Select Committee on Education and Skills Minutes of Evidence

Supplementary memorandum from the National Union of Students (SS14)


1.1  Education and Training Targets

  The Learning and Skills Council (LSC) have set the following targets to work towards the government's National Education and Training Targets in England:


    —  80 per cent of 16-18 year olds in education and training by 2004 (currently 75.8 per cent)

    —  85 per cent of 19 year olds with a level 2 qualification by 2004 (currently 75 per cent)

    —  55 per cent of 19 year olds with a level 3 qualification by 2004 (currently 51 per cent)


    —  Help 750,000 adults with literacy and numeracy skills (up to 7 million have difficulties)

    —  Percentage of adults with a level 2 qualification by 2004

    —  52 per cent of adults with a level 3 qualification by 2004 (currently 47 per cent)

Higher Education

  Further to this, the government has set a target of 50 per cent of 18-30 year olds having participated in higher education by 2010.

1.2  About NUS

  NUS supports the government's aims to increase participation within post-compulsory education and training. NUS works to contribute towards achieving these targets through:

    —  Partnerships for Progression—NUS has undertaken a great deal of work to widen participation and raise aspirations among young people. NUS leads on the Partnerships for Progression scheme, which receives funding from the DfES. The project trains students to mentor 13-16 year olds among groups currently under-represented in HE including: people with disabilities, and those from lower socio-economic groups.

    —  Welfare information and advice—NUS provides information and advice to parents, potential and existing students and the wider public on entitlement to student financial support and social security benefits, and on money management. NUS also undertakes advocacy and casework for existing students to resolve problems with agencies in terms of curriculum provision, quality and student funding. NUS also supports welfare advice services within institutions and local communities through providing detailed guidance through the Welfare Information Pack to welfare advisors and other relevant agencies, such as social workers.

    —  Outreach—NUS visits schools and colleges, careers services and student advisers to give presentations and training on entitlements to student support in Further Education (FE) and HE.

1.3  Funding the future of further education

  However, NUS believes that there is a cost associated with increasing participation. Funding must be prioritised for both student financial support and pastoral support in FE and HE if the government targets are to be achieved. This means that new funding needs to be offered across the FE and HE sectors to halt the decline in funding per student, and widening participation funding that has occurred over the past decade (see tables one and two).

Table 1


Total funding per FTE
student (£)
Real terms index
Participation funding/FTE
student cash (£)
Real terms index

  Source: DfES Departmental Report 2001:36

Table 2


Total funding per FTE
student (£)
Real terms index

  Source: DfES Departmental Report 2001: 38

  Additionally, the total budget for HE student support has been shifted since 1998. It is estimated that the government has saved approximately £715 million from abolishing maintenance grants and generated a further £400 million by introducing tuition fees[29]. Table three illustrates areas where funding has been generated by students and graduates through tuition fee contributions and student loan repayments, including accumulated interest. NUS believes that the savings should be put back into FE and HE student finance to address the current funding problems and help to achieve the governments participation targets.

Source: DfES Departmental Report 2001: 32

Table 3


Academic Year
Source of Income (£mil.)
Tuition Fees
Student Loans repayment
Student Loans Interest
Total (£mil)


*  Estimated income from Tuition fees per year. Figures not available.

**  Estimated income, based on a 10 per cent increase from 2000-01


          DfES, 2000, Statistics of Education: Student Support England and Wales 1998-99.

  DfES, 2001, Statistical First Release, Student Support: Statistics of Student Loans for Higher Education in UK—Financial Year 2000-01 and Academic Year 2000-01

  HEFCE, 2002, Circular 02/02

  NUS is calling for:

    —  Education Maintenance Allowances to be available to all students in further education up to level three, regardless of age or mode of study. This would be subject to a means test on a basis similar to the current scheme[30], with "add-ons" in recognition of childcare, travel, disabilities and course costs.

    —  a higher education maintenance bursary of half the cost of maintenance support (£4,200 per year for students in London, £3,500 for students elsewhere) for low-income students[31].

    —  the system of loans to be maintained, with the subsidised interest rate, though take-up would be optional (ie students would not have to apply for a loan to access other funds (such as Income Support and discretionary funds).

    —  loans to be repaid through a tax system (in line with NUS proposals for graduate contributions) at a residual income threshold of £20,000.

    —  loans to be made available to postgraduate students and part-time students on a pro-rata basis.


2.1  Policy points — basic principles

    —  A multi-pronged approach to funding is needed if the system is to cater for the different needs of part-time and full-time learners. This may incorporate Individual Learning Accounts (ILAs), skill development loans for short-term study and statutory grant-based maintenance for full-time study and living costs up to level three.

