Much has been written about the financial challenges many students face in going to university, and the fact that maintenance loans fall quite some way short of covering the cost of living for students.
Much has also been written about the national trend of mature students numbers coming to university being in decline, with particular implications for certain sectors such as healthcare, where we are struggling to meet workforce need.
These two areas of concern are quite likely related and linked to what we believe is a fundamentally unfair and regressive policy which impacts people who are in receipt of Universal Credit.
Under the current Universal Credit (UC) system, for people who are in work, UC is reduced by 55p for every £1 earned as income.
However, if you are entitled to receive Universal Credit and decide to go to university, for every £1 you receive in maintenance loan funding, your UC entitlement is reduced by £1 – and not by 55p as is the case for earned income.
Make it make sense
On the face of it, this seems highly inequitable – why should income derived from a student loan (which will, of course, need to be repaid with interest) be treated more harshly than earned income?
Another reaction to this approach might be to ask, “Why wouldn’t students who are eligible to receive UC simply not draw down their maintenance loan at all?”.
Unfortunately, this option is not open to those students, because the rules around reductions to UC make clear that the pound-for-pound deductions from UC are based upon the maximum maintenance loan for which you are eligible, regardless of whether you actually take the loan.
It is worth highlighting that, in general, full time university students are not eligible to claim Universal Credit. However, exceptions do apply, such as if you are under 21 and do not have parental support, or if you are responsible for the care of a child (the full list of eligibility criteria can be found here). In other words, students who we know are more likely to need additional support to be successful in higher education.
The Child Poverty Action Group have dedicated information for students who are entitled to claim UC, to explain the impact of having access to a maintenance loan on their UC payments.
In their worked example, a single mother of a 3yr old child, living in private rented accommodation, could have UC payments of £1399.60 reduced to £475.71 per month as a result of going into full time higher education and having access to a maintenance loan.
In other words, this mother would be taking on a personal loan debt of well over £900 per month – on top of the cost of tuition fees – which would otherwise have been paid as UC if she had not decided to access education.
We believe that this scenario may be without precedent in terms of our UC and wider benefit system, in that we know of no other situation in which someone who is entitled to claim benefits would be told that they need to take out a personal loan to replace their benefits entitlement.
In a recent ministerial question on this issue, the government explicitly confirmed that:
…successive Governments have held the principle that the benefit system does not normally support full-time students. Rather, they are supported by the educational maintenance system.
This principle may have been fine when maintenance support was distributed as a grant rather than a loan, but we would argue that there is something deeply regressive about asking students from backgrounds who are already less likely to access education to forego benefit support to which they would be otherwise fully entitled.
Breaking down barriers
The current government has set out an ambitious set of missions to “Build a Better Britain”, which includes a mission to “Break down the barriers to opportunity at every stage”.
We would argue strongly that the impact of having access to a maintenance loan on UC payments is an unfair and unnecessary barrier to students who wish to access higher education, and may well be a significant factor in why some mature learners are seeing university study as a less attractive option.
Finding and fixing barriers of this kind – which could be easily addressed by allowing students who are eligible to access UC to continue doing so – would be entirely consistent with this government’s mission.
