Should your income affect how much your student child is loaned?

When your son or daughter goes to university, it should be a time of pride and celebration, coupled with a twinge of sadness as they head off into the adult world. But the period can also be a frustrating one – as many parents learn when they start filling out details on student finance forms.

How much you earn is still taken into account when the student loans company calculates your child’s maintenance loans and grants. Filling out the form as a parent, you must declare your income, any savings, and any income of other adults who live in the house with you, which all may affect the amount of money your child is given.

Samuel Diserens, who studied physics at Durham University and is now a business analyst at Acturis, says the system is unfair: “My mum had recently moved in with a new partner, now her husband. Even though he wasn’t paying a penny towards my education, his income was taken into consideration and affected how much loan I received.”

A brief look at the information parents are required to supply reveals an extensive list of forms. Parents need to provide payslips, pension statements, tax returns, and information about dependent children.

If the total income of the household weighs in at more than £42,600 – hardly a fortune in central London – then the student does not qualify for a maintenance grant.

The Department for Business, Innovation and Skills (BIS) works with the student loans company. A spokesperson for the department says: “Maintenance grants and loans for living costs are means-tested to ensure that financial support is targeted at those students who face the greatest financial barriers. Ensuring students from low-income households have access to the most support plays an important role in widening participation in higher education.”

The spokesperson reiterated how all students attending full-time higher education courses qualify for means-tested maintenance grants and loans for living costs, 35% of which depend on a student’s household income. The spokesperson added that this year saw a record number of full-time entrants to higher education, including a record number of entrants from the most disadvantaged backgrounds.

Dr Ruth Thompson is the co-chair of the Higher Education Commission’s inquiry into the financial sustainability of higher education in England. She thinks that most people would agree that in an ideal world, students over the age of 18 should be classed as financially independent.

“Increasing the amount of maintenance money from the government available to all students would have a major impact on public expenditure, and would inevitably create more deadweight costs in the system by substituting state funding for funding that many families are able and willing to provide,” she says.

Dr Thompson acknowledges that the HEC has continued to emphasise that higher education needs to be accessible for all: “The present levels of maintenance support do not seem to be deterring applicants from lower socio-economic groups or disadvantaged backgrounds.”

But maintenance loans are barely adequate for most students. The average cost of renting across the UK is £10,404 per year, and the most a student can borrow annually as a maintenance loan is £5,555. It’s easy to see why people are frustrated with the system.

Oliver Mawhinney, a student at Durham University, says his loan falls well short of the cost of living: “At Durham we have a situation whereby college accommodation costs will increase by 8% for the 2015-2016 academic year and students will be paying at least £6,600 for short let accommodation. The student loan system and rate of increase does not come close to covering this. The maintenance loan system has clearly failed and I know many students are worried about how they can afford to find such vast sums of money.

“I am personally over £2,000 short of my accommodation fees – and the government expect my parents to support me while suppressing their public sector wages.”

The system is bureaucratic, says Professor Stephen Gorard from the school of education at Durham University. “[Means-testing loans] adds an extra level of complexity to an already bureaucratic system. Such approaches sound, and probably are, fair. But they usually cost more to administer than they save in reality. And the parents of those affected might include some of the most sophisticated at hiding knowledge of their incomes, while their offspring might include some of those most likely to repay any loan in the medium-term. There are surely better ways of ensuring fairness in access to higher education.”

These calls for parents’ incomes to be discounted when deciding how much loan or grant a student gets begs the question: what system would replace it? One suggestion is that loans or maintenance grants should be awarded on a system of merit; another that a student’s own personal income and savings should be taken into account.

At 21, a student doesn’t yet qualify for mature student status – with greater access to grants and loans – yet are considered adults by society and may have supported themselves fully in every other way. “My child left home at 18 to go and live with his boyfriend,” says Hettie Cox. “He had a full time job, as did his partner, but at 21 decided to back to university. Although of course we wanted the best for him, we felt that as he had been financially independent for three years his income should be taken into account, not ours. Looking at our income meant that he didn’t get the grants and support somebody on his low income deserved. This system is rotten and needs to change.”

• Some names have been changed to protect the identities of those involved.

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