    —  Funding must be based on level of qualification, not age—ie the 16-18 and 19+ divide in funding must be eradicated.

    —  Any allowances must be statutory, not discretionary, to enable potential learners to plan.

    —  NUS recommends that the Department for Education and Skills (DfES) looks at the Australian Aus Study model of support for adult learners—ie a basic allowance for study costs, with supplements for living costs, travel, childcare, and course costs.

2.2  Students aged 16-18

    —  The only statutory support available for some 16-19 year olds studying up to level three in England is through EMAs (see Annex 1). These are, however, only available in 56 pilot areas (see Annex 2).

    —  A DfES evaluation indicates that EMAs in piloted areas have made a notable difference to both participation and retention[32]. Participation has increased for EMA participants by an average of 5 per cent. The effect is increased for males (11 per cent) and for students in rural areas. The same research also showed that post-16 non-participants in education said they would be encouraged to participate by a payment.

    —  The second year evaluation has also highlighted the growing gap in retention between EMA recipients and non-recipients, and the growing resentment between those living within pilot areas and those excluded from a statutory payment[33].

    —  DfES research on Learner Support Funds found that many colleges have attempted to address this inequality by offering a smaller payment from the Access Funds[34]. However the research found that Learner Support Funds can not compete with EMA payments when they are used for this purpose. It is also a considerable drain on already over-stretched Learner Support Funds.

    —  There are no firm plans for EMAs to be rolled out nationally. Current estimates run at £450-500 million for a national scheme across England[35]. (The Association of Colleges estimates £350 million for a £40 weekly rate).

    —  EMAs are only available for up to two years of study. For students wishing to progress from a level two to three qualification post-16 funding is not available to see them through their studies.

    —  The age limit on eligibility for EMAs places certain students at a distinct disadvantage in accessing statutory funding.

2.3  Students aged 19+

    —  All maintenance support for students studying up to level three is discretionary[36] through Learner Support Funds (see Annex 1)[37]. DfES research found that only 5.3 per cent of students aged 19 or over received such funds and these funds are a lottery for students—they can not rely on them and therefore are not an aid for increasing participation[38].

    —  New statutory student funding in FE has been focused on 16-19 year olds (see table 4). Although funding available to adult learners has doubled from 1998 to 2001 (see table 4), none of the support offers an entitlement to funding for the duration of a course that a potential student may rely on.

    —  As a result, many adults study part-time whilst being funded through social security benefits (Jobseekers' Allowance (JSA) or Income Support (IS)). For JSA, this is not counted as a "jobseeking" activity and is difficult to sustain, particularly if a student wishes to progress from a level two to a level three qualification. DfES research found that for such vulnerable students, Learner Support Funds can be an important source of funding to aid retention. Full-time study funded through the New Deal Education and Training Option has become increasingly popular for adult learners. However, this only facilitates short term training opportunities.

    —  ILAs[39], which were aimed at encouraging adult part-time participation in education and training, have been suspended due to issues with the quality of course provision, despite calls from representative organisations to set delivery standards from the development stage.

Table 4


Expenditure on FE student support (£)
Learner Support Funds
Schools Access Funds
EMA Pilots

  *  Source: LSC, FE Leaner Support Funds 2001-02:1.

  **  Sources: 1999-2000 — Schools Access Funds = £6 million, J, Gravatt, 1999, Following the Money: FE funding in 1999-2000, Further Education Development Agency (now LSDA): 12.2000-01 and 2001-02—DfES, Schools Access Funds—Arrangements for 2001-02://3. .

  ***  Sources: 1999-00—DfES Press release, £100 million to pilot ways to keep 16-18 year olds in education, 28.1.99. 2000-01—DfES Teachernet website, EMAs, 2.5.01. 2001-02 — LSC presentation, Learner Support Overview, summer 2001

2.4  Impact of paid work on retention and achievement in FE

    —  Working during term time is the norm for the majority of FE students. However, there does not seem to be any differentiation between the amount of hours worked by EMA recipients and non-recipients[40].

    —  On average FE students work 10 hours a week. Byram et al. found that working had a detrimental impact on study[41].

    —  over half of those surveyed felt that their part-time jobs restricted the amount of time they could spend on assignments, course work and revision.

    —  40 per cent experienced tiredness and reduced concentration in classes as a consequence of working at their part-time jobs.

