Report estimates lack of fees, plus cuts in grants to poorer students leave middle-class families £20m a year better off

Poorer students in Scotland have been left millions of pounds worse off after cuts to government grants which middle-class families have escaped, a study of higher education funding has found.

The research by Lucy Hunter Blackburn, a former civil servant with the Scottish government, estimates that free university tuition and the cuts in grants to lower-earning students means middle-class families and students will be £20m a year better.

She estimates that the overall costs to lower-income families, including thousands of students at further education colleges, have gone up by at least £32m a year after the grant cuts forced them to take out larger loans.

"Free tuition in Scotland is the perfect middle-class, feel-good policy," Hunter Blackburn said. "It's superficially universal, but in fact it benefits the better-off most, and is funded by pushing the poorest students further and further into debt.

"The Scottish system for financing full-time students in higher education does not have the egalitarian, progressive effects commonly claimed for it."

The figures emerged in her detailed comparison of student funding across the UK for the Centre for Research in Education Inclusion and the Economic and Social Research Council. It found that for those from low-income families, Welsh students had the most generous funding packages.

Hunter Blackburn implemented the student graduate endowment scheme introduced in 2001. It was seen by critics as a fee and scrapped by Alex Salmond's first government in 2007.

She said middle-class families benefitted from several factors. The cuts in maintenance grants, which came into force for the first time last autumn, affected all eligible students and introduced a steep drop in grants for families earning more than £17,000, forcing students to stay at home or to take out larger loans to pay for their living costs.

For any family earning more than £37,000, the students save money by receiving free tuition rather than paying a one-off graduate endowment, worth £2,700 at today's prices, while facing no additional living costs. The first savings start for families earning from £31,000 upwards.

A Scottish government spokesman did not dispute Hunter Blackburn's figures but insisted the funding package tried to make the costs of studying "more sustainable and easier to pay back in the longer term" and was the most straightforward of any in the UK.

"This analysis fails to properly recognise the hugely positive impact on students of the Scottish government's commitment to providing free tuition," he said. "In England, most students have no choice but to take out loans to cover fees of up to £27,000 over three years."

However, Kezie Dugdale, Scottish Labour's education spokeswoman, said: "The SNP's [Scottish National party] choices have meant our colleges and our poorest young people have borne the brunt of the cuts. Any sort of analysis shows the SNP's policies to be achieving the opposite of what they claim.

"We need a proper conversation about how we fund universities and our colleges. But I fear that with the referendum, the UK election and the Scottish elections over the next 24 months, the SNP will have no interest whatsoever in taking this beyond the slogans that they never tire of repeating."