Student loan information to make clearer parental help may be needed

Student loan information will make it clearer to parents that they may also need to chip in to financially support their child at university.

It comes after Martin Lewis, the MoneySavingExpert founder, wrote to the government saying there was an implicit parental contribution built into the student finance system. He said this needed to be made explicit.

MoneySavingExpert said the universities minister, Michelle Donelan, has agreed to make changes to student finance information for maintenance loans in England.

Students are able to get maintenance loans for their living costs while at university, but how much they get depends on their family’s household income.

The loan starts being reduced once a family income reaches £25,000.

In a letter written this summer to ministers in England, Mr Lewis said: “As you are aware, many students receive a maintenance loan that is less than the maximum, because it is means-tested against family income – for most a proxy for parental income.

“This implies an expectation that the parents will fill the gap, but this is only tangentially referred to in any official documentation.”

He said the only reference made was “depending on their income, parents may have to contribute towards the living costs of their student children”.

Mr Lewis said this “isn’t likely to be very helpful in practice”.

He urged the government to explain in the official documentation that as maintenance loan reductions are based on family income, families should consider contributing to fill the gap.

Many parents are unaware the system implies they should make up the shortfall, MoneySavingExpert said.

This could leave parents unprepared and unable to find the cash to help, or parents who have the money could refuse to give students any more, not realising the loan size has been reduced.

“Politicians argue day and night about tuition fees, but the biggest practical problem faced by students is that many don’t have enough to live off,” Mr Lewis said.

“A huge part of that is because the system does not give families the benefit of foresight when it comes to living loans. Loans are reduced because of household income, therefore parents are expected to plug the gap – it’s as simple as that.”

He added: “After years of campaigning and meetings with countless universities ministers, I’m delighted to finally have met one who listened and understood that students and their families are missing vital information needed to plan financially for university.”

Michelle Donelan, the universities minister, said: “Every student deserves clear information about student finance so they can make informed decisions about their future – especially as they embark on this exciting next step in their education.”

She added: “We are determined to make the application process simpler and more transparent, and we are working with the Student Loans Company to make these important changes.”

Additional reporting by Press Association