    —  NUS is currently analysing the responses to a survey carried out by City College Norwich, and plans to repeat the study in a London College in the near future. We are happy to provide committee members with the data from both of these surveys as soon as they are available.

  NUS recommendations

    —  Statutory, grant-based funding, based on the EMA model is needed to support full-time 16-18 year old students nationally and full-time adults up to level three. Additional payments are needed in recognition of childcare, travel, disabilities and course costs.

    —  If loans are made available, these are only appropriate for part-time learners on short-term vocational courses at level three upwards. They must not be commercially assessed if the social inclusion agenda is to be committed to and should not be offered at commercial rates. Any commercial basis will exclude large sectors of British society, including many Muslim learners[42]. (see Annex 3)

    —  Government departments need to collaborate to ensure that education and employment targets do not conflict, but facilitate skill development and learning.

    —  Clear and comprehensive information and advice needs to be available before during and after study, to ensure potential adult learners get appropriate guidance on funding and benefits. This needs to be free and accessible.

    —  Colleges need to be aware of the demands placed on students who balance paid work with study. Support mechanisms should be considered, such as information on local wages, health and safety regulations, and flexibility from tutors on deadlines and assessment requirements. The feasibility of more local job shops should be considered to monitor local rates of pay and conditions, for FE students, possibly co-ordinated by local Learning and Skills Councils.


3.1  Student hardship

    —  Students with a low family income are entitled to a full student loan worth £3,815 for the 2001-02 academic year if they are studying outside London. According to NUS' Accommodation Costs Survey (2001), a student can expect to pay on average £2,301 a year on rent outside London[43]. This leaves £1,514 per year, or just £29 a week to meet all other basic living costs, such as food, travel and study costs[44].

    —  As a result, many students have to borrow money from other sources to make up this shortfall. For example, the Barclays Graduate Survey (2001) found that 60 per cent of students had an overdraft, 29 per cent had outstanding balances on credit cards and 12 per cent owed money to their parents.

    —  The cost of living for students is rising faster than the provision of student support. Table 5 gives comparative figures for students living inside and outside London from 1997-2001. The main points are:

    —  The cost of living has been rising nearly three times faster than the provision of student support for students inside London, and nearly four times faster outside of London. This may help to explain the increased need for students to supplement their income with paid work.

    —  Institutional accommodation alone has risen on average twice as fast as student support in London and one and a half times faster outside. Again, it seems that students are increasingly contributing to the sector through costs other than tuition.

Table 5


Inside London
Outside London
Average costs
of study* (£ p/a)
Average cost of institutional accom-
(£ p/wk)
Student support***
(£ p/a)
Average costs
of study*
(£ p/a)
Average cost of institutional accom-
(£ p/wk)
Student support***
(£ p/a)
Academic years
Percentage change 1997-98—2000-01
+35.5 per cent
+19.1 per cent
+10.7 per cent
+40.3 per cent
+15.8 per cent
+10.9 per cent


  *  Figures taken from NUS Press Packs 1997-98 and 2001-02. Costs over 38 weeks. Excluding tuition fees.

  **  Figures taken from NUS Accommodation Costs Surveys 1997-98 and 2001-02. Average cost across all institutional accommodation.

  ***  52 weeks of full student loan.

    —  In addition, Callender's research found that one in five students whose parents were assessed to make a contribution towards fees, received less than the assessed amount, and so faced a shortfall of £579[45].

    —  NUS recognises that going to university and obtaining a degree is an investment in the future, and that graduates are likely to earn more. However, it is unacceptable that the government expects the average student to live on an amount significantly less than those claiming JSA, when the latter is set at a rate considered to be the minimum weekly amount a single person can subsist on[46].

    —  As Yorke (1997)[47] concluded, reasons for non-completion are complex, however, finance is one of several significant factors. The Barclays' Graduate Debt Survey (2001) found that 20 per cent of students leave each year, possibly due to financial hardship.

    —  The DfES Student Income and Expenditure Survey[48] found that three in five students thought that financial hardship effected their academic performance negatively, especially those with the greatest financial difficulties.

  NUS recommendations

    —  The levels of student support need to be increased in recognition of the shortfall between student support and student expenditure and to realistically reflect the increases in costs of living and study.

3.2  Debt levels and spending patterns—problems with recent figures

    —  The government has cited the recent finding from the UNITE/ MORI Student Living Report (2002) that student debt is "up to £8,000". NUS would urge caution when using UNITE's average hardship figures. The survey aimed to be representative of the UK home student population. However, this meant that 34 per cent of the sample were first year students[49]. Due to the fieldwork being conducted from the end of October to the beginning of November, these students would have only recently commenced their studies and received their student support[50]. Such students will not have had the opportunity to experience how far their budget will stretch (or not, as the case may be).

