Education and Skills

It’s time to reform student finance

As a current university student, I have seen far too well the major flaws our higher education system has. This is especially true for English students, as I appreciate devolved nations do deviate slightly in their approaches to higher education. However, for me the maintenance loan part of student finance. and crucially how it's calculated, is a major failure that ultimately diminishes the effectiveness of its intended purpose writes Joel Cater.

As a current university student, I have seen far too well the major flaws our higher education system  has. This is especially true for English students, as I appreciate devolved nations do deviate slightly in their approaches to higher education. However, for me the maintenance loan part of student finance. and crucially how it’s calculated, is a major failure that ultimately diminishes the effectiveness of its intended purpose writes Joel Cater.

It would be improper of me to wholeheartedly criticise maintenance loans in its entirety as a personal recipient of it. The concept is a welcome relief and has aided many students, especially those from more disadvantaged backgrounds; breaking down financial barriers that university did previously bolster. However for many, student finance doesn’t solve the financial barrier of university, especially those from a more middle class background. I know that for some, this will be a bizarre idea to get their head around given that the individual is, on paper at least, from a more financially privileged background. The issue occurs because student finance places an upper limit of what a person can borrow depending on their household income.

The current upper limit is a combined household income of £69,977. This means that students are only able to borrow a maximum of £4,289, presuming they are living away from home and outside of London. In order to demonstrate my argument, a student with a household income of less that £25,000 away from home and outside of London will be able to borrow up to £9,203 and possibly also be eligible for additional grants. Now the problem I have with this way of operating is that it implies parents or guardians with a higher household income are able to “make up” the difference between the two amounts to allow their child to have enough money to live off.

Often households with higher incomes tend to live in more affluent areas and, as a result, live in more expensive houses with higher rent or mortgage payments. Another factor might include the cost of living in particular areas. These two examples are also not only often the biggest outgoings for most people but also the two that can’t be changed in the short run. 

Overall this means, as a result of a more expensive lifestyle or the cost of living and financial commitments such as above, parents are unable to save enough even with their child being at university in order to give the additional money to their child. This is especially true with those families who might rely on the child to bring in an additional source of money. The alternative to this is the child finding additional employment, which quite often hinders studying. This is a failure on behalf of student finance, as a system of providing loans to students in order to allow them to house and feed themselves is dependent on parents finding money from a potentially stretched budget to provide additional finance. 

As a result, I feel that these tariffs should be lifted so that everyone who applies for student finance is able to borrow any amount up to the maximum student finances are lending. This way parents can realistically work out how much they can afford to send their child each year and borrow accordingly. This is especially important as it also doesn’t prevent students whose parents may have a higher salary, but a poor relationship with their child from attending as they won’t be reliant on their support if they don’t wish for it or cannot obtain it.

Placing caps on student loans inhibits the purpose of them. I believe it is important for reform of the system to take place, largely by taking into account more factors than just overall income into consideration. This could include factors such as mortgage payments or the area in which a student lives in correlation to household income to paint a better picture of what additional money could likely be afforded by parents to financially aid their children.

Joel Cater is the Social Secretary for Cardiff University Conservative Association.

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