How much the Govt expects you to give your children for university

Update Note 04 June 2018: The ready reckoners below have been updated with the new 2018/2019 living loan amounts.

Also since first writing this blog, and seeing the strength of feeling it attracted, I have written an open letter to the Uni Minister asking him to start telling people about this. Yet sadly received his no we won’t tell them response..

Plus for those with wider questions about student finance, remember this blog is just on one element, please read my full 20+ student loan mythbusting guide for full help.

The new university term will soon start and millions of supposedly independent students will be heading off. In fact, though the system doesn’t say students are independent, the system incorporates an expected ‘parental contribution’ to their finances. Yet this is never made explicit, so I’ve worked out ready reckoners to help parents calculate it.

While almost every student is 18 or over and able to vote, for most going straight from school to uni the amount of loan they get for living (the maintenance loan) is dictated by their parents’ income, not their own.

Many don’t get the full loan. And parents are meant to fill the gap. But nowhere in the main Student Loans Company (SLC) communications (as far as I can see) does it say this.

The only place I can find it is in the SLC’s ‘How you’re assessed guide’, which students are meant to read when they apply for a loan. There it just says “depending on their income, parents may have to contribute towards the living costs of their student children”. Well that’s helpful!

What’s needed is a far more accurate, helpful, loud and large…

“Students – your loan for living is £x,xxx a year, this is less than the full loan and we expect your parents to make up at least the £x,xxx difference.”

This currently goes unsaid, but it needs saying. Many parents I meet – for example at my TV roadshows – either don’t realise they’re supposed to contribute, or see it as a loose amount.

In fact, parents and students often complain to me that “the living loan isn’t enough to cover their rent, never mind living costs – I have to give them extra”. However, when I question them, it’s often parents whose offspring don’t get the full loan saying this – the ‘extra’ is actually the gap.

Of course, even with the full living loan, many will struggle (see my Living loans aren’t large enough blog) – and that too is an important, though separate, debate. It’s also a reason that in my ready reckoners below I call this the ‘minimum’ parental contribution, as more is usefully needed.

For full info on how the student finance system works, see my 20+ student loan mythbusters guide.

There’s no way parents can be forced to contribute

A further problem here is students are assessed on parental income but have no way to force their parents to contribute – which does seem an unfair position to put students in. Either their finances should be separate or they should have some ability to be able to force parents to comply.

In fact, the only option for students whose parents won’t contribute is they can apply for the full loan amount as long as they can prove they’ve been financially independent for the past three years – ie, they had a full-time job and were living off that money.

Parents may be supposed to help with living costs but the loan is the student’s

I wanted to make this point before carrying on and talking the numbers.

Many parents panic about their children being in hideous debt after university, especially if they won’t earn much. If you’re thinking that, then I strongly suggest you read my 20+ student loan mythbusters before carrying on.

Actually, student loan repayments work far more like a tax than a loan (I actually believe it’d do a lot of good if we stop calling student loans a debt!). Here’s why…

They don’t go on credit files.
They’re repaid through the PAYE payroll.
You only repay 9% of everything above £25,000, regardless of how much you borrowed, so it’s proportionate to income.
If your income drops so does the repayment.
Most will repay for 30 years, then it stops.

In many ways, financially it’s a no win, no fee education.

Funnily enough the real issue is that student loans aren’t big enough – as the living loan, even with the full parental contribution, is a struggle to manage with. So it’s far better to help them with that.

As for repaying the loan, most parents wouldn’t help their child if they earned enough to pay more tax, and that’s really what paying their loan for them means. For more on this, see my beware paying tuition fees upfront guide.

My minimum parental contribution ready reckoners

So I’ve decided to do something about this mismatch of info and expectation. My parental ready reckoners are below, which show the minimum parents should contribute.

All I’ve done is calculate the maximum award from the state and subtract the actual award received. This is done via an assessments of parents’ residual income (explained in full in point 10 of the student loan mythbusters guide).

If parents then give what’s listed, their offspring will be in the same position as someone from a lower income background getting the full loan.

There are two sets of ready reckoners for this 2018/2019 academic year coming…

The figures are for full-time English non-‘independent’ students who started their course in or after the 2017/18 academic year. They don’t include any extra funds for students with dependents, disabilities or if you’re studying an NHS degree. And it assumes you have no other dependent siblings that your parents may also be supporting (which means the parental income is counted as being slightly lower in the assessment).

Academic year 2018/19 for NEW students and for continuing students not in their final year

For those who started university in September 2016 or later, the maths is easier. Simply subtract the amount of loan your child gets from the full award amount, to get the expected parental contribution.