    —  They are also likely to be more optimistic about their debt levels (being very low at that point) and their ability to manage their money. For example, the UNITE/MORI survey found that 39 per cent of students said they were "keeping up with their bills and credit card commitments without difficulty"[51]. This finding is not surprising for students who had recently started their course. However, the survey also found that, "the extent to which students struggle becomes gradually worse during each subsequent year of undergraduate study."[52]

    —  UNITE's averages also mask the difference in anticipated debt levels across different social classes. Within their survey, students from socio-economic backgrounds C2, D and E predicted that they will owe £9,376 by the end of their studies — 15 per cent higher than the average estimate and 22.5 per cent higher than peers from the same socio-economic groups in the previous year's study[53]. Therefore, on closer inspection, trends in the UNITE/MORI survey show an increasingly bleak picture for participation and retention for lower socio-economic groups.

    —  We would urge policy makers not to generalise about student debt levels and spending patterns. Mature students and those with dependants have a very different experience. For example, the DfES' own research (Student Income and Expenditure Survey) highlighted that lone parent students are more likely than any other student group to report financial problems.

    —  Evidence also points to student debt being an even greater problem in terms of recruitment and retention for certain subject areas. For example, the British Dental Association Student Debt Survey (2001) has found the average debt for final year dental students to be £11,600[54], an increase of 8.4 per cent on 2000-01. The potential impact of this debt level on participation is discussed in "participation figures" below.

  NUS recommendations

    —  Due to the unacceptable levels of on-going and graduate debt, low income groups need access to targeted grant-based funding.

    —  For longer courses and courses with higher equipment costs, such as medical and dental courses, architecture, and art and design, there is a need for the government to recognise these costs through additional grant based funding.

    —  Analysis of student hardship and debt and its impact on retention and achievement need to concentrate on specific student groups, as opposed to national averages, in order to develop informed and targeted policies.

    —  Fieldwork on student spending patterns, hardship and debt should not be conducted until at least the second quartile of any academic year if spending patterns and attitudes to debt are to be realistically assessed.

3.3  Impact of paid work on retention and achievement

    —  Research suggests that the decreasing level of student support, and the massive increase in the cost of living has led to a higher proportion of students working during term time[55]. The TUC's "Students at work" survey found that 60 per cent of those questioned had to work to meet basic living costs[56].

    —  Research shows that students from less well-off backgrounds are more likely to work, and to work longer hours than students from better off families[57].

    —  Callender's (2001)[58] review of research found that students are more likely to report adverse effects on studies of paid work, than to report positive aspects, ranging from 27 per cent to 79 per cent of samples. Looking at the effect of paid work on academic performance, Barke et al (2000) found that students who are working achieve on average 1.7 percentage points lower in their grades in comparison to non-working students. This gap is wider for females (at 2.7 per cent). A study of the impact of students working carried out by the University of Northumbria found that 43 per cent of those surveyed reported that their term time job had an adverse effect on their academic performance.

  Research has shown that other negative effects of working include:[59]

    —  Difficulties balancing work and study,

    —  Finding time to study,

    —  Getting very tired and too tired to study,

    —  Missing lectures, seminars, coursework deadlines,

    —  Difficulties in using university facilities,

    —  It is difficult to identify an optimum number of hours that a student could work without it affecting their study as students study patterns are so erratic.

3.4  Participation figures

  The government maintains that there has been a 3.1 per cent rise in applications this year. It is true that provisional figures for 2002 have shown an increase but a breakdown of application numbers by social class will not be available until December 2002.

  It is a fact that UCAS figures show that between 1997 and 2001, despite applications rising overall, applications from social classes IV and V have declined by 9.5 per cent (40,104 to 36,743).

  The government argues that comparing application rates for 1997 and 2001 is "not appropriate" as figures for 1997 were inflated by the changes in funding arrangements in 1998. NUS would argue:

    —  That the rush to enter in 1997 in itself shows that the new support arrangements were a deterrent.

    —  If you measure all groups from the inflated baseline, African Caribbean males and those from social classes IV and V have decreased the most.

    —  It is true that applications across all social groups have increased between 1996 and 2001. However applications from social classes IV and V have increased by only 3.8 per cent (35,373 to 36,743), compared to an increase of 8.7 per cent (364,885 to 399,645) overall. This shows that the poorest students are being deterred from applying.

