Postgraduate loans for taught Masters courses in the UK

The UK government has recently announced its plans to change the way in which postgraduate study is funded. The new system, which will come into effect in the 2016-2017 academic year, involves a system of loans for those wanting to take a taught masters degree. There is a separate proposed scheme for students embarking on a research masters or PhD, which we are covering in another post. Here, we'll describe the new scheme for the funding of taught masters degrees and how it will effect students who are planning to study at a postgraduate level in the future.

The new funding system involves maintenance loans of up to £10,000 a year for taught masters degrees in all subject areas and disciplines. This does include MBAs, but does not include PGCert (postgraduate certificate), PGDip (postgraduate diploma), or PGCE (Postgraduate Certificate in Education) certifications. The maximum amount of time which a course can take to be eligible is 2 years full time or 4 years part time. These loans will be for students who have been residing in England for at least three years before beginning their studies, and who will be studying at any degree-awarding university within the UK (which includes England, Scotland, Wales, and Northern Ireland). Students who are from the EU may be eligible for the same loans as domestic students under this scheme too, providing they meet certain criteria.

The loans will be available for both part time and full time masters degrees, as well as distance learning courses. This is good news for part time students, who have traditionally not received much in the way of funding or support in the UK. This new system recognises the increasing number of students who wish to both work and study simultaneously, or those who have caring responsibilities in addition to their studies. Part time students will receive support for both fees and maintenance for the first time under this new scheme – they will receive the same amount of money as full time students, but it will be divided across the longer time frame of the part time masters.

Previously, when they were announced in Autumn 2014, the government's proposals for postgraduate loans had specified that the recipients must be under 30 to qualify for maintenance grants. However, a report from a group of top UK universities [pdf link] found that those who chose to return to academia over the age of 30 were often from disadvantaged groups, such as those with a disability, those who had formerly been carers, or those who currently had caring responsibilities or young children. These students take longer to progress through the educational system, and so they are on average older than other students when they reach the postgraduate level. Capping the age requirement at 30 would have excluded these individuals who were most in need of support in returning to education. The government therefore agreed to raise the age requirement for maintaince loans to 60, in the hope of widening access to higher eduction.

One further issue of concern with the previous postgraduate funding structure in the UK was that students who already had an advanced degree were not eligible for support if they wanted to return to studying at a level which was equal to or lower than the qualifications which they already had. So, for example, if a student already had a masters degree in history, they would not be eligible for funding if they wishes to peruse a bachelors or masters degree in biology. This has been changed under the new system, so that students will have funding available to them to study a second degree, providing that the new degree is in a STEM subject (science, technology, engineering, or mathematics).

The UK government projects that it will spend a total of £1 billion on the new scheme by 2020, covering around 250,000 students. The repayments will be income-contingent, so students pay back at a rate set by their current income, at a a rate of 6% on income above £21,000 per year, with interest at a rate of RPI+3%. However, the scheme has received significant criticism from student groups for placing so many future students into debt. The general secretary of the University and College Union, Sally Hunt, said that the scheme “appears to be extending loans and loading more debt onto students... This approach will lead to the poorest paying most for their education.”