Student finances – always one of the great personal mysteries for me. I’ve long wondered how students manage with the finances that they get given by Student Loans Company (SLC), especially when you’ve got to consider the expenses that you need to fork out over the course of the academic year.
OK, so you don’t have to actually fork out for the tuition fees itself, but here’s a rough guide to what you might have to consider:
- Food bills
- Utilities (depends on your accommodation)
- Course materials – ranging from textbooks to design material and textiles, this will depend on your course
- Sports/societies fees
- Going out/social life
Naturally, there’ll be a few others that I’ve missed off the list – I guess that only adds to the point I’m trying to make here…
You’d think that, with all those various challenges and expenses, students up and down the nation wouldn’t have an issue. After all, with all of that, the system would be efficient. You don’t want the system to fail, do you?
I’m somewhat doubtful of that – constant claims of late payments and unnecessary bureaucracy dog the system almost every day it seems – I’ve written about this in the past and it would appear that very little seems to have changed since then. In April I wrote about the fact that students were having to turn to food banks to ensure that they had enough food to get through until the loans got paid.
The SLC responded at the time and denied that no payments were ever sent late. I didn’t believe it then and, having spoken to some people here at university, I still don’t believe it now. Reports of delays in payments are indeed rife – if the money isn’t late, it’s because SLC is frequently slow to confirm what evidence is required from students in order to ensure applications and assessed correctly. Convenient that.
So if the loans aren’t covering the expenses and, even if they did, they arrive late and inefficiently… what else can students do?
Last year the National Union of Students (NUS) backed the campaign to ban Pay-day loan companies from advertising on campuses up and down the nation. It’s something I certainly backed all the way – it seems highly exploitive of such companies to prey on financial issues and concerns that students might have.
It would seem that such a potential ban doesn’t seem to have had enough of an effect on students…
A survey conducted by the NUS in partnership with student accommodation company Unite Students found that 2% of students had used either a Pay-day loan or ‘doorstep cash’ to help fund their university experience. Although the survey size was only 1,700 students, if you are to extrapolate the data, the estimate for the entire country would be some 47,000 undergraduates. Not what you want to hear.
It’s a rather painful reality that students feel the need to take on such measures – especially those which really aren’t designed for students or those without a regular income. Pay-day loans are really not the way forward for students in times of need – when you’re only being paid three times an academic year from SLC the interest can rack up dangerously quickly, thus increasing the amount of money that you have to repay back. We’re talking over 350% APR at times.
To make matters worse, an investigation carried out by the Competition and Markets Authority into the pay-day loans market determined there was very little competition over prices in the market, meaning that consumers are potentially paying out too much in interest. According to their estimates, if you take out a £260 loan for three weeks, the lack of competition is causing an extra £5-£10 in repayments.
Not only are students likely to be borrowing more to see out terms – rent and living all have to be considered – but they’re also going to be taking it out for longer periods of time than three weeks in all likelihood… The loss is even greater. This is really not something you want to get involved in.
Colum McGuire, the NUS Vice-President for Welfare went on record as saying that “our research has proven this to be a live and growing issue for students.”
Indeed, the report in which these survey results were published states that “anticipating the need to turn to high interest debt solutions suggests that, for a small proportion of respondents, all other avenues of funding will either not be approached or do not cover student’s financial requirements.”
To put that into simple terms: there are students out there who’s loans do not cover their basic needs. Yes, there are students who can rely on their parents to help fill the void but I think to be realistic we can’t expect every parent out there to fill the gaps caused by underfunding. It’s also quite lucky that some students get bursaries to head off to university, but obviously this is for a relatively small proportion of students.
The maintenance grant? Well that does help students in need, but seeing as the government is quite content to either freeze the amount or start cutting support in other areas, I can’t see that being the most stable of solutions in the near future. Meanwhile, the National Scholarship Fund gets squandered on Master’s Degree students, rather than those who actually can’t afford to head off to university.
Last year I wrote about budgeting for university and how to make ends meet. I have also, sadly, had to report on students heading off to food banks and the like to make sure they can afford to feed themselves.
I always suspected that some students were tempted into pay-day loans to help cover bills. I didn’t realise that it would be such a figure. It also seems that, despite repeated calls to sort the system out and create an even playing field for students, the government seems willing to stand back and ignore the needs of those. Before too long, universities will be running at a loss and students will go elsewhere. Simple as that, I’m afraid.