  The importance here is the impact of student funding on decisions to participate in HE. We know that there is a growing stock of research, which shows that costs of study and the current funding package do indeed deter lower income students and mature students from entering HE. For example, we have the following findings:[60]

    —  The "overriding negative perception of going to university, for all the potential entrants, was its cost" (Connor et al, 2001).

    —  Prospective students from lower socio-economic classes are more likely than those from better-off families to report that they are deterred by the costs of HE, and the prospects of debt (Woodrow, 1998; Watt, 1999; Woodrow, 1999; Connor et al, 1999; Connor et al 2001; Knowles, 2000; Forsyth and Furlong, 2000).

  Mature students tended to worry about finances more than younger students, and are more likely to say they are deterred by the costs, and the prospect of debt (Connor et al, 1999; Connor et al, 2001). Their decision making is complex and characterised, at a personal level, by the concepts of fragility and risk (Davies and Williams, 2001).

3.5  Interest subsidies on loans

  NUS believes that charging a higher rate of interest on student loans would be regressive as it would hit the poorest graduates the hardest. Proponents of abolishing the interest subsidy overlook the fact that the current repayment threshold of £10,000 per annum is considerably lower than the average graduate income of £17,786 per annum, and therefore below a level of income at which a graduate could confidently say that they had "benefited" from their education.

  Analysis of HESA data on first destinations of graduates has shown that prior qualifications, social class, degree subject and outcome all effect the probability of unemployment after graduation, further study and employment in a graduate level occupation[61]. The National Audit Office's report on "Widening Participation in Higher Education" (2002) also found that HE gave no guarantee of a better job. In particular, they found that those from social group V earn on average 7 per cent less than those from social class I.

  Introducing higher interest rates on loans would mean that these poorer graduates would struggle for longer, and they would be the very graduates subsidising any income reinvested in HE. It would lead to those who earn less, such as public and voluntary sector workers, paying back their loans and accumulating interest for longer and therefore effectively paying more.

  NUS calculates that after 10 years, a graduate who had taken out their full student loan entitlement would have debts of nearly £18,000 if a rate of interest of 4 per cent was charged compared to approximately £14,000 under the current rate.

  Abolishing subsidies could also have a negative impact on participation amongst Muslim students. Charging any conditioned increment on a loan is considered a form of Riba, and is prohibited. Whether charging the rate of inflation or the cost of government borrowing on loans is acceptable remains a matter of interpretation for scholars. However, NUS has collected anecdotal evidence that indicates, even the current rate of interest on student loans, has led to some Muslim students having to finance their studies by other means or not continue their education at all. Annex 3 contains a support from the Muslim Council in Britain on this policy point.

  Neither the government nor independent research bodies currently collect data on applications according to religious belief. As a result, it is difficult to offer any analysis of the number of students who would potentially be affected by any rise in student loan interest rates.


4.1  Tax Credits

  Integrated tax credits will replace all child related funding given by different departments with one integrated means tested child credit. The Inland Revenue's consultation proposes that this should include dependants' grants and child elements of IS/ JSA. Student parents may receive their child-related funding through the Inland Revenue in the future. Although the budget has given a broad outline of the income thresholds for the tax credits, analysis of the impact on student parents is not possible until the Inland Revenue releases further details of the scheme. However, there are broad policy principles that NUS would wish to re-emphasise[62].

  NUS recommendations

    —  The respective government departments[63] must ensure student parents are not worse off under the new tax credits system. Detailed analysis of student scenarios would be welcomed.

    —  The government should recognise students and student nurses as eligible for tax credits.

    —  NUS urges the government to recognise unpaid placements as part of the 16-hour work rule to qualify for Employment Credit.

4.2  Housing Benefit

HB for students with disabilities in institutional accommodation

  Current HB regulations permit certain students to apply for HB except for institutionally owned accommodation (such as university halls of residence)[64]. This causes significant problems, particularly for disabled students, for whom institutional accommodation provides the safest and most convenient housing option.

HB for students as a safety net against poverty

  Students with a low family income are entitled to a full student loan worth £3,815 for the 2001-02 academic year if they are studying outside London. According to NUS' Accommodation Costs Survey (2001), a student can expect to pay on average £2,301 a year on rent outside London[65]. This leaves £1,514 per year, or just £29 a week to meet all other basic living costs, such as food, travel and study costs[66]. The current applicable amount of income for JSA and Income Support (IS) for single claimants aged 18-24 is £42.70[67]—£13.70 more than the average amount full-time HE students have to live on after accommodation is paid for. Thus student support income for some students is less than the recognised subsistence level set by the DWP for claimants on JSA or IS and HB after accommodation has been paid for.

