The amount of money Scottish students can borrow is set to jump massively next year at the same time as the number of university places for home undergraduates plummets.
A new report by the Institute for Fiscal Studies (IFS) said the Scottish Government was now spending around £28,700 more per student than it would if it were to adopt English arrangements for higher education funding and bring in tuition fees.
Currently, £900 million is spent each year on tuition for Scottish undergraduates who stay in Scotland to study.
The IFS say this is equivalent to £30,000 per student over their whole degree, which is “similar to funding per student in England, where degrees are typically a year shorter.”
Funding for places has dropped by around 19% in real terms per student over the last decade and is set to drop by 3.6% in 2024/25.
Under the current system, the IFS say that “boosting per-student funding requires cuts to student numbers or reallocating spending from other areas of the Scottish Budget.”
The Scottish Government has recently hiked support for students’ living costs by increasing the amount students can borrow by £2,400 a year.
In their analysis, the researchers say that if there is a full take-up of living cost support, these changes would increase average lifetime loan repayments in real terms by around £5,000.
The IFS suggests that graduates, on average, will repay two-thirds of this additional loan, with the UK government meeting the cost of the remaining third in the long run as unpaid loans are eventually written off and paid for by the taxpayer.
Support for the living costs of Scottish students is worth around £600 million each year, through a mix of loans and grants.
