Maintenance grants for university students from low-income families are to be scrapped and converted into loans, in the Government’s next round of spending cuts.
George Osborne will announce the move when he presents the first all-Conservative Budget since 1996, setting the agenda for the party's five-year parliament following its victory in May.
The Chancellor will say: “Our long-term economic plan is working. But the greatest mistake this country could make would be to think all our problems are solved.
“You only have to look at the crisis unfolding in Greece as I speak to realise that if a country is not in control of its borrowing, the borrowing takes control of the country.”
Currently, students in England and Wales from families with annual household incomes of £25,000 or less qualify for maintenance grants of £3,387 a year.
If the family’s income is £30,000, the grant falls to £2,441; at £35,000 to £1,494 and then at £40,000 to £547. No grant is paid when household income is more than £42,620.
The grants are not repaid, unlike student loans which cover tuition fees of up to £9,000 a year, which graduates start to pay off when their income reaches £21,000 a year.
The Chancellor's move to scrap maintenance to lower-income students is just part of a planned £12bn in welfare cuts.
The news means that it is even more important than ever to inform young people of the alternatives to university, many of which are free or paid. Check out our apprenticeship and school leaver advice pages to find out more.