How much financial help should we give to students?

Even with income-contingent loans to help out with maintenance, is university affordable from a day-to-day costs perspective?

Jim is an Associate Editor at Wonkhe

As my colleague David Kernohan points out, there’s some painful stuff on maintenance buried in the data tables from Public First polling underpinning the All-Party Parliamentary University Group’s “Is university worth it?” report.

When asked about day-to-day living costs at university, such as accommodation costs, food and so on, one in five that would be “first in the family” figure they’d end up spending less than £100 a week – a figure that halves for those whose parents went.

Then when asked if the grants and loans they might receive will be enough to pay for these costs, guess what. Poorer kids, those from state schools, those on free school meals and those whose parents went are the most likely to assume the answer is yes. How ironic.

Overall, day to day costs put 30 percent of people off from university that describe themselves as in a family that struggles to make ends meet.

We’ve noted some problems with the debate over maintenance in the ashes of Augar before on the site, but at least the panel proposed an anchor.

Ignore for a minute that Augar somehow failed to link proposed maintenance to any actual calculations on student costs. The idea in there was that the maximum English maintenance loan for someone living away from home and studying outside London should be the age 21 to 24 National Minimum Wage, calculated at 37.5 hours per week, for 30 weeks per year.

A taper was to reduce the amount based on parental contribution, students were assumed to be able to top up with part time work and work outside of term time, some loan for the poorest was to be swapped with grant, and adjustments would be made for London and living at home. But the core calc was NMW.

The problem – like with a lot of what was in Augar – is that May 2019 was a long time ago now. When Augar was published that calculation above would have seen the max loan of £8,944 drop slightly to £8,663 based on an NMW of £7.70 for 21 to 24s.

The following year, based on an £8.20 rate, that figure would have risen to £9,225 – and while the calculation that is used to determine the NMW isn’t the same as the forecast inflation rate that DfE uses to update maintenance loans, it’s not far off. So that year Chris Skidmore announced that the max loan would be £9,203 – only a £22 difference.

This continues in 2021. 23 and 24 year olds were given the headline NMW rate, so we’ll have to assume that the government thinks all students are younger. That 21-22 rate right now is £8.36, which would work out at £9,405. Michelle Donelan actually announced an increase in the max loan to £9,488 – this time an £83 shortfall.

The problem hits next year. This time the government has announced an NMW rate for 21-22s of £9.18, which would work up to an Augar anchor loan of £10,328. But the DfE/Donelan calc uses forecast inflation again (2.3%) – so next year’s max loan will only be £9,706 – this time some £622 short!

I’d like to see a definition of affordability rooted in the costs that students face, to be honest. But if we must anchor maintenance to the National Minimum Wage, the least we can do is track its increases rather than a much dodgier inflation calculation that may not reflect the costs students face anyway.

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