How much does the Scottish Government spend on higher education, and what challenges does it face on university funding and living cost support?
Education is a ‘devolved matter’ in the UK, and there has been growing divergence in education policies among the four parts of the UK since 1999. The Scottish Government has made starkly different policy decisions on how higher education should be funded, and how the costs should be shared between graduates and taxpayers, in part reflecting different priorities and objectives. Indeed, higher education is one area where Scotland’s public service provision has long appeared more generous than that in England, with students who choose to stay in Scotland for university not required to pay any tuition fees. Instead, the costs of their teaching are all met by the Scottish Government, at a cost of around £900 million each year. In addition, Scotland still provides the poorest students with non-repayable bursaries of up to £2,000 per year towards their living costs, alongside income-contingent loans of at least £6,000 per year.
Recently announced changes will see the system become more generous for students and graduates next year. First, students will be eligible for larger living costs loans, delivering on a 2021 commitment to provide a total package of student support ‘the equivalent of the Living Wage’ by 2024–25. Second, the loan repayment threshold (above which graduates make repayments on their loans) will increase from £27,660 to £31,395 in April 2024, reducing monthly repayments for many graduates. Importantly, under current funding arrangements, the UK government provides up-front funding for loans issued to Scottish students, and ring-fenced funding for any eventual loan write-offs. This means increases in generosity through the loan system do not impact the amount the Scottish Government has to spend on competing policy priorities, as determined at the Scottish Budget each year.
