The Money Saving Expert sounds the win bell – but at what cost?

It’s always nice to see a former students’ union officer secure a win.

Jim is an Associate Editor at Wonkhe

Martin “Money Saving Expert” Lewis – the most trusted man in Britain and former general secretary of LSE Students’ Union – has been campaigning for a while now on what he regards as the “hidden” parental contribution in the English student finance system.

It goes like this really. The government sets a maintenance level for students based on students studying away from home and outside London. It then calculates two variants of the core calculation – one that’s a bit more for those away from home in London, and another that’s a bit less for those who are studying at home.

The problem is that in England that figure is the “maximum” that a student can get in their maintenance loan, with a taper reducing that amount based on your parent(s)’ income (in Wales everyone can get the “full” amount but the mix of grant and loan differs based on parental income). The assumption is that (that) parent(s)’ (or part-time jobs) will top up the difference.

That all used to be much more explicit than it is now – leading Lewis to argue that parents could end up unprepared and be unable to find the cash to help, or sees parents who have the money refusing to give students any more – not realising the loan size has been reduced.

Back in 2017 this all got pretty heated – at a Conservative Party Conference Fringe, Lewis lambasted then universities minister Jo Johnson who suggested that “living frugally” might cover it instead:

What is also so important to bear in mind is that students have many different choices about the kind of lifestyle they want at university. Some students want to live very modestly and have a frugal existence, focusing on their studies. Other students may want a different lifestyle but there isn’t one cost of going to university – it’s a very specific choice that each individual will make.”

Johnson even refused to make any changes in writing, but Lewis is both popular and like a dog with a bone.

The news here is that Michelle Donelan has written to Lewis and committed officials to working with the Student Loans Company (SLC) to ensure that future comms with students will explain the difference between the maximum possible award and what an individual is actually entitled to:

We will ask the SLC to make clear that this additional funding might be from several sources, which may include from a student’s parents or household members where applicable”

Martin Lewis is pleased – but I’d tentatively suggest here that he may be overcooking the beans on the impact. Lewis says that the “biggest practical problem” faced by students is that many don’t have enough to live off and that a “huge part” of that is because the system does not give families the benefit of foresight when it comes to living loans:

At my TV roadshows, I’ve met students living off cold baked beans, because parents believe the loan is enough for them to live on and they should be independent – not realising that their incomes meant the amount received was half what’s deemed to be the true living cost.”

The problem here is that he’s taking on trust the idea that the full loan has been “deemed to be the true living cost” in some kind of sophisticated way. As we’ve covered on the site before, the gap between fantasy and reality there is growing every year. And swapping some loan for grant won’t make a scrap of difference to that problem – in fact it might make it worse.

In other words, if the full loan covered the costs of being a student, not being honest about a parental contribution within it is a problem. But once you give up ensuring that the full loan covers the costs of being a student, it’s not being honest about how much parents or part-time work will have to contribute on top that is the real scandal.

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