The maintenance loan system fails every single student. It forces students with capped loans to choose between complete financial dependency, deprivation, or burning out from too much part time work. Meanwhile students from lower income backgrounds graduate with higher levels of debt, disadvantaging them for life. The most cost effective solution is to abandon the means testing of loans, and let every student live at, and leave university with, the same level of income and debts.
At the extreme, every student belonging to the top fifth of households (by income) has a loan capped at just under £4,000. Living in the mid-range townhouse accommodation at Lancaster University alone would leave them in £1,300 of debt, and they might want to eat that year. The inadequacy of the minimum loan leaves significant numbers of students in complete financial dependency to their parents, entirely reliant on their goodwill. Hardly the independent living university is supposed to foster.
But it’s not just the recipients of the minimum loan who the current system fails. A recent report commissioned by the Scottish government recommended a minimum student income of £8,100 to avoid students dropping out due to the cost of living. Every student with parental income higher than the median household income of £27,000 cannot reach that minimum income on the maintenance loan alone. That’s at least over half of all students who can’t live independently under the current system; this is not an inconvenience for a privileged few.
Part-time employment is no silver bullet for the full-time student. A friend of mine works up to thirty hours a week to cover the shortfall in her loan (her parents, with five children, can’t fulfil the financial obligation the capped size of her loan demands). How can she be expected to engage with her course to the same extent as my friend who spent the summer in New York and Paris courtesy of the money left over from his maximum loan? Why do we accept a system that demands students take one and a half occupations to keep themselves fed?
However the worst aspect of the current system is that students from the lowest income backgrounds leave university with £14,000 more debt than those from the highest income backgrounds. It’s indefensible that students from lower income backgrounds should graduate with a heavier burden than their counterparts with a more privileged upbringing. And with the recent re-election of the government that scrapped maintenance grants, we can’t expect their return any time soon.
The current tuition fee system, for all its flaws, remains effectively free at the point of use. A family with a household income of £38,000 and three children of university age would be forced to stump up a tenth of their annual income to bridge the gap between the cost of living and the size of the maintenance loan their children are capable of applying for. If we value education for its own sake, as something that can be accessed free at the point of use, then we must reject the effective up front payments that force students into dependency, overwork or bankruptcy.
Every student should have access to the minimum income levels that expert bodies have decided is essential to independent living. A student from the top half of households by income is hardly less likely than their contemporaries to pay the money back over their lifetime. Scrap the means testing of loans, and end a system that turns half of students into financial dependents, and burdens the other half with higher levels of debt than their contemporaries.