The Student Loans and Maintenance Grants Shake Up- Unconstitutional, Unethical, and Uneconomical

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Recent months have seen the student loans system gain mass media coverage because of government plans to ‘shake up’ the system. These initiatives include: scrapping maintenance grants, freezing the repayment threshold, and removing NHS bursaries in replace of a loan system. Not surprising these policies have been received by many students (and potential students) with a whole load of anger and dismay about how the government could act in this kind of manner.

Not only are students angry at these changes, it has attracted attention from money saving expert Martin Lewis, who has recently written an open letter to David Cameron explaining these actions are without a doubt unethical- if not illegal in their means.

So what exactly is happening? Why is everyone getting so tense? How does it affect students? Well, these changes in the system are actually ridiculous from an ethical, constitutional, and economical standpoint.

The Scrapping of Maintenance Grants

Scrapping the maintenance grants has received considerable media attention, since the intention was formally announced in July. It has seen a revival this past week in media attention over intentions to scrap the maintenance grant without even a debate in the House of Commons- with many branding this as ‘unethical’, ‘unconstitutional’, and even ‘sly’ as the Tories move to hurt the poor without even allowing opposition to prevail.

So what does this mean? Essentially students whose parents earn less than £42,670 are entitled to some form of student grant as a contribution towards their living costs- this grant is non-repayable, and the poorest students (whose parents earn less than £25,000) can receive a substantial £3,387 a year to help with their living costs.

I am one of these students who do receive the maximum amount of money in the maintenance grant. I am not from the richest family in the world, I went to one of the poorest rural schools in England where GCSE attainment was only at 50%, and my parents cannot contribute towards my living at University – meaning I’ve always worked part time ever since the age of 13.

Now from my point of view this does look like to me an attack on the poorest- yet brightest students. I have no doubt that many future students who have educational backgrounds like myself will be seriously doubting whether it is even worth attending university because of the crippling debt they face. It is estimated that those future students like myself, will have to pay back an extra £12,500 in debt compared to their slightly richer counterparts- a move which is absolutely atrocious.

However, to all those who come from similar circumstances like myself, I would urge you not to disband your dreams of attaining a degree because of this measure. Although maintenance grants will be scrapped- there is a high chance you will never pay off the full amount of ‘debt’ anyway. I would urge you to think of this as like an ‘educational tax’, not a debt. You still only pay of 9% a year (over the £21,000 limit), meaning there is a very high chance you will never pay of the debt anyway. It is estimated from some sources that under these new conditions, only a quarter of the poorest students will pay off these debts- meaning many will get wiped after 30 years.

The more controversial issue surrounding the scrapping the maintenance grant is the fact that the government plans to do this without putting the motion through the commons.

The legislation can be passed through without opposition, which has caused mass revulsion- especially from the NUS. If the move had been done through primary legislation, it would have meant there would have been significant debate around the issue- with the House of Lords having the chance to veto the legislation (like they did with the tax credit legislation). As this is not being put through as primary legislation (despite being really significant), it means the Tories can simply end student grants without consultation- a move which I find disturbing, unconstitutional, and unethical.

Whatever your view on the scrapping of the maintenance grants- I’m sure you will share my concerns that legislation this significant needs to be addressed through debate and the chance for other members of parliament to oppose the bill. This move represents to me a worrying trend which could be potentially developed, undermining our whole system of ‘representative democracy’.

Changes to Student Loans- Freezing of Repayments

In November, George Osborne announced that the repayments for student loans would be frozen for 5 years and would include students who have already taken out their loans. Again, not surprisingly this has received similar disgust by students as the scrapping of maintenance grants. It essentially means that middle and low earning graduates will pay back thousands more in repayments as the income threshold does not rise with inflation.

Controversy has emerged, especially from Martin Lewis (money saving expert), who thinks that this decision is highly unethical, as it is changing the terms of the loan for current students- who have already taken out this contract. In other words it would be like taking out a fixed rate mortgage for a house which is £150,000, signing the contract and paying £600 a month for the house for 2 years, only to be told that as of next month for the foreseeable future you need to pay £800 a month. Legally this could not happen to you as the contract has already been agreed by both parties- so questions have appeared as to why the government are allowed to do this to students?

Martin Lewis has recently published his open letter to David Cameron. In it Lewis urges the government to reconsider their plans, stating he has already hired lawyers to look specifically at this issue, and insists that the move is ‘bad governance’.

The rise in tuition fees from 2012 has already caused students to be distrustful of the government. However, this issue of changing loan contracts after the contracts have been agreed by all parties will further misplace faith in the government. I have no doubt that this will have an impact on already low student voter turnout- as this move may make students even more skeptical about voting, which will only mean that future governments can justify further exploitation of students over the loans issues.

In essence, although it looks like the government are targeting students with their legislation plans- keep voting in order to make sure future generations and student loans are not jeopardized further with future respective governments.

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I am a second year Modern History and Politics student.

Discussion2 Comments

  1. avatar

    Good article raising a lot of points. I went to a school with about 45% GCSE attainment and still one of the best schools in my hometown, it does impact people a lot if they get the wrong message, regardless of how finance and repayments actually work, which is essentially as a graduate tax.

    One thing though, I know a lot of people wanted it debated in the Commons but surely it makes little difference given that it doesn’t require a law to be passed and the government has a majority and extremely ineffective opposition there?

  2. avatar
    Maddy Ell

    The point of this article was to highlight that although it might have been pointless debating it through the commons because of the conservative majority, at least the opposition would have had a say in trying to dissuade MP’s from putting through the motion. In addition a lot of sources I have read have stated that the Tory government have deliberately not put these legislatures through the commons because of the ‘bad press’ they might receive. My article portrays the important point that it doesn’t matter if you have a majority within government, if you are going to push through a controversial piece of legislation you must do so by putting it through the commons first, so you are less likely to be called ‘sly’, cause mass distrust, or even be deemed as ‘unconstitutional’.

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