Martin Lewis ‘delighted’ as student loan application process to become ‘simpler’
Martin Lewis on student loans and parental contributions
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University students don’t receive the full amount of the maintenance loan if the total family income is £25,000 or more, something which affects millions of families. The founder of MoneySavingExpert.com has been campaigning for years for the Government to be more upfront because he says many parents don’t know that they are expected to ‘plug the gap’.
Students are at risk of struggling to get by because their parents are unaware that their living loan is reduced due to the family income being £25,000 or more.
Financial guru Martin Lewis said the Government needs to better communicate how the system works so that families can help their children out financially.
Lots of families will only be able to help out financially if they start saving in advance.
Martin said: “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.”
A huge part of this is because the system does not give families the benefit of foresight when it comes to living loans, he added.
“Loans are reduced because of household income, therefore parents are expected to plug the gap – it’s as simple as that.”
Martin has been campaigning on the matter for years and sent an official letter to the Government calling for the changes in June.
He continued: “After years of campaigning and meetings with countless university 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.”
Not being really clear about this information leaves many parents unprepared and unable to find the cash to help – as many will need to be saving for years.
He added: “At my TV roadshows, I’ve met students living off cold baked beans, because parents believe the loan is enough for them to live on and they should be independent – not realising that their incomes meant the amount received was half what’s deemed to be the true living cost.”
After highlighting the pressing need for change, the Minister of State for Universities, Michelle Donelan agreed to make this clearer.
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Ms Donelan 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.
“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.”
The maintenance loan is reduced when family income hits just £25,000 a year, which is less than the average income in the UK.
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