Treating Students Fairly: The Economics of Post-School Education Contents

Chapter 9: Maintenance support

“People from poorer backgrounds are borrowing more, having more debt, and pay less back. They come out with more debt and it takes them longer to pay it back.”

“I had to leave University because I couldn’t cover my rent with my student loan.”

“I have £50 a week after accommodation. [I know] some people whose loan doesn’t cover accommodation costs.”308

301.As the quotes from students and apprentices above illustrate, many are unhappy with the current system of maintenance support. The problems identified in evidence to us were:

(a)The abolition of maintenance grants and the move to a loan-only system.

(b)The amount of support available.

(c)The restrictions on who is entitled to maintenance support.

Current system

302.In England, full-time undergraduate students may be eligible for between £7,000 and £11,000 a year in maintenance support. As shown in Table 12, the amount a student will receive varies depending on their parents’ income, course location, and if they live at home. A student’s tuition fee loan is added to the maintenance loan and they are repaid on the same terms.

Table 12: Maintenance loan entitlement (2017/18)

Maximum available

Minimum available

Living away from home, outside London



Living away from home, in London



Living at home



Source: Student Finance, How You’re Assessed and Paid, 2017/18: [accessed 15 March 2018]; Department for Business, Innovation and Skills, Loan, Grant and Tuition Fee Rates for Academic Year 2017/18: [accessed 15 March 2018]

303.At present, full maintenance support is available only to full-time undergraduate students. From 2018/19, maintenance support will be available for part-time Level 6 degree courses and the Government is intending to extend maintenance support to part-time Level 4 and 5 study, and distance learning courses, from 2019/20.309 Maintenance support in further education institutions is only available in the National Colleges and Institutes of Technology. Figure 10 below sets out which types of study and training carry with them an entitlement to maintenance support from the state.310

Figure 10: Maintenance support available by level and type of study/training

Graphic showing types of support available by type of study/training

Abolition of maintenance grants

304.Prior to 2016, maintenance support was provided through a mixture of means tested grants and loans. In 2015/16 a student outside London could receive total support of £7,434. This included a grant of up to £3,387. As Figure 11 demonstrates the balance between maintenance grants and loans has fluctuated since the introduction of tuition fees.

Figure 11: Student maintenance support 1999/2000 to 2018/19 (new students England, September 2017 prices)

Bar chart showing numbers of students receiving maintenance support by grant or loan from 1998/99 to 2018/19

Source: House of Commons Library, The Value of Student Maintenance Support, Briefing Paper No 00916, 5 March 2018

305.Two cohorts of students have entered university since maintenance grants were abolished. For some witnesses the impact of inadequate maintenance support was greater than concerns about tuition fees. “We get very bogged down in tuition fees”, Professor Buckingham, board member of Universities UK and Vice-Chancellor of Brunel University, told us, “and we forget that the bulk of the cost in going to university is the maintenance while you are there.”311 Witnesses were concerned about the level of debt incurred by the poorest students. They argued this had an impact on the willingness of students from disadvantaged backgrounds to go to university.

Level of debt

306.Further issues arise from the way the entitlement to maintenance loans operates. Maintenance loans are means tested: the largest loans are provided to those with the lowest household/parental income. As a result, students from the poorest backgrounds receive the highest loans and therefore accrue the largest debts.

307.Analysis by the Institute for Fiscal Studies suggests that students from the poorest 40 per cent of families will graduate with an average debt of £57,000; their peers from the richest 30 per cent of families will owe £43,000.312 This £14,000 difference is entirely due to maintenance loan entitlement and the accrued interest.313

308.The unfairness of the system continues following graduation. Data published by the Department for Education show that students entitled to free school meals have lower average earnings after graduation; five years after graduation those eligible for free school meals earned 13 per cent less than those not entitled.314 As illustrated above graduates with more modest earnings pay more over the lifetime of their loans.