PS: To see why the removal of the student grant isn’t as bad financially as portrayed, see my
Scrapping of student grants blog.

Ready Reckoner 1: For students living at home with parents
The FULL LOAN AWARD is £7,324, so subtract the loan you actually receive from this and then the difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a student loan of… And therefore the min parental contribution is…
< £25k £7,324 £0
£30k £6,707 £617
£35k £6,090 £1,234
£40k £5,473 £1,851
£45k £4,855 £2,469
£50k £4,238 £3,086
£55k £3,621 £3,703
£58,215+ £3,224 £4,100
Ready Reckoner 2: For students living away from home studying outside London
The FULL LOAN AWARD is £8,700, so subtract the loan you actually receive from this and then the difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a student loan of… And therefore the min parental contribution is…
< £25k £8,700 £0
£30k £7,825 £624
£35k £7,452 £1,248
£40k £6,828 £1,872
£45k £6,204 £2,496
£50k £5,579 £3,121
£55k £4,955 £3,745
£60k £4,331 £4,369
£62,187+ £4,054 £4,646
Ready Reckoner 3: For students living away from home studying in London
The FULL LOAN AWARD is £11,354, so subtract the loan you actually receive from this and then the difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a student loan of… And therefore the min parental contribution is…
< £25k £11,354 £0
£30k £10,719 £635
£35k £10,084 £1,270
£40k £9,449 £1,905
£45k £8,813 £2,541
£50k £8,178 £3,176
£55k £7,543 £3,811
£60k £6,907 £4,447
£65k £6,272 £5,082
£69,847+ £5,654 £5,700

Academic year 2018/19 for CONTINUING students who started pre-2016 academic year

Those who started university before September 2016 may be eligible for non-repayable grants instead of the full student loan amount. Therefore I’ve defined the maximum award as the total of the grant and loan. That is somewhat controversial, as some, including the Student Loans Company, see the grant as ‘extra on top’. However I believe this is what creates a level playing field for students.

If you disagree then just take the maximum loan figure from the table as your start point.

What to do:
Just total any loan and grant received, then subtract that from the full award figure listed below. The ready reckoners give examples at various values.

Ready Reckoner 1: For students living at home with parents
The FULL LOAN & GRANT AWARD is £6,757, so add up the loan and any grant received, then subtract that from this. The difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a grant of… Plus a student loan of… So the total award is… And therefore the min parental contribution based on the full award is… And therefore the min parental contribution based on the loan only is…
< £25k £3,593 £3,164 £6,757 £0 £0
£30k £2,589 £3,666 £6,255 £502 £0
£35k £1,585 £4,168 £5,251 £1,004 £0
£40k £581 £4,670 £5,251 £1,506 £0
£42,645 £50 £4,935

£4,985

£1,772 £0
£42,875 £0 £4,960 £4,960 £1,797

£0

£45k £0 £4,720 £4,720 £2,037 £240
£50k £0 £4,155 £4,155 £2,602 £805
£55k £0 £3,589 £3,589 £3,168 £1,371
£58,222 £0 £3,224 £3,224 £3,533

£1,736

Ready Reckoner 2: For students living away from home studying outside London
The FULL LOAN & GRANT AWARD is £8,033, so add up the loan and any grant received, then subtract that from this. The difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a grant of… Plus a student loan of… So the total award is… And therefore the min parental contribution based on the full award is… And therefore the min parental contribution based on the loan only is…
< £25k £3,593 £4,440 £8,033 £0 £0
£30k £2,589 £4,942

£7,531

£502

£0
£35k £1,585

£5,444

£7,029 £1,004 £0
£40k £581 £5,946 £6,527 £1,506 £0
£42,645 £50 £6,211 £6,261 £1,772 £0
£42,875 £0 £6,236

£6,236

£1,797 £0
£45k £0 £5,996 £5,996 £2,037 £240
£50k £0 £5,431 £5,431

£2,602

£805
£55k £0 £4,865 £4,865 £3,168 £1,371
£60k £0 £4,299 £4,299 £3,734 £1,937
£62,147+ £0 £4,056 £4,056 £4,177 £2,180
Ready Reckoner 3: For students living away from home studying inside London
The FULL LOAN & GRANT AWARD is £10,499, so add up the loan and any grant received, then subtract that from this. The difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a grant of… Plus a student loan of… So the total award is… And therefore the min parental contribution based on the full award is… And therefore the min parental contribution based on the loan only is…
< £25k

