To think the Uni Maintenance Loan shouldn't be means tested?

[Ellisandra]

Interested to hear reasons why it should be, and maybe adjust my view!

My soon-to-be stepdaughter is going to uni in September.

Because her father is moving in with me this summer, her maintenance loan will means tested and my income rather than his (her mother died) means she'll lose £4200 of it.
I will make up the nearly £400 a month, that is not an issue - we are a family.

I would support that for a grant, but this is a loan.

I get that there are admin costs, defaulted loans, people who never earn over the repayment threshold... And interest is low and much delayed repayment so it's not a money spinner for the government. But it's still a loan, not a grant.

Surely there are plenty of people who can't afford to top it up for their child? Household income over £60K and you lose £4200 - £60K doesn't go that far in London mortgages with commuting costs thrown in - £400 is a lot to find. In our case, we couldn't have planned for it - 2 years ago I didn't know I'd be getting a SD! (Lucky me though she's fab )

Then there'll be people who could afford it but refuse.

I was lucky to go to uni before tuition fees, and I didn't have a penny from my parents, I worked my way through. So I don't think kids are snowflakes who can't do that

But I just don't get why some students will be denied access to this because of their parents?

Even if there was a tiered rate so you could get the rest at a higher interest rate, maybe? Just seems really unfair that a student is denied it when a parent (or step parent) can't be forced to give it to them, and anyway may not be able.

I'd also add that whereas we are more than happy to give our daughter the advantage and freedom of choice on when to work, I am in no doubt it is an advantage and it would be wrong of me to think otherwise. Some kids really do have it tough as do some families who try to support and can't or it stretches them.

Its always going to be an unfair system, the basic maintenance loan is simply too low, it doesn't cover most students rent, however I'm not sure I fully agree with not means testing it, I think the minimum should be higher and the income where you start loosing it also higher.

I have many friends who's parents give them well over £100 a week plus rent plus they have the basic loan. Obviously I suspect their parents are on a bit more than 60k but then the poorer students are at a disadvantage because they might have to work through their degree (currently mine is 8-5 most days plus additional work) whilst a richer student can have a parent top up so they don't have to, currently irs the middle students whose parents are on around 50k who are probably the most disadvantaged by the system. I dont think theres ever going to be a way that it could be fair.

I just want to add that my parents dont give me any money, I get the max loan but no grant and work during the summer holidays. Most students have 3 months off over summer and I think 3 months is long enough to be able to top up the basic loan to reach a decent amount of money for a student.

It's not always easy to for students to get a job in the holidays. There is a lot of competition in our city

It's ridiculous, unfair system. On the flip side to the those saying NRPs get off lightly , what I've seen is long term step families with a huge amount of money coming in and the student only putting the NRPs wage down, to get the maximum maintenance loan.
Personally I think we should reserve uni for the really able and pay for our 'elite' to be educated and improve apprenticeships and opportunities post A Level.

Things must have changed since I got a uni loan then as my stepfather wasn't prepared to pay and (luckily for me) his high income wasn't taken into account as he'd never adopted me.

Surely this is still the case as stepparents don't have any legal or financial responsibilities for the children of their partners?

The problem with means testing is that parents aren't always willing to support students. I currently receive the minimum London loan and work full time alongside my degree, which is doable but really tough right now during coursework and exam season.

My parents refused to sign any forms for the Student Loan Company, and I'm still young enough and not on horrific terms with them that I couldn't prove myself to be independent.

Bluntness When I was doing my degree in 86, there were still people who worked to supplement their means tested grants, so that has always been an issue. Even though I was married, my grant still had to be assessed on my parental income, and not my husband's. Both RN Officers, but Dad a rank and several increments higher than dh.

There will never be a level playing field unless all students are funded equally and forbidden from working.

stumbly not it isn't wrong - step parent income (either married or living together) is considered part of household income. That's what prompted me to start the thread!

And... OMG!
I just looked up the interest rates

I apologise for saying they were low! They really aren't. I've not long acquired a teenager SD so rates have not been on my radar!

Another reason it's unfair then not to allow everyone the maximum loan. I was at least trying to think of a good reason, like if the rates were so low that it was actually costing the government to provide them.

This all started cos SD was looking at finance, and there's a personal reason why her dad's income will increase a little next year - so she was asking him if it would reduce her loan. He dropped the news that my income will be included.
Poor kid ended up in tears that it's unfair that he'll have to give her money, when he didn't have to for her older sister. She's so nice - it's really not for her to worry about!

I just hope that she thinks his pay increase is going to cover the money going to her. If she cried at her dad finding it, she's going to feel really shit if she works out it's coming from me, a woman she barely knows and has never lived with. Of course I don't see it that way - when I marry her dad, we become one financial unit. But she'll feel awful if she works it out

I do find it hard to understand why parents who can afford to support their DC through uni refuse to give them financial help. I couldn't do that to my DC. I've saved to help them. Initially it was to cover their fees, etc, but in the time since I took out the savings plans, I'm getting just enough to cover the top up payments once their get their maintenance and tuition fee loans.

Ellisandra ultimately DSD will take her cues from how you and her dad deal with the both the practical and emotional issues surrounding this, and I'm sure you'll both approach it with sensitivity.
It might be worth making the point to her, when it all clicks, that you knew about it well in advance and wholeheartedly decided to go through with the wedding even so.

And I agree with your OP. Maintenance loans should be available for all.