Impact on participation in higher education

309.A common concern was that students from poorer backgrounds were put off going to university. The Minister for Universities and Science told us that the data show that “someone from a disadvantaged background is 50 per cent more likely to go to university now than in 2009. So it clearly has not been a deterrence.”315

310.The NUS pointed to the importance of maintenance grants in achieving this increase:

“Maintenance grants were a key element in improving the accessibility of university for the most disadvantaged young people, but they were scrapped by the Government in 2016.  In the last decade participation in Higher Education by the poorest students has increased, but this was partly driven by the availability of non-repayable grants.”316

311.Paul Johnson, Director of the Institute for Fiscal Studies, echoed this: “we know that the up-front availability of maintenance money is a really important part of what determines whether poorer students in particular go on to higher education.”317Mr Johnson stated that it was too early to measure fully the impact of the abolition of grants.318 Students and universities were clear that the most recent increase in loans deterred poorer students. London South Bank University cited research showing that “debt aversion has the potential to put off young people from the poorest socio-economic backgrounds from applying to university.” They continued, “this problem will only be compounded by the replacement of maintenance grants with larger loans”.319

312.The University of Cambridge was “concerned that levels of debt resulting from the present student loan system are a deterrent for many students, and … present a real risk to maintaining current levels of access.”320 University College London highlighted research showing that “grants have a positive impact on participation. Substituting maintenance loans for maintenance grants has been highly regressive and has affected participation rates for those from disadvantaged backgrounds.”321

313.It may also affect students’ choice of university. Hannah Morrish, from the Student Room website, told us that 30 per cent of students who had received free school meals choose to live at home. This compared to 20 per cent of students who had not received free school meals.322

Amount of support

314.The level of maintenance loans available was considered inadequate by a number of witnesses. Students we spoke to were clear that “loans should cover the cost of living—they currently are not sufficient to cover groceries, housing and people are suffering to get through university”.323

315.When loans were introduced the total amount of funding was increased, but the students we spoke to were clear that the amounts available were “not enough to cover my rent never mind food, bills, stationary.”324 The NUS told us that “one in seven” students “admit that they have been chased by debt collectors as a result of missing rent payments” and “nearly half … are worried about having enough money to buy essential groceries such as bread and milk.”325

316.Martin Lewis OBE described the lack of student support as “outrageous”. He argued that “the biggest problem with student finance at the moment is that loans are not big enough, not that they are too big”.326 The Minister acknowledged that worries about money were “very serious points” that he was “very alive to”.327


Part-time study

317.From 2018/19, the Government plans to make maintenance support available to part-time higher education students. Previously, part-time students were eligible for tuition fee loans, but not support for living and other costs. The CBI pointed out that this “can reduce the attractiveness of part-time study given many will need to reduce working hours—and therefore income—to meet the course commitments. This disincentive is likely to be particularly acute for those on low incomes or who have to balance study and work with caring responsibilities.”328

318.Providers of part-time higher education supported this view. Professor David Latchman CBE, Master of Birkbeck University, told us Birkbeck’s traditional four-year course had “lost catastrophic numbers”, but a three-year online and classroom learning course now attracted two-thirds of undergraduates because of “the paradox that that is officially classified as a full-time course [ … ] Therefore, the students get maintenance loans.”329

319.Witnesses welcomed the Government’s commitment to introduce maintenance support for part-time higher education students. This may be extended to distance learners from 2019/20, “subject to the development of a robust control regime to manage the particular risks and challenges associated with this mode of study”.330

Further and sub-degree education

320.There is no consistent provision of maintenance support outside the university sector. In England, they can access some grant support from a complex web of discretionary bursaries which replaced the Educational Maintenance Allowance. The amounts awarded are typically under £1,000 and subject to criteria set by individual colleges.

321.Peter Mucklow, from the Education and Skills Funding Agency, said that nonetheless “significant student support funds are available to institutions to support students.”331 The Association of Colleges explained that the sources of funding shown in Table 13 are available.

Table 13: Discretionary funding support for further education students (2015/16 costs and student numbers)

Type of Support

Number of students supported

Cost [total/ per head where available]


16–19 year olds

Vulnerable Group Bursaries


£23 million/up to £1,200 per head

Limited to children in care; leaving care or in receipt of certain benefits

Discretionary bursaries


£143 million/£60–£4,000 per head (£447 per head in 2013/14)

Assessed by colleges and schools and can be paid in cash directly or indirectly.

