Are student loans fit for purpose ?

(94 Posts)
cumfy Thu 22-Aug-13 14:31:53

I just wondered since there seems to be quite a few bursary/fee waiver offers dependent on proof of low income of the parents.

Surely this shouldn't be an issue any more ?

I would have hoped that if student loans were working properly, access would be equal and adequate for all.

larry5 Thu 22-Aug-13 19:19:04

Dd got the full grant and the maximum loan allowed with the grant and managed to live on that amount. While she was home during the holidays we fed her but did not ask for rent.

She made sure that she budgeted for holiday times so that after her rent had been paid she divided the rest of her money by 52 and only spent that amount as a maximum.

zizza Fri 23-Aug-13 09:34:32

Hubby and I have been discussing this a lot over the last few days! Uni students are adults and are treated as such in most ways - info isn't shared with parents unless consent given, they have to sign their leases, have their own accounts/loans etc - so why are parents' incomes so important? We fall into a middle income bracket I'd say, so dd only gets the loan, but if we decided not to give her extra money for some reason (we could be in severe debt, might've fallen out with her etc) she would not be able to go to uni as her loan doesn't even pay anywhere near her accommodation in the first year. How is that fair?

Imho everyone should get the same loan and there should only be grants for low income families to help out much earlier with initial expenses like accommodation deposit/first payment, initial expenses (books/equipment/special clothing).

Moominmammacat Fri 23-Aug-13 09:47:52

It's a dreadful system. The thought of paying nine per cent of your income for evermore to service the interest on the debt ... And still most won't repay the loan. It's 6'6 % interest, you know ...

wordfactory Fri 23-Aug-13 09:48:00

No I don't think it is!

The loans for fees are fine. Everyone can get them and yes, the repayments are doable.

However, the loans for living expenses are based to a certain extent upon a student's parents' income. The assumption is that the parents will make up the shortfall. And many can't/won't.

Also, even if a student can access the full loan it doesn't always cover everything. I work in one univeristy where accommodation is very reasonable and there is tons of help. But I work in another slap bang in the middle of London and the univeristy accommodation is sparce and private rentals are high.

wordfactory Fri 23-Aug-13 09:49:48

Sorry pressed too soon. So the assumption is that parents will still help out even if the student can access the lot. And many parents can't/won't.

We're soon going to have a system where only those with willing and able parents can access the best universities and courses and the rest will stay at home and go to their nearest.

TheAwfulDaughter Fri 23-Aug-13 10:04:57

All landlords in uni towns offer around 9 month contracts. My one last year was 41 week and I came home in summer.

But to answer the question, they're not. I certainly believe grants should be available to students from low income backgrounds- but we need a system that gives all students the same loan.

I disagree with the concept of smaller loans but bigger grants for those from low income families. I don't see how your future student loan repayments have anything to do with what your mum and dad earn.

We standardised loan, tailored to the accommodation prices and living costs of that region, for everyone- with grants at the start of each term to help low income families who have trouble with moving costs and getting their kids set up, books bought, transport, ect...

TheAwfulDaughter Fri 23-Aug-13 10:05:33

All landlords in uni towns offer around 9 month contracts. My one last year was 41 week and I came home in summer.

But to answer the question, they're not. I certainly believe grants should be available to students from low income backgrounds- but we need a system that gives all students the same loan.

I disagree with the concept of smaller loans but bigger grants for those from low income families. I don't see how your future student loan repayments have anything to do with what your mum and dad earn.

We need standardised loan, tailored to the accommodation prices and living costs of that region, for everyone- with grants at the start of each term to help low income families who have trouble with moving costs and getting their kids set up, books bought, transport, ect...

TheAwfulDaughter Fri 23-Aug-13 10:16:40

I do have a massive chip on my shoulder about this subject though. I've worked since I was 14 throughout GCSEs and A-levels, and I thought with uni I could finally focus on something as I would get a loan. wrooooong

Family are about a grand over the threshold and I'm in minimum territory. I get a food allowance from them, and my shortfall found for my rent, but I work about 24 hours a week at uni. I'm fine, definitely not in student poverty, but oh my- it irks me so much the Facebook status go up around bursary and loan time where people are booking holidays and exclaiming 'Topshop time' and thanking student finance England. Especially when I have friends over the threshold who are student poverty due to tight parents, disabled siblings who have to have their education privately or lack of jobs in the area.

happyinherts Fri 23-Aug-13 14:37:55

And scholarships???? My son has received two. The national scholarship for 'disadvantaged students' (low income etc) and a elite sports award. In total these would be £3000. However, granted by means of payment of tuition fee for £1000 and accommodation loan £2000.

Just how is that helpful to a poor student needing nearly £200 of kit, plus sports membership fees and travel? Unimpressed that this total is deducted from total loan which will only show a gain when student in employment earning over a certain amount - and by then I guess interest / inflation will have eaten that up.

So much for helping poorer students with scholarships. Seriously unimpressed.

SlowlorisIncognito Fri 23-Aug-13 14:41:50

No, they aren't.

1- They are paid too late. I understand why SFE want proof of attendance, but universities will ask for accomadation deposits (and sometimes the first rent payment!) before the first payment will be recieved. Also, the equiptment/textbooks universities ask students to buy will often cost £100-300, even if bought second hand. Many 18 year olds don't have access to, say £600 before they've even started. This puts students from less well off backgrounds at an imediate disadvantage.

2- They often aren't enough to live on, once rent has been taken into account. Rent in halls is often very high, and even renting a room in a shared house is more expensive in student areas. Being charged £5000 for halls is not uncommon. This leaves the majority of students reliant on family support or getting a part time job. Even with the maximum loan/grant available, a student would struggle to absorb an unexpected emergancy cost.