The really scary thing about financing young adults (I'm 3 years off and it's our top saving priority at the moment) is how long they'll need help for these days. Most professional jobs an undergraduate degree is no longer good enough, and post-grad qualifications or even post-doc research is needed, as the working world grows increasingly specialised. I'm assuming I need to provide a bedroom (for holidays) and at least some living expenses (term time) until they're each at least 25...

The system has always been crap for some families / situations but the new development re the loans being means tested seem especially ridiculous.

The bit that I can't get my head around is the fact that my girls dad (divorced) only has to cover them until they are 18, even with university on the cards. Whereas I, as resident parent, have to cover them through their University years. These two positions from the same government do not add up!

We're not really in a position to give our son large amounts of money, we pay for his phone and buy him some bits from the supermarket.

I think it's totally wrong to take parent incomes into account. Only my husband works. In the period that the coming year's loan is worked on he was unable, due to work commitments, to take his full holiday entitlement so his company offered to pay it to him, it was just a one off and we put it towards a family holiday. However, that one off payment has reduced the amount of maintenance loan our son will get next year.

It's a shit system. I'm saving for my ds's possible future but uni and dh and I live will within our means but some parents have outgoings that match their income and either can't or won't make up the difference their child needs to get by without stress and hardship. It's not fair.

It's particularly not fair on children (who are now adults) of unsupportive parents. The young person has got to 18 and got into uni, they ought to be able to complete their studies without begging their parents for money.

Somerville We will fund ds until he has done his MA, so that should be til June 2018. He has started applying for internships post MA, and if he doesn't get on the MA course, then he'll either have to come home and stack shelves somewhere in Belgium, or find a job in UK. I am assuming we'll be helping til Nov 19. Dh retires then, and I am not having him do another 3-5 years just to support ds.

The interest rate is more than the average mortgage rate. It would make potential sense (for those who can) to borrow more on a mortgage and get your child to pay you back at a more favourable rate than the student loan. I've got a few years yet to save before DC1 gets to the same point but it's certainly a point to consider when the time comes.

I've just done DD1s student finance application and agree it's crackers.

Her dad and I are divorced, I moved in with DP in December 2015. He is a relatively high earner, I am not as I only work part timer as DD2 is disabled.

DP pays the mortgage and all the bills, and whilst my wage and child maintenance pays for food etc essentially he is supporting me and my 3 girls, despite not being their father.

HOWEVER DD1s student finance is calculated on "our household income" 2015-2016, despite the fact we weren't even living together for most of that year and my income consisted of my small wage, tax credits and some child maintenance which in total fell a LONG way short of the threshold for a reduced maintenance grant (which I think is £45K).

Makes no sense to me. I've just taken on a second job to supplement DD1s uni costs from September, her accommodation alone will be £6k and despite her planning to get a job her dad and I will be paying for quite a lot!

A large loan will surely incentivise some people to try not to earn above the paying back threshold?

I think that the 30-year write-off should be, well, written off and also loans should be able to be recovered from people's estates, too. Otherwise it's very unfair on anyone slogging away in an average-paying job but paying money back whilst there are some people who actively choose to be a part-time potter post graduation and dodge repayments.

Denverblue - probably only worth mortgaging if the student is likely to earn enough to pay the loan back in full within the 30 year period (before it gets written off). With many people who end up being stay at home parents they may never pay it off in full. In fact the interest is so high it is possible that some people will never pay off any capital just interest depending on their earnings.

If people's incomes/capital is limited it may just be better to give the student £30k lump sum at some point towards a house deposit rather than paying tuition for example.

This is the bit on interest rates on Gov.UK

Interest rates
Interest is charged on your loan from the day we make your first payment until it’s repaid in full

While you’re studying, and until the April after you leave university or college, you’ll be charged an interest rate of the Retail Prices Index (RPI) plus 3%. Basically, this means you’ll be charged interest at a rate of inflation plus an additional 3%

From the April after you leave your course, if you are earning under £21,000 it’s RPI only, going up to RPI+3% for income of £41,000 and over

DD is at uni and has really put a strain on our finances. DP and I got together when DD was 10 and he has been a great step dad to her even though we have never married. However DD's biological father was a nasty piece of work and has never paid any maintenance when she was younger, he is now possibly deceased.

DP pays maintenance for his own children and pays most of the household bills as I earn considerably less than him. DP's own DD is going to uni in 2018 and he will support her financially as much as possible. We also have my DS 15 at home and he has expressed a wish to go to uni in 2020 so we have at least another 6 years of budgeting very carefully.

DP now earns a good salary so it means DD's maintenance loan is reduced to £3300ish per year. She is at a uni that prefers students not to work because of the intense work load and very short terms. Her holidays are spent completing internships and insight days or completing a reading list / revising. She did secure a temporary job for 6 weeks last summer but will be unable to this year as her internships don't end until August. Her rent is over £5000 per year (this includes 36 meals per term) so her maintenance grant doesn't come close to covering it. We pay her rent and she lives of her maintenance loan for food, books, clothes, travel to London for placements etc.

Dh earns a decent amount but we can still only afford to help ds1 not pay for him completely

We are hoping that with a part time job and help he will just leave with the tuition fee loan and thats high enough!!

The £21000.00 threshold is a figure to watch. I have a strong suspicion that despite initial reassurances, this figure will not be up-rated in line with inflation. Whilst is sounds OK at the moment that you only have to start repaying if you earn that amount, if inflation chips away at the value then, loan repayments will soon become very onerous on people in low paying jobs.