Analysis of this year’s A-level results shows that maths is an increasingly popular subject choice, which is probably just as well given the finance issues that new university students have to get their heads around.

Ever since higher education became a mass participation event rather than a rite of passage for a privileged few, successive governments have struggled to get to grips with the financial implications.

Universities too. The decision to allow universities to (in most cases) almost treble their tuition fees from last September focused minds afresh on the costs of higher education.

From this autumn most undergraduates will be paying £3,070 a year – the top rate that universities can charge – just to study their chosen course. That’s before they start budgeting for nights down at the bar and other general living expenses.

Keen that cost should not be seen as a barrier to higher education (and, no doubt, to accelerate the numbers entering English universities in line with targets), the government is dramatically widening access to state support by significantly raising the income threshold for student grants.

Making one of his first policy announcements as prime minister in July, Gordon Brown said: “Nobody should be held back from realising their potential by fears that they will not be able to afford to go to university or that they will graduate with unmanageable levels of debt.”

So, from September 2008, new full-time undergraduate students from England who come from families earning up to £25,000 will be entitled to a full grant. That compares to the current threshold of eligibility of just under £18,000.

In addition, the earnings ceiling for eligibility for the lowest level of grant has been raised by more than 56% from £38,331 to £60,000.

The change is expected to benefit 250,000 students, with 50,000 more each year qualifying for a maximum sum currently worth £2,765 a year. This will result in two-thirds of students receiving some form of grant, compared with just over half now.

It should reduce dependence on student loans, introduced in 1998, when the grant system was last overhauled. Loans don’t have to be paid back until students have finished their degree and are earning more than £15,000. This year they can take out a maintenance loan of up to £4,510 if they are living away from home and outside London (£6,315 in London), and those living at home can borrow up to £3,495.

Top-up fees are leaving students graduating with massive debts. But the good news is that from 2012 graduates will have the option of taking “repayment holidays” for up to five years, and any outstanding debt will be written off after 25 years (35 for Scottish students).

There are concerns, however, that what the government has given with one hand could be taken away by the universities with the other. When higher tuition fees were introduced last year, they moved quickly to redistribute proportions of their extra fee income in the form of means-tested bursaries and academically-based scholarships, assessed on factors such as A-level grades, subjects studied at school and where students live. The thresholds to qualify for these are often linked to government income thresholds set for maintenance grants.

Universities charging the top rate for their courses have to pay a minimum bursary – currently £305 – to all on full grants, but in reality they tend to pay a lot more, usually £1,000 a year.

There are serious financial implications for most universities if they adjust bursary thresholds in line with the government changes to grant qualification. Cambridge, for example, announced earlier this month that it would extend its full bursary to all students from homes where household income was £25,000 or under – in line with the government moves.

The knock-on effect of that will be to raise Cambridge’s annual bursary spend from £6m to £7m by 2011-12. For bigger universities, the costs will be proportionately higher.

Consequently, many are reviewing their provision for next September. The schemes outlined in each of our university profiles (see pages 10-56) could change significantly.

Newcastle University is among those reviewing its bursary structure. Currently, 29% of new students benefit from a three-tier system. Those from families earning £17,910 or less qualify for £1,200 a year, those from households with incomes of up to £25,583 get £900 annually and students where family income is up to £30,699 receive £600.

The real effects of the increase in grant thresholds on bursaries will not be clear until the end of October when higher education institutions (HEIs) have to submit new access agreements (which set out their bursary spend) to the Office for Fair Access (Offa). This body safeguards and promotes fair university entry, particularly for students from low income groups.

“Universities are reviewing access agreements individually, as all such agreements and student populations differ,” says Professor Rick Trainor, president of Universities UK and principal of King’s College London.

“Those who aligned their bursaries with the government’s student support thresholds may find that the number of eligible students will increase dramatically. HEIs will take steps to manage this within their budgets.”

Universities have a number of options if they want to keep within existing expenditure. They could freeze support at the current levels or increase the threshold for those on full grants and reduce it for students on partial grants who will now be getting new or extra money from the government. Alternatively they could raise the thresholds but reduce the value of the bursary, or reduce the number or level of scholarships.

David Barrett, assistant director at Offa, does not expect students to lose out as a result of the changes. “It is clear from what the government has done that it is looking to help more substantially a greater number of lower income students, and we would expect that would have a positive impact on their decisions to study, and certainly about their finances,” he says.

Of course, those universities that provide bursaries based on different criteria should not be affected by the change at all. Some – such as Leeds Met, Leeds Trinity & All Saints, Thames Valley and Greenwich – effectively discount their degrees across the board, charging as little as £2,000 against the present ceiling of £3,070 elsewhere.

The University of Central Lancashire gives £1,000 to all students from households where the main wage earner makes less than £60,000 a year. Out of every academic year, 95% of new students qualify for the money. At London South Bank University, a universal grant means that everyone gets £2,250 over three years.

However, most universities charge the top rate for fees and the real variations come in the value of scholarships and bursaries they offer. That won’t change with the government’s announcement on grants. The devil will be in the detail, and next year’s bursary and scholarship packages may look very different to those on offer now.

Barrett advises students to compare what bursaries and scholaships are available, as well as the grades universities are asking for. It’s up to you to do the maths.

For tips on student finances, finding summer jobs and advice on gap years visit: http://uk.biz.yahoo.com/student , www.thebigchoice.com , www.e4s.co.uk

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