A miserly increase to student maintenance loans is coming

This morning - just 13 days before the main UCAS deadline - the Westminster government confirmed that it will uprate the maximum maintenance loan (as well as the postgraduate loan and max Disabled Students’ Allowance) by just 2.8 per cent this coming September for students from England.

Jim is an Associate Editor at Wonkhe

In addition, it’s making an additional £15m available to top up student hardship funds – which, per student in England, would just about cover a lunch in a privatised university refectory. Don’t all spend it at once.

This was broadly as predicted. As we’ve covered on the site before, the tradition is to use the Office for Budget Responsibility (OBR) projection for RPIX inflation in Q1 of the year following the start of the academic year – which is 2.8 per cent.

Look on the bright side. If the Department for Education (DfE) had got its act together and managed to make the announcement ahead of the last OBR forecast that accompanied that fiscal event in November, it would have been just 1.8 per cent.

Again as we’ve covered on here before, there are two problems with the way this is done. The first is that over the past few years, the OBR has consistently undershot its inflation prediction – and the government has repeatedly not chosen to correct its errors.

That means that this year, the poorest students are £1,500 worse off than they should be in real terms – with almost no other help coming their way from the other cost of living schemes, most of which are focussed on Universal Credit claimants. Next year they’ll be over £1,500 worse off – and almost £2,000 worse off in London.

A/YMax Loan (Away, Outside Lon)Max Loan (Away, Lon)IncreaseReal (or latest estimate) RPI Q1Should have been (Away, Outside Lon)ShortfallShould have been (Away/Lon)Shortfall Lon

The other is the failure to adjust the parental family income threshold over which you no longer get the notional maximum – which has been at £25,000 since 2008 – so fewer and fewer families get it every year.

The press release is astonishing. The headline is “Cost of living boost for students” – which is one way to describe a confirming a deep cut in help for the poorest during a cost of living crisis – and as well as that £15m rounding error, both mentions the magic money twig and universities’ own hardship funds.

These, lest we forget, are funded by tuition fees – which DfE proudly reminds us are being frozen for the sixth year in a row, while omitting to tell readers that most continuing and future students will pay significantly more for their course over their lifetime, through a series of stealth changes to student loan terms introduced last year.

On the assumption that there is some complex Barnett consequential pain that devolved Nations will be keen to ringfence, expect those announcements to be grim too.

The pressure on universities to now review bursaries is pretty strong – it would be breathtaking if the Office for Students (OfS) doesn’t require universities to address the issue in forthcoming reviews of Access and Participation Plans – and what’s interesting about that is the timing.

Over the past few years as providers have been reducing spend on student financial support, no students’ union in the country has been pushing for early implementation of worse bursaries in a plan developed 18 months out. In reverse, imagine trying to argue that a better bursary package needs to wait until September 2024.

Two major cliff edges are coming. In the spring most energy bills support ends. Where landlords pass the cost of energy on to students, they’ll be hit instantly. Where they have offered genuine all-inclusive bills contracts, they’ll not be making that mistake next September.

If students do drop out, OfS is poised to pin the blame tail on the donkey. If students don’t, they’ll have a diminished experience that we conspire to compromise on beyond all meaning of “full time student”.

We don’t know how bad things are for students outside of the ONS survey from a month or so ago, but the Student Income and Expenditure Survey for England and Wales was completed last summer. Now why might that not have emerged yet?

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