Is DfE diddling low income families out of maintenance loan this coming September?

Just as others have been doing in wider society, I can make a great argument for responding rapidly to the cost of living crisis insofar as it will impact students.

Jim is an Associate Editor at Wonkhe

Part of what I mean by that is that to stand still on the value of student support that we offer students in England, it’s obvious that the government should raise the family income threshold below which we start to reduce from the maximum loan (it’s been £25k since 2007 over which period the percentage of students getting the max loan has halved), and increase the value of the loan by the inflation we predict for this September – not some other historical figure.

But imagine for a minute that we weren’t having to respond to a dramatic inflation spike.

In July 2020, further and higher education minister Michelle Donelan announced the maintenance loan package for academic year 2021-22. The household income threshold wasn’t moving, as usual – but maximum undergraduate loans for living costs (along with a range of other things like Disabled Students Allowance and PG loans) were to be increased by “forecast inflation” – 3.1%.

In November 2020 this equality analysis said the 3.1% was based on the OBR forecast RPI figure for Q1 2022, which was published in March 2020.

In October 2021 the maintenance loan package for academic year 2022-23 was announced. Maximum undergraduate loans for living costs (along again with a range of other things like DSA) were to be increased by “forecast inflation” – this time 2.3%. To get there, it used the OBR forecast RPI-X figure for Q1 of the 2023 calendar year that was published in November 2020.

Now in principle, if you’re using a prediction, you’d want that prediction to be the most up to date one, right? Well guess what. The OBR published its late 2021 forecasts just four days after Donelan announced the maintenance loan uplift of 2.3%. That had Q1/2023 RPI-X at 3.7% – significantly higher than what students will be getting – 2.3%.

Will Donelan rush to correct the faulty projection? Don’t bet on it.

Meanwhile for some reason UKRI uses a totally different measure when calculating minimum stipends – for 2022-23 their increase used CPI rather than RPI – specifically, ONS Consumer Price Index with Housing (CPIH) in the 12 months to September 2021 – 2.9%.

We should be especially concerned about PG loans and disabled students, by the way.

For the former, a whole bunch of universities are whacking up PGT fees by something closer to the inflation we’re experiencing now than the inflation DfE is using to increase the value of the loan by.

And for the latter – many of whom are particularly impacted by energy cost rises – DSA doesn’t count as a means-tested benefit so the £650 one-off Cost of Living Payment won’t apply, and DSA isn’t listed here so not even the £150 Disability Cost of Living Payment will be going to disabled students who just get DSA.


A previous version of this article incorrectly quoted a DfE document on the use of RPI and RPI-X measures, but has now been corrected

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