Parents expected to give you £5,523 a year for uni
Our calculator reveals that students who don’t (or can't) follow government’s parental contribution guidelines are left up to £5,523 a year out of pocket.
As most students are well aware, maintenance loans are means-tested. This means that the government calculates how much money a student should receive in loans each year based on how much their parents earn.
Only students whose parents earn below £25,000 a year receive the full maintenance loan (as well as a grant for any students who started uni before 2016). Everyone else will receive less – the more your parents earn, the less money you get – and the government expects parents to make up the shortfall so all students ultimately receive the same amount.
But what happens when the government’s ideal situation doesn’t quite work out: Is it fair to financially penalise those students who choose not to ask their parents for financial support (or better – whose parents can’t or won’t fork out that extra cash that the government won’t cover)?
And is this really an adequate way to distribute loans when every student’s individual situation can be so drastically different?
How exactly are student loans calculated?
We’ve put together a handy new calculator tool that uses the same formula that the government uses when assessing loans, so students can have a clear answer as to exactly how much their parents are expected to contribute.
Maintenance loans are assessed on the following criteria:
- How much money your parents make
- Whether you choose to live in your family home during uni or away from home
- How old you are (if you’re over 25 it’s based on your own and/or any partner’s income)
- Where in the UK you choose to study (different rates for London)
- Whether your parents have any other children at uni at the same time as you (in which case they reduce the household income figure by a nominal £1,130 per additional child).
The maximum loan has been set at £8,430 if you’re studying away from home anywhere outside of London, £11,002 if you move to London for university, and £7,097 if you choose to stay at home.
This is a figure the government have deemed adequate to cover students’ living costs for the year (but according to what you’ve told us, it’s nowhere near enough).
Our National Student Money Survey this year revealed students are experiencing an average of £221 shortfall every month, turning to the likes of gambling, drug trials and even adult work to make ends meet.
Students left out of pocket
Our calculator reveals that if a student is in a position where they aren’t receiving the support that the government assumes they’ll be getting from their parents, they could be missing out on as much as £5,523 (if they’re studying within London – it's £4,502 outside of London).
This is particularly problematic as the government say themselves that parents are not legally obliged to supplement the loan, but they are expected to pay what works out as around 6% of their earnings towards their children’s living costs at uni.
In this sense you might call it an optional ‘send your child to uni tax’, as parents are expected to contribute a certain amount of their income depending on how much they earn.
How much 'should' your parents be giving you?
Click below to find out!
Our problem(s) with the current system
We frequently ask students how they feel about the way maintenance loans are assessed and dished out, and the general consensus is always the same: they feel the model is outdated, and doesn’t sympathise with contemporary living situations (a particular example being that if parents divorce and remarry, a new partner’s income is also included in the household income assessment despite the student not benefitting from that income in any way).
Many have also pointed out that it's extremely presumptuous for the government to assume that even at the age of 24, a student can be (or would even want to be) financially dependant on their parents in any way.
The minimum parental earning threshold of £25,000 has also been stagnant for a long time. The result of this is that over time, less and less students will be receiving the maximum loan from the government as salaries generally get higher in line with inflation.
This is particularly interesting when you consider the fact that the government also just controversially froze the student loan repayment threshold at £21,000 until 2020, when previously agreeing that it would rise along with inflation (meaning students will start paying loans back earlier and more quickly).
And if that’s not enough, they’ve also just announced plans for two separate waves of tuition fee rises at the rate of inflation – taking fees up to £9,500 by 2018. So it would seem that the rate of inflation only applies when the government wants it to!
Still struggling to piece together the riddle that is student finance? Check out our complete guide for everything you need to know.