By Mark Fairlie
Going to university has never been more expensive than it is today and recent research has found that poorer parents are now topping up their children’s maintenance loans more than wealthier families.
Save the Student’s latest National Student Money Survey found that 73% of university students got their money to survive from the Bank of Mum and Dad. On average, parents hand over £138.50 per month for each child, they support through university – equating to £1,662 per academic year.
However, an unexpected finding from the report revealed that less well-off families actually contribute more than is expected of them while richer families give less to support their children at university.
Findings from the Student Money Survey
Parents that earn under £25,000 a year are not expected to contribute anything to top-up their child’s maintenance loan, yet the findings show they still give cash support of an average of £54 a month; making them the most generous group of parents in the survey.
In fact, those with students living away from home and studying in London were found to pay as much as £151 per month more than they were expected to.
On the other hand, higher earning parents (who are expected to contribute more to their children’s maintenance loans at university), often do not meet the recommended contribution amounts.
Households earning £60,000 a year were routinely found to pay £160 a month less than the government expected them to, making them the least generous group.
Save the Student report that this is due to the fact the government fails to take real household costs into account. Those with higher incomes tend to have higher living costs, which can make supporting a child through university more difficult.
One student told Save the Student they “think that university life really depends on the income of your parents – and it shouldn’t be that way”.
How much do students get from student loans?
According to official statistics from the Student Loans Company, the average size of maintenance loans paid to students by the government is increasing on average each year.
In England, the figure rose from £4,050 in 2015/16 to £4,730 in 2016/17, wherein Wales loans rose to £4,160 from £3,500 over the same period.
Maintenance loans rose by just £100 in Scotland last year, up to £5,160, and remained at £3,090 for the third consecutive year in Northern Ireland.
In their How You’re Assessed guide, the Student Loans Company says that for “dependent students”, their parents’ income will be used to decide how much student finance they can receive.
Furthermore, the document states that “depending on their income, parents may have to contribute towards your living costs while you’re studying”.
How much are parents expected to pay towards student loans?
For a family with a combined household income of between £40k and £45k per year, the amount parents of new students for the academic year 2018/19 will be expected to contribute is as follows.
|Student’s living situation||Full award amount available||Loan amount student is entitled to||Minimum parental contribution|
|Living at home with parents||£7,324||£5,473||£1,851|
|Living away from home and studying outside London||£8,700||£6,828||£1,872|
|Living away from home and studying in London||£11,354||£9,449||£1,905|
The total amount a student’s parents will be expected to contribute to their maintenance loan all depends on their household’s collective income level.
Martin Lewis from the Money Saving Expert stresses that this system is extremely unfair to both parents and students. Since there is no legal way to force a student’s parents to “make up the difference” between what the student receives and the amount they get in their maintenance loan, this can leave the student in a difficult position.
In fact, Lewis states that “the only option for students whose parents won’t contribute is they can apply for the full loan amount as long as they can prove they’ve been financially independent for the past three years”, such as by proving they had a full-time job and that they were living off the money from it.
Since the majority of students start university at age 18 and they would, therefore, must have been financially independent since they were 15 to receive the full loan, these are very difficult criteria to meet.
What can be done to ensure students get enough to survive?
Save the Student money expert Jake Butler says “when it comes to student loans, the focus always seems to be on the £9,250 tuition fees or the extortionate interest.
“But the real issue is the insultingly low maintenance loans alongside the government’s unwillingness to admit that parents are expected to make up the shortfall.”
Butler went on to say that the government must put an end to this confusion by either being more explicit about the amount parents are expected to put towards their children’s maintenance expenses, or raising the maintenance loan amount to cover the real living costs associated with being a student.