A fundamental failure in the foundations of student loans is the misleading nature of ‘student debt.’ Money man Martin Lewis calls the debut you rack up a “meaningless figure. What counts is how much you’ll repay.” Martin Lewis then goes on to explore how due to the 20-year (for undergraduates) forgiveness period, and £27,000 a year margin to repay, the loan becomes a “no win, no fee” form of agreement.
These words are vital to students, shown by London-based news outlet ‘The Conversation’ in their survey of over 1,000 17–21-year-olds, that concluded debt aversion has increased in both working-class and middle-class students, with a third of students in 2015 strongly agreeing with the statement: “I would worry a lot if I ever got into debt.” This research led to the terrifying point that due to misconceptions around loan debt, working-class young people are far less likely than students from other social classes to apply to university.
Whilst it has been shown the repayment system is futile, it is the survival on such a limited budget that complicates a student’s lifestyle. In my application for university, the first place I was drawn to was King’s College London, however despite additional maintenance loan support for living in London, not only would I be vastly short of any accommodation expenses, but I also would simply not be able to afford the lifestyle of living in London.
This led me to Newcastle, where I am short of rent, but luckily with my parents’ subsidies can live comfortably. However, for a working-class 19-year-old, raised in a place where I received a ‘deprived area offer’ this should not be the case.
Living in student accommodation with 9 other first years, 8/10 of us have a maintenance loan that does not cover rent, leaving us reliant on parent subsidies or a burden of part-time work — where the money earned from working should be providing more comfortable luxuries and not necessities. Even more fascinating, the two in my flat who do receive a sufficient loan have done so by tactical means, involving putting the address of the lesser earning parent rather than the one who would have given a lesser loan. It begs the question why are students jumping through hoops for their maintenance loan to meet its criteria?
My stance on maintenance loans is rather clear, they are no longer fit for purpose, and that is shown by only the mire cracks in the surface. A radical transformation of the student loan system is desperately overdue, making the repayment system worthwhile and maintenance loans an actual root of support for those who need it.
Should we be optimistic about change? In September 2021 it began circulating of the government’s plans to lower the repayment threshold from £27,000 to £23,000 meaning students would be paying back their loans sooner, so students shouldn’t hold their breath.