student loan

The End of the University Grant

It was probably a long time coming, but yesterday, after many threats, saw the Government finally decide to abolish the university grant, that in the past has helped so many students attend university, even when they couldn’t afford it. The day was of course met with millions of protesters who couldn’t quite believe that it was actually happening as in great government fashion the new law is targeting the poorest students, who struggle to afford the university experience as it is. Around 500, 000 of the UK’s poorest students are said to be hit by rising tuition fees as they now stand at £9, 250 per year. The maintenance grant, that was originally given to students who had a household income below a certain amount, has now been replaced with a loan, which of course requires repayment when that person is earning. The move has accused ministers of simply punishing poorer students for no other reason than being poor. The new system basically sees the less privileged student, taking out a bigger loan than those from a family with a higher income, and the main fear is that it will put less financially stable students off from applying to attend university altogether.

student in debtConstant Debt

The fear of student debt is unsurprisingly off-putting for many. Obviously, there are potential students who are more debt-adverse than others. The student loan repayment means that students are not required to pay back the loan they have borrowed until they are earning £21, 000 and above, however some people may not be aware of this system. As is the case in the BME (Black Ethnic Minority) in universities, student debts are viewed in the same way as any other debt, with a certain urgency to return what they have borrowed, which understandably can be crippling. The same goes for mature students who are generally much more financially aware and don’t want such a large debt hanging over them, and are therefore reluctant to borrow. The Government has come under fire for putting little thought into passing the bill, which saw just 18 MP’s (most of which no-one had really heard of) and a 90 minute debate set the score for the students of today. If a student’s household earned less than £42, 000, then a student was entitled to a maintenance grant, which increased with the less a household earned. If the household income was below £25, 000 then the student was entitled to full maintenance pay of £3, 387 per year. This is now to be abolished and the re-payable student loan increased, to £8, 200 outside of London and £10 , 702 in the capital. The thoughts behind this action has been branded as typically Tory as they do not know what it is like to be in financial difficulty.

Paying it back

With a strong belief that university helps a person to grow and develop, the Liberal Democrats are determined to fight this decision that will potentially see a decrease in the amount of people student loanattending university, despite the Torys saying that this will make the fact that someone has gone to university, more valuable. In other student finance news, the Conservatives have also frozen the student loan pay back threshold at £21 , 000 despite promises that this would rise, meaning that more and more people will be required to pay back their loans sooner than they expected. Proof that the new Government is refusing to listen to the majority surfaced when 84% of people opposed the move to freeze the earning limit, and it went ahead anyway. The Torys have been accused of managing the economy badly, and leaving student loan borrowers to ‘foot the bill.’ Trust for the student finance system has dramatically dwindled as a result of the unfair changes, despite protest.

In defence to their actions, the Government has argued that students will now actually have more money in their pockets whilst at university, due to being provided with a bigger loan. However, the one problem with that is that it will all now have to be paid back, whereas before, over £3000 did not require repayment. Thinking to the future, it will be more difficult for students to maintain a steady income, because as soon as they are earning enough, the bigger loan that is now borrowed, will have to be paid back. The Conservatives continue to insist that they do not want affordability to be a barrier to higher education.