We can reveal that students who don’t (or can’t) follow the government’s parental contribution guidelines are left up to £5,860 a year out of pocket.
As most students are well aware, Maintenance Loans are means-tested. This means that the government calculates how much money students get in loans based on how much their parents earn.
Only students whose parents earn below £25,000 a year receive the full Maintenance Loan (as well as a grant for any students who started uni before 2016) – everyone else will receive less.
The more your parents earn, the less money you get, and the government expects parents to make up the shortfall (so that, in theory, all students eventually receive the same amount).
But, as every student’s financial situation is different, it’s very debatable whether this is a fair or adequate way to distribute loans.
How are Student Loans calculated?
We’ve put together a handy calculator tool which uses the same formula that the government uses to assess loans, so you can know with confidence exactly how much your parents are expected to contribute.
Maintenance Loans are calculated based on this information:
- How much money your parents make each year
- Whether you live in your family home during uni or move away
- Your age (if you’re over 25, it’s based on your own and/or any partner’s income)
- Where in the UK you choose to study (different rates for London)
- Whether your parents have any other children at uni at the same time as you (in which case they can reduce the household income figure by a nominal £1,130 per additional child).
For English students, the maximum Maintenance Loan has been set at £8,944 if you’re studying away from home anywhere outside of London, £11,672 if you move to London for university, and £7,529 if you choose to stay at home (see our guides to Student Finance in Northern Ireland, Scotland and Wales for Maintenance Loan details there).
These are figures that the government has deemed adequate to cover students’ living costs for the year (but according to our research, it’s nowhere near enough).
Parental contributions to student living costs
Our calculator reveals that if a student’s parents aren’t contributing as much as the government expects them to, the student could be missing out on as much as £5,860 a year (that’s if they’re studying within London – it’s £4,776 outside of London).
This is particularly worrying as the government says themselves that parents are not legally obliged to supplement the loan, but they are expected to pay a small chunk of their earnings towards their children’s living costs at uni.
In this sense, you might call it an optional ‘send your child to uni tax’, as parents are expected to contribute a certain amount of their income depending on how much they earn.
Maintenance Loan calculator
Our calculator tool shows how much your parents are expected to give you at university.
Issues with how Maintenance Loans are calculated
We frequently ask students how they feel about the way Maintenance Loans are assessed and dished out, and the general consensus is always the same.
Many of you consider the model to be outdated and not appropriate for contemporary living situations – a particular example being that if parents divorce and remarry, a new partner’s income is also included in the household income assessment, despite the step-parent having no financial obligation and the child potentially receiving no money from them.
And, it’s often pointed out that it’s extremely presumptuous for the government to assume that, even at the age of 24, a student can be (or would even want to be) financially dependent on their parents in any way.
The minimum parental earning threshold of £25,000 has also been stagnant for a long time. The result of this is that, over time, fewer and fewer students will be receiving the maximum loan from the government as salaries tend to increase in line with inflation.
While there is the worry that the overall financial package on offer won’t be any greater, grants could hopefully ease the psychological barrier to entry for the most debt-averse students who are concerned about repayments. You can keep an eye on our news page for updates.
Still struggling to piece together the riddle that is Student Finance? Check out our complete guide for everything you need to know.