Tuesday, 16 January 2018

For the lovely commuter on the train today, here is a quick link to..... 

Bank-rupt of Mum & Dad 

.......nice to natter and best wishes to your daughter as she starts her exciting journey into Higher Education 

Monday, 16 October 2017

Levitate Student: Exceptions that prove the rule

The exception that proves the rule.......

Whatever the often disputed meaning of the phrase the “exception that proves the rule” there are many money rules to which some students find themselves frustratingly excepted. Here are just a few examples.

When can the repayment terms on a loan change after you have signed the agreement?

When you are a student of course!

Back in the crazy coalition days, (when let’s be honest much politicking was shrouded in an illusion of compromise) the Government increased the higher education tuition fees in England to £9,000 for the 2012 cohort of higher education students.

Keen eyed Student Money Advisers led in a taskforce by Martin Lewis spotted new caveats added to the student support regulations about the government being able to change the funding rules at any time. Worries began to creep in about the reassurances those supporting the taskforce were offering new students regarding affordability and repayments of student loans

Vince Cable the then Secretary for Department of Business Innovation and Skill announced a new higher loan repayment threshold, increased from a post study income of £15,000 to £21,000 per year for the 2012 cohort. This meant a student under the 2012 system could earn more before having to start repaying their loan.

‘As announced on 3 November, that income threshold will be £21,000 as from 2016, compared with the current threshold of £15,000. Our modelling to date has assumed that that threshold should be uprated every five years in line with earnings. In order to give better protection for those on lower incomes, we now propose that the uprating should instead be made every year. Around a quarter of graduates will be better off in this new, more progressive regime than under the current regime.’

Similarly from the Department for Business, Innovation and Skills document FAQs regarding the 2012 student finance changes published in 2011:

Q I’m worried that I’m going to be saddled with a lifetime of debt as a result of the changes
A You don’t have to pay anything back until you are earning more than £21,000 a year. The £21,000 earnings threshold will be increased

Sounded great. Yet worries were voiced that the return on the new system of funding might not bring enough monies back into the public purse to be cost effective. These worries were dismissed by the Department for Business Innovation and Skills.

Fast forward to Chancellor Mr George Osborne’s Autumn Statement 2015. Buried in the text he had this to say regarding a Freeze to the Student Loan Repayment Threshold:

2.76 To reduce government debt, the student loan repayment threshold for Plan 2 borrowers will be frozen until April 2021. The discount rate applied to student loans will be revised to 0.7% above RPI, to bring it into line with the government’s long-term cost of borrowing. Taken together, this will reduce the government’s estimate of the long-term student loans subsidy to around 30%

This was unprecedented, changing the repayment terms once a student has already signed up to the system!

The government consulted on the “Freezing the student loan repayment threshold” and only 5% of the respondents were "for" the proposal of   “Keeping the threshold of £21,000 the same for all post-2012 borrowers until April 2021”, yet the Chancellor still implemented the freeze.

Martin Lewis was not happy - writing an open letter to the Prime Minister and promising to fund some students to take the matter to judicial review . Alex True, an affected student, successfully petitioned for the matter to be debated in parliament. All, in the end, to no avail.

Substantive changes had historically only affected new cohorts of students, so at least the prospective students had opportunity to make an informed choice before signing up to the system. Given the student loans have a 30 year repayment term, the potential for future changes to the loan T&C’s are rather worrying.

What commercial lender could get away with such practices?

When is paying rent just an illusion?

When you are a student of course......
Most full-time Higher Education students are not entitled to claim housing benefit. This may seem strange when for many students their income is certainly low enough to render them eligible. 
The law gets around the problem by defining who is regarded as “liable to make payments in respect of a dwelling” for the purposes of housing benefit entitlement – and guess what? - Full-time students are not regarded as eligible to pay rent.....even though of course they mostly all do. There are some exceptions, but for the vast majority of single students without children or disability, paying rent is just an illusion.

When doesn’t every child matter?

When you have an ambition to move on to higher education but you don’t satisfy the residency requirements.

The residency rules are complex and it’s common for young people to get caught up in their complexities.

There are young people who have live in the UK for nearly all their lives, may pass through the entire UK schooling system but at 18, when they are excited at the prospect of university, are prevented from doing so by the robust residency requirements. Often they have never had their expectations managed that this might happen to them.

I have supported a number of academically brilliant young people in this situation. It is not uncommon for the young person to be unaware of the full story of how they arrived in the UK. For example a student who had been illegally trafficked into the UK at the age of 8, spent time in local authority care and yet succeeded against the odds to do well at school. Ten years on, by aged 18, their immigration status was not settled by the Home Office. They failed to satisfy the required residency requirements that would allow them to be funded at university.