  Access to HB is means tested to offer a safety net against poverty. Since 1990, full-time students have been excluded from eligibility to HB, not on the grounds of income, but on the grounds that their funding is provided through the student support system. However, using DWP legislation, student income is not necessarily treated as income over a 52-week period for the purpose of HB[68]. Any other citizen with an income below the recognised level of subsistence would be offered HB on a means tested basis. NUS believes full-time students should be treated on an equal basis. This issue also emerged as an important issue during the investigation into student funding and hardship in Wales as highlighted in the Rees Report.

  NUS recommendations

    —  HB should be extended to students with disabilities in university owned accommodation, where it can be shown that this is the most appropriate accommodation for the student.

    —  HB should be made available to full-time students as a low-income group for eligible accommodation.

4.3  Intercalating students

  The lack of support for intercalating students (ie students who suspend their studies) is still the most commonly criticised funding gap. The Social Security Advisory Committee (SSAC) noted this issue in its report on the draft Social Security Amendment (Students) Regulations 2000, though the government did not take up the report's recommendation to extend support to all intercalating students[69].

  At the moment the only guarantee of income is for undergraduate students who have an ongoing entitlement to a student loan and who are ill for the first 60 days. Other intercalating students do not have a financial safety net, including pregnant students, those who suspend study for personal problems, intermittent mental illness, extreme financial hardship or premature termination of work placements. After the 60-day period and for other intercalating undergraduate students they must rely on their LEA's discretion to extend their loan support, or their institution's discretion in allocating hardship funds. Anecdotal evidence collected by NUS and individual students' unions suggests that discretionary funding is not often awarded[70].

  After 28 weeks of illness students may be able to claim IS. Once recovered from illness, or if a student has ceased caring duties and is waiting to return to studies, they may claim JSA and HB[71]. However, this is only extended to groups of students who have intercalated — ie those who have been ill and those who have had caring duties.

  Lack of financial support for students who suspend their studies has a direct impact on retention. Furthermore, NUS believes that in all cases the problem feeds into the broader issue of social exclusion, and, in the case of pregnant students, child poverty.

  NUS recommendations

    —  NUS welcomes the extension of entitlement to JSA and HB for certain intercalated students up to the day before they return to their course.

    —  In support of SSAC's recommendations, students who intercalate for any reason should have an entitlement to IS or JSA (according to their availability for work), HB and CTB to act as a safety net for drop out.

    —  Data should be collected centrally on the number of intercalating students, reasons for intercalation, applications for discretionary funding and success rates for such applications. This would enable an informed policy to be developed within this area.

4.4  Postgraduates

  The "writing up" period is particularly difficult for postgraduate students. Due to the unclear definition of period of study under JSA regulations, students may be unable to claim whilst writing up a thesis/dissertation, even though they may be available to work. The definition of "period of study" for JSA includes any work undertaken in connection with the course. The DWP has helpfully released guidance to employment services and local authorities which states:

    "If further research or writing a thesis has to be done after the course has ended, a decision on whether the postgraduate student is regarded as a full-time student during this period should be made depending on the amount of work being undertaken at that time and all the circumstances of the case. It should not be based on the fact that the course was full-time"[72].

  Although this is helpful in clarifying that the policy intention may not be to exclude all postgraduates who are writing up from accessing JSA and HB, the regulations may be interpreted as including writing up a thesis/dissertation. It seems to be the case in this instance that the regulations are tighter than the policy intention. Again, the non-availability of support when students cannot find work leads to a period of financial anxiety, which can impact on the completion of study.

  NUS recommendations

    —  NUS believes that the government's policy intention cannot be to prevent postgraduate students from completing their work. The JSA definition of period of study should be amended, for example, to exempt non-structured, part-time study completion if the student can show that they are available for work.

4.5  Lone parents and Income Support

  Income Support currently ends when a lone parent student's youngest child reaches the age of 16 while still studying. This funding can be a vital safety net for students on such a low income and with family responsibilities. NUS believes that it is absurd to expect anyone to be so effective in life-planning as to be able to complete a course while all their children are under the age of 16. Although SSAC recommended an easing of the rules to allow lone parents to complete courses where they were at least half way through the course, the DWP concluded that " . . . it is reasonable to expect a lone parent who wishes to study full-time to undertake and complete a course of full-time study before their youngest child reaches the age of 16"[73]. The practical implications of this are that lone parents should be encouraged to seek guidance and enter education by the time their youngest child is 11[74].