Free School Meals


£31 million/£2.41 per day

Care to Learn


£30 million/up to £175 per week

Parents under 20 to support travel and childcare costs


Discretionary bursaries

Not known [total number of learners 2.34 million]

£86 million

At college’s discretion

Advanced learner loan bursary spending

Not known [95,000 loans were awarded]

£35 million

To assist with travel, accommodation and child care costs. At discretion of FE provider.

Higher education

Maintenance Loan

1 million

£5 billion (average loan in 2016/17 £5970)

Source: Written evidence from the Association of Colleges (HFV0118); Department for Education, Further Education and Skills in England November 2017 and November 2016: and; Student Loans Company, Student Support for higher education in England,

322.Aston University said that:

“Students from the most deprived backgrounds in the region are reliant on … providers to offer some financial support to ensure they can complete their study. Often this is limited to a very small bursary which does not meet the student’s needs”332

323.For greater levels of support, students may seek Personal Career Development Loans available from two high-street banks. These are at the discretion of the providing banks and, it was suggested, “represent a more expensive, potentially ‘riskier’ option for most learners.”333

324.The current maintenance system for post-school education is unfair. For those entitled to loans:

(a)the loans available are insufficient to cover day-to-day living expenses; and

(b)the loans impose the greatest burden on students from the poorest households; the most disadvantaged students graduate with the largest debt.

325.For some students these problems are a greater concern than tuition fees. Universities report that those from the poorest backgrounds are deterred from pursuing university education.

326.The current maintenance system is also inconsistent. It perpetuates inequality across higher education by restricting maintenance support to certain types of student and certain institutions to the neglect and detriment of others.

Creating a fair maintenance support system

Type of support

327.The provision of support only through loans is, as we conclude above, deeply unfair. Witnesses suggested alternatives to the current arrangements. University College London proposed the “urgent re-introduction of maintenance grants.”334 This would be a significant upfront cost to the Government. In 2016/17 the average maintenance loan for a first-year student was £5,970, totalling £1.9 billion across the cohort.335

328.Another option proposed was the partial replacement of loans with grants, returning to the pre-2016 system. Under this proposal maintenance support would comprise:

(a)grants (on the same terms and up to the levels available prior to 2016/17); and

(b)loans (up to current available level of loans so that the overall cash available to students does not reduce).

329.The IFS calculated that this would add £1.7 billion to the deficit, as seen in Table 14.

Table 14: Cost of system with maintenance loans versus the pre 2016/17 mixed means-tested maintenance grant and loan system

Current system (no grants)

Mixed grant and loan system (means tested)

Upfront spending (maintenance and tuition fees)

£16.7 billion

£16.7 billion




Expenditure on grants (immediate deficit impact)

£0.7 billion

£2.4 billion

Long-run government cost (taking into account repayments)

£8.4 billion

£8.8 billion

Source: IFS, Options for reducing the interest rate on student loans and introducing maintenance grants: [accessed 24 May 2018] and and Institute for Fiscal Studies (see Appendix 7)

330.Although the change would lead to £1.7 billion more public spending today, in the long-run grants increase public spending only by £400 million. This is because under the current system, the vast majority of students do not pay off their student loans fully over the 30 year term, so much of the outlay in loans will be written off.

331.Some witnesses suggested that any reform should be limited to making bursaries available to certain professions or to greater use of student hardship funds.336

332.The structure of student maintenance support must not place students from poorer backgrounds at a long-term disadvantage. A maintenance system based only on income-contingent loans will deter some prospective students from applying; a grant-only system would be too big a burden on public funds. We therefore recommend that the Government reinstate the means-tested system of loans and grants that existed before the 2016 reforms.

333.The inadequate level of maintenance support is causing hardship to students. We recommend that the maximum maintenance support should be increased to reflect the cost of living for students. This increased support should be available as a mixture of means tested grants and loans as set out above.

334.These loans would be repaid on the same terms as we recommend for tuition fee loans. The overall cost of these changes is set out in Chapter 10.


335.A further question is whether this revised support should be extended to all higher and further education students?

