New 2016/17 student loans and benefits
Angela Toal explains two changes to English student funding for advanced level courses from the 2016/17 academic year, and how the new funding affects social security benefits.
The student funding changes are introduced by the Education (Student Support) (Amendment) Regulations 2015, No.1951.
In force from 4 August 2016, the Social Security (Treatment of Postgraduate Master’s Degree Loans and Special Support Loans) (Amendment) Regulations 2016, No.743 sets out how the new funding is treated for means-tested benefits. There is further information in various DWP memos.1
The special support loan
For students commencing a higher education course in the 2016/17 academic year or later (‘2016 cohort students’), an increased rate of student loan is available. This change is part of the government’s plans ‘to reduce the deficit, maintain the financial sustainability of the higher education sector and ensure that access to finance is not a barrier to participation in higher education.’2
A special support grant has been available over the past few years to students who are eligible for means-tested benefits (mainly parent students and students with a disability). 2016 cohort students cannot get a special support grant, but may instead get a special support loan. The special support loan is for people who would be entitled to means-tested benefits while studying and is a maximum amount of £3,469 in 2016/17. It is paid in addition to the maintenance loan for students eligible for benefits (which, for students entitled to benefits, living outside London, is a maximum of £5,878 in 2016/17).
Impact on social security benefits
Like the special support grant it replaces, the special support loan of £3,469 is disregarded for means-tested benefits. The maintenance loan of £5,878 (for students outside London) counts in full as income, as always.
Carla is starting her first year university in autumn 2016. She has one child aged six and is claiming housing benefit as a lone parent. She gets a student loan for living costs of £5,878 and a special support loan of £3,469.
The student loan for living costs counts in full and the special support loan is disregarded. The weekly loan income taken into account is:
|Less disregards for books and equipment and travel (£693) =||£5,185|
|Divided by 42 weeks =||£123.45|
|Less £10 weekly loan disregard =||£113.45|
£113.45 is taken into account as weekly income from her loan during the academic year 2016/17.
Note that this loan would also be taken into account for universal credit under the normal rules.
Postgraduate student loans
New postgraduate masters degree students fromautumn 2016 are eligible for a postgraduate loan of up to £10,000. It is available for full-time (one-year) or part-time (two-year) courses. It is notspecifiedwhatthisloanisfor(eg, feesorliving costs) and students can use it as they see fit.
Impact on social security benefits
A proportion of the loan – 70 per cent – is disregarded, as this equates roughly to the amount of fees that might be payable. The other 30 per cent of the loan counts as income for social security benefits. This is the case even if the course costs more than £7,000. The amount taken into account is 30 per cent of the maximum loan available to the student. In addition, if a student decides not to take out the loan (or takes out less than the full amount s/he can), s/he will be assumed to possess the maximum loan to which s/he would be entitled.
June is a lone parent with a 10-year-old child. She starts a one-year full-time postgraduate masters degree in autumn 2016 and takes out the maximum loan of £10,000. She is claiming universal credit. Her course runs from September 2016 until July 2017.
The weekly loan income taken into account is:
30% of the £10,000 loan =
|Divided by 10 (the number of assessment periods from the month in which she starts the course to the month before the course ends)||£300|
|Less £110 disregard per assessment period =||£190|
£190 is taken into account in her universal credit calculation as monthly income from her loan during the course.
Work-related requirements and universal credit
A further provision amends the universal credit (UC) regulations governing work-related requirements. Ordinarily, students eligible for UC and receiving student income which is taken into account for their UC award have no work-related requirements.3 However where a student is not a full-time student, and s/he is in receipt of a postgraduate masters degree loan, s/he is treated as if s/he does not have student income. In this case, receipt of student income does not therefore exempt her/him from work-related requirements, and depending on her/his circumstances s/he may have work-related requirements to meet.
Dan is a part-time postgraduate masters degree student, in receipt of the £10,000 postgraduate masters degree loan. He gets UC. He is not exempt from work-related requirements and is expected to undertake work search and be available for work, in addition to undertaking his course.
Malcolm is a full-time postgraduate masters degree student, in receipt of the £10,000 post-graduate masters degree loan. He gets UC because he is responsible for his 15-year-old son. Three thousandpounds ofthe loan counts as income during the academic year, and during this period he has no work-related requirements. Three thousand pounds ofthe loan counts as income during the academic year, and during this period he has no work-related requirements.
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- 1. Memos DMG 19/16, available at www.gov.uk/government/publications/decision-makers-guide-memos-staff-gui..., and ADM 20/16, available at www.gov.uk/government/publications/advice-for-decision-making-staff-guid..., and HB G8/2016, available at www.gov.uk/government/ publications/hb-bulletin-g82016
- 2. Explanatory Memorandum to SI 2015 No.1951
- 3. Reg 89 Universal Credit Regulations 2013, No.376