  In addition, another complication has arisen; NUS has received cases from students and student advisers concerning those lone parent students claiming IS being required by the Benefits Agency to go for compulsory work-focused interviews during the summer vacation to determine future prospects. For students still progressing through their course, it is not a cost-effective exercise for DWP staff to discuss future employment plans whilst still studying, nor is it convenient for student lone parents.

  NUS recommendations

    —  NUS urges the government to reconsider SSAC's advice to enable lone parents who commence a full-time course to maintain entitlement to IS for the duration of their studies, even if their youngest child reaches 16.

    —  NUS recommends that compulsory work-focused interviews for lone parent students, which hold no benefit either for the Benefits Agency or for students, be terminated.

4.6  Conflicts within government policy

  Under the current system, lone parents and certain disabled students are eligible for IS whilst studying full-time. However, due to the different treatment of student income by the DWP and Department for Education and Skills (DfES), students can be left for a significant period without any means of support. Consequently, for the current academic year (2001-02), the DWP ceases IS payments on 1 September 2002[75]. However, students are unable to access their student loan and dependants' allowances until their course has recommenced, which can be a number of weeks later. Although Hardship Funds are theoretically available, many institutions will not have the level of funding to support students through this period. What is more, there is no guarantee for the student that the Hardship Funds will be able to guarantee a bridge in funding for each year this happens. This leaves students in a vulnerable position, lacking funds for a significant period of time. Again, NUS believes that this problem can potentially have a direct impact on drop out rates.

  NUS recommendations

    —  NUS believes that interdepartmental policies conflict, leading to unnecessary student hardship and potential student drop out. DWP should review its legislation to treat the student loan and dependants' allowances as income either over the real period of study (ie academic terms plus short vacations) or over 52 weeks.


  NUS believes that the current system places an unfair financial burden on students and is inconsistent with the Government's policy goals to widen access, increase participation and that those who benefit from higher education contribute towards the costs.

  The Government's review of student funding provides an opportunity to get student funding right by achieving a better balance between student and state contributions, particularly for those from low income backgrounds.

  NUS urges the Government to restore targeted maintenance grants, end up-front tuition fees, make EMAs available to all students in FE and maintain a system of subsidised loans to end student hardship and ensure a fair system of funding for all.

29   The government converted maintenance grants worth £1.1 billion into student loans (Dr Kim Howells PQ, Hansard 31 July 1997). The interest subsidy on student loans costs the government approximately 35 pence in every pount-therefore the estimated cost to the government of providing £1.1 billion in student loans is £385 million. As a result the government made a saving of approximately £715 million. Back

30   Please see annex 2 for details of recommended changes to the EMA means test. Back

31   AUT has estimated that a non-repayable bursary of £2,000 for one-third of UK domiciled first-year full-time undergraduates in England and Wales would cost approximately £150 million. Back

32   Karl Ashworth, Jay Hardman, Woon-Chia Liu, Sue Maguire, Sue Middleton (Centre for Research in Social Policy, Loughborough University) and Lorraine Dearden, Carl Emmerson, Christine Frayne, Alissa Goodman, Hidehiko Ichimura and Costas Meghir (Institute for Fiscal Studies); 2001, Education Maintenance Allowance: The First Year A Quantitative Evaluation, DfEE Research Brief 257. Back

33   Sue Maguire, Malcolm Maguire, Claire Heaver, Implementation of the Education Maintenance Allowance Pilots: The Second Year, 2002, DfES Research Brief 333. Back

34   Institute for Employment Studies, Evaluation of Learner Support Funds in Further Education: Findings of Survey, 2001, DfES. Back

35   Times Educational Supplement, May 2001. Back

36   ie there is no guarantee of support for the duration of a course. Back

37   Learner Support Funds consist of Access Funds, Childcare Support, Residential Bursaries. Back

38   Institute of Employment Studies, 2001, ibid. Back

39   Individual Learning Accounts were a discount scheme for tuition fees, available for part-time students aged 19 and over undertaking vocationally orientated courses. Back

40   Education Maintenance Allowance: The First Year A Quantitative Evaluation, DfEE Research Brief 257. Back

41   Byram, P, Backhouse, J, Bange, J,-"Impact of Part-time Work on Full-time Students" (January 2001). Back

42   Borrowing money that attracts interest-or "Riba"-is prohibited under Islamic beliefs. Back

43   NUS (2001) Accommodation Costs Survey. Back

44   This calculation divides the remaining student loan over 52 weeks, in accordance with DfES policy. Back

45   Callender, 2000, Student Income and Expenditure Survey, DfES. Back

46   Single claimants aged 18-24 receiving full JSA would receive £42.70 per week (April 2002-March 2003), in comparison to £29 per week given to students after accommodation costs are covered. Back