336.As outlined above, further education students are not currently entitled to maintenance loans. The Government has provided for the partial extension of maintenance loans to some other higher education courses. From 2019/20 maintenance loans will be available to students studying sub-degree courses (such as foundation degrees or National Diplomas) at two types of institution:

(a)National Colleges: four colleges (High Speed Rail, Nuclear, Digital Skills, and Creative and Cultural Industries) are currently open. A fifth college (Onshore Oil and Gas) has been delayed. The number of students currently being educated at these colleges is small. In the longer term the colleges’ plans suggest they would educate fewer than 6,000 students a year at full capacity.

(b)Institutes of Technology: in January 2017 the Government outlined plans to establish new Institutes of Technology and promised a new investment of £170 million in capital funding.337 The contracting process to run these institutes is under way and the results will be announced at the end of 2018. The first institutes are expected to open in September 2019.338

337.When the Government consulted on plans to extend maintenance loans to further education students at National Colleges and Institutes of Technology the responses received showed “strong support” for extending maintenance loans to further education. The majority believed this should be based on the qualification studied.339 The Federation of Awarding Bodies suggested that maintenance loans be expanded “at the very least” to “all higher-level learning in subjects that focus on areas where there are current skills gaps.”340

338.Access to maintenance support should be consistent across all post-school education, regardless of method or place of study. We recommend that the Government extend maintenance support to:

(a)students studying for a qualification at Level 4 or above in a further education college; and

(b)all part-time and distance learners at universities and further education colleges studying for Level 4 and above qualifications.

339.Differences between qualifications should be reflected in the loan rates and repayment structure.

308 Evidence from students and apprentices, see Appendix 5.

309 See paragraph 319.

310 See paragraph 336.

311 Q 73 (Professor Julia Buckingham)

312 Institute for Fiscal Studies, Higher Education funding in England: past, present and options for the future (July 2017): [accessed 14 May 2018]. The IFS analysis assumes that students take out the full loan they are entitled to, are at 2017 prices, not discounted, and include interest.

313 Students from the poorest 40 per cent will accrue £6,500 interest over the course of their degree. Those from the highest 30 per cent will accrue just under £5,000.

314 Department for Education, Graduate outcomes (LEO Graduate outcomes (LEO): Employment and earnings outcomes of higher education graduates by subject studied and graduate characteristics (March 2018): [accessed 15 May 2018] Students who entitled to free school meals earned £22,500; those not entitled, £25,800. The data do not include a number of pupils from independent schools were data on free school meal status is not collected.

315 Q 163 (Sam Gyimah MP)

316 Written evidence from the NUS (HFV0050)

317 Q 2 (Paul Johnson)

318 Ibid.

319 Written evidence from London South Bank University (HFV0014)

320 Written evidence from the University of Cambridge (HFV0040)

321 Written evidence from UCL (HFV0077)

322 Q 18 (Hannah Morrish), The Student Room, Options 2017: [accessed 15 March 2018]

323 Informal evidence from students, Appendix 5.

324 See Appendix 5.

325 Written evidence from the NUS (HFV0050); see also Q 16 (Shakira Martin).

326 Q 18 (Martin Lewis OBE)

327 Q 163 (Sam Gyimah MP)

328 Written evidence from the CBI (HFV0089)

329 Q 64 (Professor David Latchman CBE)

330 Department for Education, Part-time Maintenance Loans Government consultation response (March 2017): [accessed 15 March 2018]

331 Q 134 (Peter Mucklow)

332 Written evidence from Aston University (HFV0099)

333 Written evidence from the National Union of Students (HFV0050)

334 Written evidence from UCL (HFV0077). This was also proposed by many of the students we spoke to (see Appendix 5).

335 These are loans provided under the revised 2016 maintenance loan scheme. Student Loans Company, Student Support for Higher Education in England 2017: academic year 2016/17 payments, 2017/18 awards (November 2017): [accessed 14 May 2018]

336 Written evidence from the University of Surrey (HFV0021)

337 Department for Business, Energy and Industrial Strategy, Building Our Industrial Strategy (Jan 2017): [accessed 15 May 2018]

338 Association of Colleges,’Institutes of Technology policy statement and application forms’ (Dec 2017): [accessed 15 May 2018]

339 Department for Education, Further Education Maintenance Loans A summary of the consultation responses (September 2016): [accessed 16 May 2018]

340 Written evidence from the Federation of Awarding Bodies (HFV0034)

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