So it appears that education in Scotland is only free with this SNP policy if you can afford to pay for it."

    This is clearly untrue as no loan is required for the education component, just the living costs if it is deemed required based on an induviduals situation, and only after a grant is awarded first. In England there is no option but to use your grant and a significant portion of your loan purely for tuition fees, something that is totally mitigated in Scotland. How are you failing to understand this?

    There are plentifull ways to mitigate taking out a loan which is only needed to cover living costs, if any are incurred, such as a part time job, living with relatives etc. I dont know if this is still offered but there used to be a daily travel bursary offered in Scotland as well for those choosing to stay at home and travel to University every day (there was, obviously, a limit to what constitued a reasonable commute.)

    As a consequence of not needing to take out as much of a loan, if at all, to achive the same level of education as offered in the English system, a smaller loan will mean a smaller repayment. I believe repayment threshold levels are based on the average wage, which is higher in England than in Scotland. Living costs are, on the whole, lower in Scotland than in England.

    I am acutely aware of the difference between a loan and a grant. I have been through the Scottish system fairly recently, and am perfectly aware of what level of debt have incurred. I am also aware through a close family member from the same background who attended an English university that they have incurred significantly more debt as a consequnce to having taking out a loan to cover tuition fees. I am also more than aware that it would not have been financially possible for me to attend University without the Scottish system in place; I would simply not have been able to afford the tuition fees of the English model, let alone the living cost.

    I ask again, which of the above models you would you most advocate (E, S, NI or W), and why?

    Have you been looking for a loan?Do you need an urgent personal or business loan?contact Dennis Hopkins Finance Home he help me with a loan of $300.000 some days ago after been scammed of $2500 from a woman claiming to been a loan lender but i thank God today that i got my loan worth $300.000.Feel free to contact the company for a genuine financial service. Email: or or Tel: USA +12404374240 .He is a trust worthy man. No Upfront Fees