Press release

Spending Review ‘a mixed bag’ for universities and students

25 Nov 2015

The university think-tank million+ has said that the outcome of the 2015 Spending Review ‘is a mixed bag’ for both universities and students. While the headline details were announced by the Chancellor of the Exchequer in the House of Commons, a series of Treasury papers and consultation responses have also been published. These reveal that the age limit on postgraduate loans has been removed but that the earnings repayment threshold for students taking out loans from 2012 will be frozen for 5 years. As a result of this and changes to the discount rate on loans, BIS has estimated that the RAB charge on the student loan book will fall to 30% by 2020.

million+ has warmly welcomed the removal of the age limit on postgraduate loans and the announcement that there will be an extension of maintenance loans to part-time students. However the decision to cut the Student Opportunity Allocation by up to 50% in order to meet the additional costs of nursing students being transferred to the student loan system, has been described by the million+ Chair, Professor Dave Phoenix, as ‘deeply disappointing’. million+ has also said that the future of quality related research funding must be the subject of full consultation and be considered as part of the HE Green Paper.

Professor Dave Phoenix, Chair of million+ and Vice-Chancellor at London South Bank University, said:

“I welcome the Chancellor’s commitment to extend maintenance loans to part-time students and the removal of the age-limit of 30 on postgraduate loans although the requirement that students will have to study at 50% intensity will not help many of the part-time students who want to study at postgraduate level. In other respects this Spending Review is a mixed bag for both universities and students.

“Vice-Chancellors will warmly welcome the news that the Prime Minister, the Chancellor and the Home Secretary are all agreed on the need to increase the number of international students. The decisions to drop more stringent English language tests and to allow the dependants of postgraduate students to work while they are studying in the UK make good sense.

“However, the possible 50% cut in the Student Opportunity Allocation by 2019 in order to fund the additional costs of nursing and other allied health profession students being transferred to the student loan system, is deeply disappointing and a sting in the tail for universities which are at the forefront of both delivering innovative health education courses and widening access to university. The move to replace bursaries with loans must also be carefully monitored for its impact on mature students, many of whom enter these professions later in life and are a great asset to the NHS.

“While science funding has done comparatively well compared to teaching, there will still be concerns that the UK is not investing enough compared to our competitor nations especially when it comes to applied research. While the Chancellor seems to have accepted the recommendations of the Nurse Review wholesale, there must be an opportunity for universities to express their views about the future of quality-related research funding including the implications for the UK-wide research infrastructure.

“It is by no means obvious that QR funding should be transferred to ResearchUK. We expect Jo Johnson to live up to his promise that universities will be able to express their views about this and the Nurse Review more generally in their responses to the HE Green Paper.”


Notes to Editors

1. For further information or to arrange an interview with Professor Dave Phoenix please contact or call 0207 717 1658.

2. To see a full summary of the Comprehensive Spending Review 2015, click here

3. The student loan repayment threshold for Plan 2 borrowers will be frozen until April 2021. The discount rate applied to student loans will be revised to 0.7% above RPI, to bring it into line with the government’s long-term cost of borrowing. Taken together, this will reduce the government’s estimate of the long-term student loans subsidy to around 30%.

4. The government will reduce the teaching grant by £120 million in cash terms by 2019-20, but allow funding for high cost subjects to be protected in real terms. The government will work with the Director of Fair Access to ensure universities take more responsibility for widening access and social mobility, and ask the Higher Education Funding Council for England to retarget and reduce the student opportunity fund, focusing funding on institutions with the most effective outcomes.