Levitate Student: NHS Bursaries

NHS Bursaries - changes ahead

In the Autumn Statement Mr Osborne proposed changes to how higher education students on NHS courses are to be funded.

On www.gov.uk the government provide more detail in this Policy Paper.

There has been quite a mixed reaction to the proposals from across the sector from the Bursary or Bust campaign, protests from the NUS, to the Chief executive of RCN calling the proposal “not helpful”, to organisations such a Universities UK welcoming the change.

At face value it seems does seem detrimental to the student to replace a system which pays for tuition and provides a non repayable bursary for maintenance with a system of student loans to cover the both these costs.

But as ever with Student Money matters is not as straightforward as the headlines imply.

Here at Levitate Student we like to keep things simple, but also help students make informed choices. So here is our perspective with information and links to help.

Bursaries

Bursaries and grants are forms of funding for study that in general don’t need to be repaid. This is great especially if those grants and bursaries are sufficient to cover all the costs associated with a course. The problem with bursaries is they often have to be limited for them to be affordable to the provider and rarely cover all the costs, so other funding is needed to supplement them.

Some students may be in the fortunate position to be able manage on any awarded living cost bursary (or even without one) perhaps with the support of parents, partner, family, saving, working etc. Such students will benefit, under the currents system of funding for NHS courses, from a debt free higher education.

Prospective students like these may well be aggrieved by the system changing. They may not much like that to afford to pay the tuition fees themselves, they will have no choice but to take out a Tuition Fee Loan and be indebted to the government according to the repayment terms.

What about students who don’t have financial back up from family/saving?

Well let’s start with how NHS courses are currently funded for students who ordinarily live in England. We will include links so you know where to look for information yourself.

What subjects are considered to be NHS Courses?

Start with www.gov.uk information on eligibility – the courses are listed there.

Also there are details of the current package of funding for NHS students.

Funding for NHS students is administered by different two funding agencies and potentially could include

·        fees paid,

·        a bursary

·        a £1,000 grant

·        support for placement costs

·        help for student parents and disabled students

and

·        a reduced Maintenance Loan (if eligible).

     This is “reduced” as it is less than the loans

     a mainstream funded student might be able

     to claim (see below).

So let’s start with a simple example of a single student Ben. He is aged under 25, he has no dependents and is not disabled. This student started his Dietetics degree in Sheffield in September 2015. At the same time, his friend Liam from his home town of Birmingham is starting and Events Management degree in Leeds. Liam is also single, no dependents, and is not disabled. Neither Ben nor Liam has studied at Higher Education level before.

Both Ben and Liam come from homes where the household income is assessed by the above funding agencies to be under £25,000. So let’s compare side by side what they are eligible to receive.

Table A

Academic Year 2015/16
Student	Ben – Dietetics Degree	Liam – Events Management
Fee	Paid by NHS	£9k Tuition Fee Loan
Living Cost Support	Bursary               £2,643 Grant                  £1,000 Reduce Loan        £3,263	Maintenance Grant  £3,387 Maintenance Loan   £4,047
Total for Living Costs	£7,906	£7,434

In 2016 the government intend to make changes to the funding for mainstream funded students, removing from the package the Maintenance Grant. Liam will be okay though as these changes will just impact students who start courses after 1^st September 2016.

So now lets imagine Ben and Liam are both starting their courses in September 2017. All their personal information is the same (under 25, no dependents, etc).

How might their funding compare?

These assumptions are based on figures currently available for academic year 2016/17 but which could be adjusted before 2016/17.

Table B

Academic Year 2017/18
Student	Ben – Dietetics Degree	Liam – Events Management
Fee	£9k Tuition Fee Loan	£9k Tuition Fee Loan
Living Cost Support	Maintenance Loan   £8,200	Maintenance Loan   £8,200
Total for Living Costs	£8,200	£8,200

So under the NHS Bursary Scheme in 2015

·        Ben will borrow for a 3 year course £9,789

·        Liam in 2015 would borrow £49,302

In the 2017/18 academic year example they will both borrow £51,600

Some might argue that the increase student loan debt will put potential NHS students off – it’s true, it might.

