The poor get stuffed for Christmas

December 20, 2000

Some mature students are so poor that their children will go without presents this Christmas, according to an explosive report into student finances commissioned by the government.

Lone parents, who decide to go to university to improve their employment chances and so better provide for their children, are identified as the most financially vulnerable students in the report published today.

The report is a 3-page study of student income, expenditure, and take-up of loans in the years up to and including 1998-99 when the government introduced tuition fees and started to phase out maintenance grants.

It was commissioned by the Department for Education and Employment, yet many of the findings seriously undermine the government’s own student funding policies.

Detailed analysis by authors Claire Callender and Martin Kemp, of South Bank University, leads to the observation that the government’s student funding policies may actually deter poorer people from university. Yet, the authors observe, poorer people are the very focus of the government’s widening participation policies.

Owain James, president of the National Union of Students, said: “The DFEE’s survey is a damning indictment of the government’s own student funding system. This survey was carried out before the abolition of the maintenance grant and so the picture today is likely to be much worse. What more evidence does the government need? The government must act now to return maintenance grants to those from the poorest backgrounds as already enjoyed by Scottish students.”

Three out of five full-time students said that the 1998 changes to student funding had deterred some of their friends from going to university, according to the report. Findings were based on face-to-face interviews with a representative sample of 2,054 full-time students and 747 part-timers.

Nearly nine out of ten full-time (76 per cent of part-time) students surveyed said they had experienced some financial hardship under the new policy of tuition fees and increased student loans. Nearly two-thirds of full-time (40 per cent of part-time) students thought that financial difficulties had a negative impact on their studies.

The study found that the poorest students were forced to borrow the most money through the student loans scheme, against their future earnings, and yet that this group were also the most debt-averse. Students, particularly lone parents, were also running up higher debts on credit cards and hire purchase.

Overall, students were borrowing more and were working longer hours - with the poorest students working the longest hours - in paid employment during term-time. As a result, student incomes grew between 1995-96 and 1998-99 but this is accounted for largely by student loan borrowings (which roughly doubled in this period).

At the same time, maintenance grant income fell by 30 per cent on average and parental contributions to maintenance fell by 17 per cent.

The authors suggest there is a link between debt aversion among the poorest students and a deterrent effect on them. The report also establishes a link between the financial hardship experienced by poorer students and dropping out of university.

Over a quarter of lone parents were forced to cut spending on toys, childrens’ books and entertainment. Over a fifth were forced to economise on their childrens’ clothing and six per cent were even driven to limit the amount spent on school lunches. Lone parents were more likely to take out commercial loans to cover bills, leading to multiple debts.

Liberal Democrat higher education spokesman Evan Harris said: “The government’s own report proves conclusively that their own policy has been counterproductive. It is another nail in the coffin for its grant-cutting, fee-raising approach.”

Baroness Warwick, chief executive of Universities UK (formerly the Committee of Vice-Chancellors and Principals), said: “If fear of debt is one of the factors deterring such applications [from poorer students] we will address this issue urgently as part of our current funding review.”

UUK is carrying out its own research into student finances which will include an investigation into perceptions of student debt among people intending to go to university. It too has appointed Professor Callender to carry out the research along with a team led by John Brennan, director of the Centre for Higher Education Research and Information, based at the Open University.

Higher education minister Baroness Blackstone focussed on one of the few positive aspects in the report, which was the rise in student incomes between 1995-96 and 1998-99.

The minister conceded that students who are parents experience financial hardship. She referred to the new childcare grants, opportunity bursaries to be introduced next year and further targeted support for mature students.

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