£3,593

£6,906 £10,499 £0 £0
£30k £2,589 £7,408

£9,997

£502 £0
£35k £1,585 £7,910 £9,495 £1,004 £0
£40k £581

£8,412

£8,993

£1,506

£0
£42,620 £50 £8,677 £8,727 £1,772 £0
£42,875 £0 £8,432 £8,702 £1,797 £0
£45k £0 £8,462 £8,462

£2,037

£240
£50k £0 £7,897 £7,897 £2,602 £805
£55k £0 £7,331 £7,331 £3,168 £1,371
£60k £0 £6,765 £6,765 £3,734 £1,937
£65k £0 £6,200 £6,200 £4,299 £2,502
£69,802+ £0 £5,656 £5,656 £4,843 £3,046

Academic year 2018/19 for CONTINUING students in their FINAL year of study

Those who started university before September 2016, and are in their final year of study may be eligible for non-repayable grants instead of the full student loan amount. Therefore I’ve defined the maximum award as the total of the grant and loan. That is somewhat controversial, as some, including the Student Loans Company, see the grant as ‘extra on top’. However I believe this is what creates a level playing field for students.

If you disagree then just take the maximum loan figure from the table as your start point.

What to do:
Just total any loan and grant received, then subtract that from the full award figure listed below. The ready reckoners give examples at various values.

Ready Reckoner 1: For students living at home with parents
The FULL LOAN & GRANT AWARD is £6,757, so add up the loan and any grant received, then subtract that from this. The difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a grant of… Plus a student loan of… So the total award is… And therefore the min parental contribution based on the full award is… And therefore the min parental contribution based on the loan only is…
< £25k £3,482 £3,164 £6,757 £0 £0
£30k £2,589 £3,666 £6,255 £502 £0
£35k £1,585 £4,168 £5,753 £1,004 £0
£40k £581 £4,670 £5,251 £1,506 £0
£42,641 £50 £4,935 £4,985 £1,772 £0
£42,875 £0 £4,960 £4,960 £1,797 £0
£45k £0 £4,720 £4,720 £2,037 £240
£50k £0 £4,155 £4,155 £2,522 £805
£55k £0 £3,589 £3,589 £3,168 £1,371
£58,222 £0 £3,224 £3,224 £3,533 £1,736
Ready Reckoner 2: For students living away from home studying outside London
The FULL LOAN & GRANT AWARD is £8,033, so add up the loan and any grant received, then subtract that from this. The difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a grant of… Plus a student loan of… So the total award is… And therefore the min parental contribution based on the full award is… And therefore the min parental contribution based on the loan only is…
< £25k £3,593 £4,440 £8,033 £0 £0
£30k £2,589 £4,942 £7,531 £502 £0
£35k £1,585 £5,444 £7,029 £1,004 £0
£40k £581 £5,946 £6,527 £1,506 £0
£42,641 £50 £6,211 £6,261 £1,772 £0
£42,875 £0 £6,236 £6,236 £1,797 £0
£45k £0 £5,996 £5,996 £2,237 £240
£50k £0 £5,431 £5,431 £2,602 £805
£55k £0 £4,865 £4,865 £3,168 £1,371
£62,147+ £0 £4,056 £4,056 £3,977 £1,937
Ready Reckoner 3: For students living away from home studying inside London
The FULL LOAN & GRANT AWARD is £10,499, so add up the loan and any grant received, then subtract that from this. The difference is the parental contribution. Here are examples of how it works at different income levels.
A family with household income of… Will get a grant of… Plus a student loan of… So the total award is… And therefore the min parental contribution based on the full award is… And therefore the min parental contribution based on the loan only is…
< £25k £3,593 £6,906 £10,499 £0 £0
£30k £2,589 £7,408 £9,997 £502 £0
£35k £1,585 £7,910 £9,495 £1,004 £0
£40k £581 £8,412 £8,993 £1,506 £0
£42,641 £50 £8,677 £8,727 £1,716 £0
£42,875 £0 £8,702 £8,702 £1,797 £0
£45k £0 £8,462 £8,462 £2,037 £240
£50k £0 £7,897 £7,897 £2,602 £805
£55k £0 £7,331 £7,331 £3,168 £1,371
£60k £0 £6,765 £6,765 £3,734 £1,937
£65k £0 £6,200 £6,200 £4,299 £2,502
£69,802 £0 £5,656 £5,656 £4,843 £3,046

I hope this blog is useful. Please let me know your thoughts below.

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