Some might argue that making the funding the same means that students will choose courses based on the content, and suitability to their goals etc rather than funding package. Fair point as many students who are funded by the the Secretary of State for Health do not end up working in the NHS.

There seems to be debate around whether or not it’s a positive consequence that the changes will mean many more students will be able to apply for NHS funded courses.

There are lots of articles available for you to read on the debate to help shape your view. For our blog we will steer away from that and focus on the student income and repayment.

The pay back

It’s not easy to work out what a graduate might pay back to the government over the potential 30 year student loan repayment term.

It’s key to remember that what students pay back into the public purse is linked to earnings beyond graduation (or the end of the course) and not to what they borrowed.

There is a lack of calculators to help students explore the repayment matter. Caution is needed not to be too reliant on the accuracy of them. Also only use calculators from trusted sources.

That said they can be useful tools for indication purposes at least – so let’s use an on-line calculator to look at what Ben and Liam might pay back under the current and proposed systems.

Let's use the one provided by Martin Lewis at www.moneysavingexpert.com

We recommend you read the whole article on this site so you understand the assumptions built into the calculator.

This time let's assume the course start date for Ben and Liam is September 2016. So the changes for Liam will be in place but Ben will be on the current system of funding for NHS students.

Table C

Academic Year 2016/17
Student	Ben – Dietetics Degree	Liam – Events Management
Fee	Paid by NHS	£9k Tuition Fee Loan
Living Cost Support	Bursary               £2,643 Grant                  £1,000 Reduce Loan        £3,263	Maintenance Loan   £8,200
Total for Living Costs	£7,906	£8,200

For the NHS bursary in the above table we have had to use the 2015/16 figures which could be slightly higher in 16/17.

Remember by the end of a three year course this is what the chums will have borrowed

•     Ben will borrow for a 3 year course £9,789
•    Liam will borrow for a 3 year course £51,600

If you look at the calculator you can use the slide bars to enter the annual fee and Maintenance Loan borrowed each year (or manually enter the figure which we found easier). The calculator has some in built assumption which you can play with too.

So for Liam select the £9,000 fee tab then

Tuition Fee – slide to £9,000

Maintenance Loan – slide to £8,200

For starting salary let's pick - £21,000

Results

The calculator shows a total borrowing over the course of £51,600

amount paid back by Liam in 30 yrs £20,750

Now let’s try in for Ben, who thinks he is lucky on an NHS course as he had his fees paid and didn’t have to borrow anywhere near as much as Liam.

Tuition Fee – slide to £0

Maintenance Loan – slide to £3,263

For starting salary let’s pick - £21,000

The calculator shows for a total borrowing over the course of £9,789

amount paid back by Ben in 30 yrs - £20,750

So Ben who borrowed £41,811 less than Liam is no better off than his chum.

Interesting eh? 

In addition.....

Another thing that impacts NHS students is the way their funding can affect welfare benefits. Most full-time Higher Education students are not eligible to receive welfare benefits. However there are exceptions such as lone parents, student couples with children, disabled students.

Where a student is eligible for benefits, more of an NHS student’s income counts for means-tested benefits than their mainstream funded peers. So for example, imagine two students with identical circumstance renting a property, the NHS student would qualify for less housing benefits and have to make much higher contributions towards their rent. 

Also the bursary counts as income against means-tested benefits over 52 weeks of the year. In comparison, mainstream funded students only have their student income count for 42/43 benefit weeks between 1^st September and 1^st July, so in summer often receive more housing benefit, income support/job seekers allowance/universal credit etc than their NHS funded peers.

Remember Refer to the Right People - always seek advice from the funders or from a University/College Adviser.