Student financial support in a time of social isolation

Many students depend heavily on part-time work to make up their income, in the sort of sectors which will be most heavily hit right now.

Fortunately, many of them are also already within a form of welfare (though we don’t often think of it as that) through the student finance system. This post suggests some quick decisions which could be made about student finance to help deal with lost income. It looks just at those who are on the main student support package, so excludes those on special packages, which includes nursing and midwifery students in the devolved nations. Their situation is likely to become a separate debate.

A quick search just now doesn’t bring up any announcements on student funding in any part of the UK yet, but that could change quickly. I’d be surprised if people in government and higher education across the UK are not already looking at action in this area.

This post looks particularly at Scotland and Wales, but similar arguments apply for England and Northern Ireland.

Cutting costs

What’s happening on the other side of the equation from income obviously matters. The largest outgoing for those away from home is rent, paid to universities, individual private landlords and, more and more, mass private providers of student accommodation. Rent holidays would be the largest single thing that would take the financial pressure off the student population.

So whatever is being done to make those a reality needs to take in student accommodation, and students as private renters. For specialist mass providers, universities and private, allowing contracts to be ended early would also help, and any help with covering the cost to providers of doing that should be looked at as another form of call on the budget for rent support.

Mortgage holidays will affect fewer students directly, but will be relevant to some mature students, particularly, and ought to feed through into suspended rent payments, in some cases.

Commuting students will see their costs fall – but not if they are locked into annual passes. So they will have an interest in anything being done to write off unused travel pass periods.

Substituting for lost work

Action on rent will take off much of the pressure, but the student body is very variable in its needs and some flexibility on the income side will also make sense. Not all students live away from home, and students who live at home use part-time work to deal with financial pressures too.

In Wales, every student living away from home is already entitled to £9,225 of support through a combination of loan and grant (£8,100 grant at lowest incomes, tapering to minimum universal £1,000 regardless of income). For those living at home, it is £7,840 (and those in London £11,530). Details are here.

Particularly if there is quick action on rents, the Welsh system already provides a form of universal income that might be enough as it stands, as long as people can apply late for support they had not expected to use.

Total living cost support in other parts of the UK declines as family income rises, and is lower, and there is a more obvious case for intervention.

In Scotland at the moment the situation for full-time undergraduates is what’s shown below (young students top, mature students bottom). The sums are the same wherever students live or study.

I am worried particularly about those people on the £4,750 package who already didn’t have easy access to parental support (£34,000 is not a high household income), and who are very likely to be relying substantially on part-time working.

There is no way the Scottish Government outlay on student loans in the current or next financial year is going to be its pro rata share of outlay in England, so getting Treasury permission to turn on the loan tap more should be open to it as a quick way of easing cash flow pressures on students.

Whether additional borrowing provided this way can be commuted to grant, or else written off, would be a decision for later. There would be choices to be made about how much extra loan, and who for, but at minumum lifting the maximum loan for people in the lowest support category looks easily justified.

Changes in parental circumstances

There will also be students whose parents suddenly cannot provide as much help as they did before. An emergency loan extension facility, which again might later be commuted or written off, would be an immediate help for that group also.

Administration

The main practical issue is likely to be having people available to process applications and issue loans, at SAAS and the SLC. That argues for doing things that are as simple as possible in form.

Institutional support

Hardship funds and institutional bursaries are an existing safety valve. But the scale of the call and pressure on administrative staff is likely to limit what can be done with those.

Overview

In Scotland, all these things point to a case for some form of emergency extension of the student loan scheme, which might be as simple as a flat-rate additional borrowing extension to everyone, with the ability to turn round applications quickly the main challenge, particularly for those who are not already borrowers.

Regular readers of my personal blog will know I am an advocate of student grants. But the reality of the scale of the cash call on government budgets right now means that in this one area where there is an established loan scheme, it offers an additional way of addressing immediate financial hardship, whatever later decisions are taken about what to do about such additional debts.

The main argument against relying just on this looks to be how quickly national bodies can process applications, compared to institutions, who will tend to have more facility to move quickly.

Northern Irish students are also on a very restricted level of living cost support, and will face similar pressure on lost work. For English students, living cost support is generally higher than in Scotland or Northern Ireland, but below that for Wales, and England has the same tapering that will catch out students whose family income suddenly drops, or who were already heavily reliant on part-time work to fill the gap left by the state.

In these strange times, student finance may look like a minor issue. But not for those who rely on it. Rent holidays and shortened tenancies will help this group, but the potential for using the student loan system as a source of short-term relief deserves attention too.

This piece originally appeared on Lucy’s blog – Adventures In Evidence