How to ensure university grants arrive on time for those who need them most

José Montalbán Castilla, Rosa Sanchis-Guarner

20 Dec, 2023

University grants are the central public policy for trying to equalise access to higher education for young people from socio-economically disadvantaged families. In Spain they have a coverage of approximately 25%, and are awarded on the basis of income level and family size, conditional on meeting minimum academic requirements. In this respect the Spanish system is comparable to those of other countries, but not in one feature that is crucial for it to work as a creator of opportunities: grants in Spain arrive late for those who need them.

In this, Spain is a global anomaly with a fundamental design flaw: grants are awarded and paid close to the end of the academic year. On average, after the first semester, that is, from February, when they are needed from September.

This anomaly seriously harms access to higher education for low-income students, since the grant awarded to help them get into university arrives long after they have started.

To solve this, we propose:

Bringing forward and unifying universities’ academic calendars so that both the end of the academic year and enrolment for the following year are completed before the summer.
Using income from two years before the grant application, so that submitting documents does not have to be delayed until the end of the income tax campaign, from late June onwards, but can instead start earlier using the previous year’s tax return.
Assigning the Ministry of Finance the task of reviewing applications to verify the economic requirements, which would ease the subsequent review by universities’ grant units, which have limited human resources. This would reduce their workload by around 30% of applications (some 90,000 a year), which are usually rejected on these grounds.

Assuming the three measures proposed above are implemented, the main obstacle to paying grants on time is that they are funded with money from two different budget years: grants begin to be paid each academic year with the money left over from the General State Budget (PGE) at the end of the calendar year (October-December), and finish being paid with PGE money from the following calendar year (from January). This means that, even if we removed the obstacles so that grants were awarded between October and December, there would not be enough money to fund them in the first year of the correction or while it is taking place: approximately 80% of the budget would already have been spent paying the remaining grants from the previous academic year. We therefore also propose:

Increasing the grants budget on an extraordinary basis for a single budget year only. This would change the pace of awards and payments for all future grant calls without implying any increase in structural spending, because the following year it would return to the usual volume. The size of this extra spending would not be significant either: university grants account for less than 2% of the PGE budget line for education, slightly above €1,000M. To give an order of magnitude: that extra €1,000M for that year would represent less than 5% of the increase in social spending in the 2023 PGE compared with 2022, which was more than €20,000M. One possibility, not without its complexities, is to use an Addendum to the Recovery Funds to finance this extraordinary spending increase in the transition year.