A welcome tweak to the relevant regulations was eventually applied in June 2016, acknowledging this as a concerning issue, by introducing a funding eligibility category based on long residence. While it isn’t a catch all, it does help.
“Long Residence 13.—(1) A person who on the first day of the first academic year of the course— 
(a)       is either— 

(i) under the age of 18 and has lived in the United Kingdom throughout the seven-year period preceding the first day of the first academic year of the course; or 

(ii) aged 18 years old or above and, preceding the first day of the first academic year of the course, has lived in the United Kingdom throughout either— (aa) half their life; or (bb) a period of twenty-years; 

When your parents are British Citizens, work for the UK government and pay tax in UK? You can get funding right?


Imagine this scenario – you are 18, your parents are British Citizens who work as civil servants for the British Forces in, for example, Cyprus. They have worked all your life outside the UK supporting the armed forces personnel overseas. They are employed by the UK government and pay their taxes to the UK. You have always lived with them at residencies with British Forces Post Office addresses. You apply for funding to go to university in your parents hometown, in the UK, where your Grandma lives, you would be eligible right?

Unfortunately, it aint necessarily so. If the student themselves was born outside of the UK and the number of years the family has spent outside the UK is not deemed as a temporary absence, then funding could be refused.

Serving forces personnel and their children are exempted from this but not so their Civil Service colleagues including teachers working in British Forces schools. This means the children of these teachers, studying in schools for forces personnel, could be ineligible for funding to attend a UK university while their classmate, the child of a soldier, would be eligible.

When is your partner not your partner?

When you are a student under the age of 25 years......

Imagine you are 20 years old and you have been living with your partner since you were both 16 years old. When you apply for welfare benefits you are regarded as a couple. 

When you become a full-time student the DWP and the benefit agencies take into account some of your student income which impacts the means-tested benefit you and your partner are entitled to. Fair enough.

You apply to Student Finance England for the Adult Dependent Grant but are told for the purpose of this grant that as you are under 25 years of age, your partner is not your partner. Even though they are your partner when it comes to Job Seekers Allowance or Universal Credit entitlement. Even though they would be considered your partner by Student Finance England if you were over 25.

As a couple you will lose out on Adult Dependant Grant income simply by virtue of your age. The non-student partner will lose access to means-tested welfare benefit income for themselves.  

When is your financially dependent partner not “an adult who financially depends upon” you?

When they are also a student who is also awarded statutory student finance.

Which may seem fair enough until you consider a scenario like this.

Imagine you are a full-time higher education student aged over 25 years. Prior to starting your course you and your wife claimed Job Seekers allowance as a couple. When you start your course you are entitled to student loan for your fees and living costs, and adult dependent’s grant as your wife has now lost access to Job Seekers allowance - due to your student income.

Your wife decides to take a further education course to improve her chances of finding work. She accesses the Advance Learner Loan to help pay for her tuition fees. She isn’t entitled to any living cost help. Imagine your surprise then when Student Finance England advise that you are no longer entitled to the Adult Dependants Grant, which is stopped.

If your wife were only to stay at home watching TV then the grant would be safe. The wife has lost all income into the household for herself because she and her hubby are trying to improve their education.   

Caring for someone over 35 hrs/week - eligible for Carers Allowance?

You guessed it? Not if you are a full-time student.

The problem with all these exceptions is that there is little to no information about them on www.gov.uk or the student finance web pages. It may surprise some that the government can change the student loan lending rules even after the loan is taken out. Students are unlikely to be aware of the devil in the detail of the relevant statutory instruments. So unless students access specialist money advice before they start their course, the news that they are the “exception that proves the rule” comes as an unwelcome, unexpected surprise.  

Monday, 31 July 2017

Levitate Student: SFE & DWP, left hand doesn't know what right hand's doing....

In academic year 2016/17 Maintenance Grants to help with living costs were removed from the package of funding support available to new full-time HE students in England.

There were two distinct versions of the grant for living costs which were assessed in the same way and were paid at the same level, these were 

the Maintenance Grant 
the Special Support Grant

In 2015/16 a students household income had to be £42,620 to be eligible for a payment of the minimum grant of £50 with the maximum grant of £3,387 being paid to students where the household income was assessed as £25,000 or below.

So why two grants for maintenance.......?

The Maintenance Grant would count as income in the calculation of any means-tested Welfare Benefits. As the vast majority of full-time undergraduates are not eligible for Welfare Benefits whilst they study this was not really an issue.

Special Support Grant would not count as income against means-tested Welfare Benefits. So it was paid instead of Maintenance Grant to those students (such as lone parents, student couples with children, disabled students) who could evidence an underlying entitlement to certain means-tested Welfare Benefits.  