3- Household income is an inadequate way of means testing for all sorts of reasons. It's also wrong to expect parents to support their adult children who have left home.

4- The system of applying is pretty complicated and off-putting. Staff at call centres often give conflicting advice. The system is very slow moving if you have a change of circumstance. Ultimately, this results in late payment of loans for students, meaning they can end up facing real financial hardship.

I think a standardised maintenence loan, for all students, is fairest. It should absolutely cover the cost of living (including a small emergancy fund) and being able to buy all course materials. The application process would then be simplified. First year students should get an advance on their loan paid when they complete online enrollment at their university, so they can put a deposit down on accomadation and buy everything they need for uni.

twistyfeet Fri 23-Aug-13 14:52:02

Both my boys are in the same university town and they have not found one landlord that offers a 41 week contract. So they pay for 52 weeks leaving them £1000 for food/travel/books etc for the year. Both come home in the summer and we feed them out of our benefits. Its fucking tough. Last year one managed to find a part time summer job, this year neither did despite hundreds of applications.
And we still havent heard about this years grant/loan despite doing the paperwork months ago <bangs head on desk>
Number 1 wants to do a Masters degree. There's no funding for that but all PhD's seem to require them now. No idea what we will do as we cannot feed him for a whole year while he does a Masters and how will he pay for it?

fussychica England Sat 24-Aug-13 11:36:54

DS is English but studying at university in Wales so not entitled to anything under the National Scholarship programme.

Be aware that if your DCs are going to Uni outside England the level of bursaries/grants/scholarships available to them may be quite different/non existent compared to those going to a university in England.

BeckAndCall Sat 24-Aug-13 11:42:22

Well I don't know what towns you're referring to awfuldaughter. But they certainly don't include either of the two cities where my DC are at uni! Only 12month contracts aRe available through private landlords there.

And funnily enough, in conversation with other friends with kids the same age at unis in other cities across the UK, that's not their experience either.

So another one pointing out here that the student loan doesn't even cover the cost of accommodation.

yellowballoons Sat 24-Aug-13 11:49:56

Some PhDs have funding. Masters generally do not.

cumfy Sat 24-Aug-13 13:59:53

I am surprised that some are experiencing the availability of only 12 month tenancies.

Even if there are few specific 9 month contracts being offered, most shorthold contracts run on a 6 month + month-by-month roll over of the tenancy.

Clearly, students can just give notice at month 8 on such tenancies.

BeckAndCall Sat 24-Aug-13 14:14:27

Stunt lets just don't work at way, cumfy

yellowballoons Sat 24-Aug-13 14:19:25

There used to be a few 9 month student let contracts, but they are getting less and less, to the point of not even bothering to look or expect them any more.

PlotTwist Sat 24-Aug-13 14:34:22

The amount of money needed is frightening. My ds is off to uni in a couple of weeks. Already I've had to find £400 for his Halls deposit. Not a massive sum, but I'm on JSA. If he was going to the local uni, I'd be happy for him to live at home and not charge him any sort of board money, but his uni course is at the other end of the country. Trying to get the money together for the stuff he needs to take with him (on top of the school stuff needed by his younger sisters) has been a worry. I'm trying to support him as much as I can, but financially, it's very worrying.

cumfy Sat 24-Aug-13 15:27:48

I'm not quite sure what you're trying to say Beck, but 6 month shorthold tenancies are very standard.

yellowballoons Sat 24-Aug-13 15:31:51

For students hmm
Which university towns?

sayithowitis Sat 24-Aug-13 19:28:16

DC1 has been in a couple of shared student houses and we have always acted as guarantor. This means we have copies of the tenancy agreements. In every one it has been made clear that the tenancy is for a full 12 month year and that even if the students give notice earlier, there will be a penalty equivalent to the number of months rent still left to pay.

DC1 gets the usual student loans for tuition and maintenance. He gets an extra maintenance loan which is means tested against DH and my income. He also gets a grant, again means tested against DH and my income. However, he actually only receives half the grant on top of his loans as the other half is used by student finance to reduce the amount of his loans. All well and good that it reduces what he needs to pay back, BUT it doesn't help him with his expenses now, so it means that we still have to try to find some food money for him each month as like some others on here, his course requires a lot of lab time and coursework which pretty much makes it impossible for him to find a job that would fit in, quite apart from the fact that there are so few jobs around in any case.

yellowballoons Sat 24-Aug-13 19:38:44

Most if not all unis offer some bursaries for specific reasons.
Also look into being a sponsored graduate as that is available with some courses.
But agree, the mjority of students will not have access to this funding if they dont meet the relevant criteria.
But it is worth looking into, and worth looking into especially if a young person is torn between various choices of uni.

happyinherts Sat 24-Aug-13 19:44:44

My son has an elite sports scholarship from his university to start next month. The criteria for that was not easy to achieve - one of them was to be a GB International.

We are deemed to be a disadvantaged family - in receipt of the National Scholarship - yet both these scholarships are to be deducted from student loan, so my son will not see a penny of it until finally paying off his loan.

The sports kit for uni will probably amount to near on £200 and I would have assumed an elite sports scholarship would have provided help with sport associated costs - not so unfortunately

MrsHoarder Sat 24-Aug-13 19:50:52

The problem us that in university Towns the landlords match the rent to the standard loan as middle-class parents will give an allowance. Doesn't matter what the loan is, in moat Towns student rent will match it.

By giving students from families who really can't afford to top up a bit more, they can then afford to eat.

BeckAndCall Sat 24-Aug-13 22:30:05

cumfy not for student lets they're not, I'm afraid. Many of us on here wish they were, I'm sure, but they're just not.

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