47   Yorke (1997) Undergraduate Non-Completion in Higher Education in England, HEFCE. Back

48   Callender, 2000, Student Income and Expenditure Survey, DfES. Back

49   This is the weighted percentage in the UNITE/MORI Survey (2002). HESA figures for the 2000-01 academic year show that 1st year UK full-time undergraduate students made up 35 per cent of the UK full-time undergraduate student population, HESA (2001), Student Enrolments on Higher Education Courses at Publicly Funded Higher Education Institutions in the United Kingdom for the Academic Year 2000-2001, SFR 48. Back

50   The fieldwork was conducted from 22 October to the 16 November 2001. Most academic terms start from the beginning of October. Therefore the majority of the 1st year respondents will have been studying for only around three to five weeks. Back

51   UNITE/MORI (2002), p. 25. Back

52   UNITE/MORI, ibid, p. 25. Back

53   UNITE/MORI (2001) Student Living Report. Students from socio-economic groups C2, D and E estimated their debt on graduation to be £7,652. Back

54   British Dental Association, (2001) Student Debt Survey. Debt figures exclude those with no debt at all and outliers with debts above £30,000. Back

55   Callender (2001) The Impact of Student Debt on Participation and Term-Time Employment on Attainment: What can research tell us?, Universities UK. Back

56   Students at work 2000-Labour Research Department. Back

57   Callender, C & Kemp, M-"Changing Student Finances: Income Expenditure and Take-up of student loans among full and part-time higher education students in 1998-99" Research Report RR213, DfEE, London; Connor et al.-"Social Class and Higher Education: Issues affecting decisions on participation by lower social class groups" Research Report RR267 DfEE, London. Back

58   Callender (2001) ibid. Back

59   Callender (2001) ibid. Back

60   Callender (2001), ibid. Back

61   Smith, McKnight and Naylor (2000) Graduate Employability: Policy and Performance in Higher Education in the UK; Economic Journal, 110. Back

62   See NUS' response to the Inland Revenue's consultation on "New Tax Credits: Consultation Document", October 2001. Back

63   The respective government departments include the Department for Education and Skills (DfES) in terms of Dependants Allowances, Department for Work and Pensions (DWP) in terms of Income Support and JSA, and the Inland Revenue (IR) in terms of the Tax Credits. Back

64   Vulnerable groups able to claim HB whilst studying full-time include lone parents with children under 19, students with certain disabilities, student couples, certain intercalating students. Back

65   NUS (2001) Accommodation Costs Survey. Back

66   This calculation divides the remaining student loan over 52 weeks, in accordance with DfES policy. Even if the remaining loan was divided over 43 weeks, in accordance with DWP policy on treatment of students income, the weekly amount would be £35.21-Divided over 38 weeks (the usual period of study plus two short vacations) the weekly amount remaining is £39.84. Both of these amounts are still below the subsistence level recognised by DWP. Back

67   IS/JSA rates for April 2002 to March 2003. Back

68   For example the student loan is treated as income for full-time degree students over complete benefits weeks within September to June (this works out as 43 weeks for the 2001-02 academic year). Therefore, a full time student taking out a full student loan in England would be assessed as having a weekly income for the purposes of Housing Benefit of £78.72 [(£3,815/43 weeks)-£10 weekly loan disregard] between 3 September 2001 and 30 June 2002. They would be assessed as having no income under HB from 1 July 2002 to 1 September 2002. Back

69   The Draft Social Security Amendment (Students) Regulations 2000; Cm 4739; London June 2000. Back

70   Anecdotal evidence is the only source available as there is no systematic collection of data on the number of intercalating students. Back

71   Within an extended period, as a result of the proposed changes to the JSA and HB regs from August 2002. Back

72   DWP, HB/CTB Circular A39/2001: paragraph 15. Back

73   Statement by the Secretary of State for Social Security; Draft Social Security Amendment (Students) Regulations 2000; June 2000. Back

74   This period would allow one year of non-advanced study and a three-four year level four course. Back

75   The DfES treats the loan and dependants' allowances as a 52 week income; the DWP treats them as a 43 week income (ie from the first complete benefit week in September to the last complete benefit week in June-3 September 2001-30 June 2002 for the 2001-02 academic year; 2 Sept 2002 to 29 June 2003 for the 2002-03 academic year). Back

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