July Budget 2015: Osborne axes student grants and replaces them with loans

Jessica Morris
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The government said the cost student maintenance grants will double to £3bn over the next 10 years (Source: Getty)

Chancellor George Osborne has announced that student maintenance grants will be scrapped and replaced by loans, as part of his July Budget.

"From the 2016-17 academic year we will replace maintenance grants with loans for new students – loans that only have to be paid back once they earn over £21,000 a year," he said.

Non-repayable maintenance grants help students from low-income families cover rent and living costs while at university.

Currently students in England and Wales whose families earn £25,000 or less are eligible for maintenance grants of £3,387 a year.

If a student's family earns £30,000 or more then the maintenance grant falls to £2,441, at £35,000 to £1,491, and at £40,000 to £547.

It stops when a student's family earns more than £42,620.

The government worries the cost of student maintenance grants is set to double to £3bn over the next 10 years, making higher education funding unsustainable.

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