The student Maintenance Loan does count as income (albeit with some disregards) against means-tested Welfare Benefits.

In 2016/17 the Maintenance Grant and Special Support Grant were removed from the funding package and replaced by Maintenance Loan only. For those new students with an underlying or actual entitlement to means-tested Welfare Benefits their award comprised a Loan for living costs with a Maintenance element and a Special Support element

For students from the lowest income households this meant a maximum Maintenance Loan of £8,935 with a Maintenance element of  £5,466 and a Special Support element of £3,469.

The idea being that the Special Support element would be disregarded as income by the Department for Work and Pensions and other benefit agencies when calculating means-tested Welfare Benefits. 

This all makes sense except when it comes to practice......

Some students it seems, such as lone parents and disabled students, are facing problems when applying to local authorities and other benefit agencies for means-tested benefits such as Housing Benefit to which they are entitled.

These agencies do not seem to have been updated adequately about the student income changes or with guidance on how to apply the disregarded Special Support element of the Maintenance Loan.

In addition Student Finance England Student Support Notification Letters do not break down the Maintenance Loan into individual elements, making it tricky for the benefit agencies to establish how much of the Maintenance Loan award is the Special Support element.  

It seems unacceptable that the most vulnerable students, who rely on Welfare Benefits to cover their basic living costs should be impacted so adversely. These challenges do nothing to help student retention problems or to widen participation from under represented groups. No doubt university advisers and hardship funds have felt the pressure to support their students through this academic year when they have been left with reduced income and rent shortfalls due to these problems.

Why was communication about the impact of these changes so poor? Why is it taking so long to remedy?

Sunday, 30 July 2017

Levitate Student: Tuition Fee Debate - No Fee Fuss

If nothing were to change with the current Higher Education Funding system apart from it being Tuition Fee free what might change in your student loan repayment?

Use the Money Saving Expert Student Finance Calculator - read all the information about built in assumptions.

Pick a realistic salary above the £21K repayment threshold 

Play with the amounts including and annual tuition fee loan and leaving it out while keeping the living cost loan in place

For example we used 

£22,000 starting graduate salary 
a 3 year course
an annual Maintenance Loan of £8,000
£9,250 annual tuition fee

which using the default built in assumptions gave a repayment of

£22,560 over the 30 years of continuous employment. 

Taking the fee loan out of the calculation made no difference, nor did it when we increased the starting salary to £25,000. 

While calculators can only give an indication of repayment, they do help to give a better understanding of the long term repayment against the borrowing. 

Play with the figures yourself and remember that no tuition fee does not necessarily mean less repayment back to the public purse if the system of living cost loans remains unchanged.

If the system remains the same then the main beneficiaries of no tuition fees would be those who don't require a living cost loan (arguably the better off). 

Levitate Student: Tuition Fee Funding Funnel

Follow the link to our  England Tuition Fee Funnel presentation for a simplified explanation of the changes over time in the source of Higher Education Undergraduate Tuition Fee Funding in England.

It may take a few seconds to fully load.

Thursday, 22 June 2017

Loose Change - UK Money Blogger Guest Post

Here is a LINK to part 2 of our UK Money Bloggers Loose Change rant on some of the quirks of student money rules.....

Benefit rules this time...... Grr!!

Saturday, 3 June 2017

Levitate Student: Be wise - Income MAXIMISE

Did you read our Bankrupt of Mum and Dad article? Still makes our eyes water....!!

But what if you don't have a financial contribution to your budget from the bank of mum, dad, partner or other family/friends while you are in higher education?

What might your budget look like?
Tenner on notice board
There are lots of example budgets out there and "what the average student spends" guides - Google away! There are lots of examples.

So we are not going to regurgitate that information in our own version - not least because there is no such thing as an average student. Each student is an individual, with there own backgrounds, values, drivers and pressures.

The example budgets do serve as excellent guides, though they do tend to be based on the circumstances of traditional, single, school or college leaving students. This covers a large proportion of students but by no means all situations of the diverse students in higher education

No matter your circumstance you are likely to have to supplement any statutory student income to some extent.

MAXIMISE your income by

Making sure you are receiving all the student finance you are entitled to 

Asking if you are entitled to any welfare benefits - this is more likely if you are a lone parent, a student couple with children, a disabled student or a part-time student. See Any Benefit?

eXploring if you could be entitled to a bursary or other financial help from your university or college

Interest free borrowing via an overdraft offered with a student bank account

Making an application to the university/college Hardship Fund 

Identifying all your income and expenditure - understand and manage your budge

Searching for  help from a charity or trust fund  e.g. www.familyaction.org.uk  www.turn2us.org.uk 

Employment, work part-time alongside your studies - check you uni for Jobshop/Careers

Money Bee
                                                                                                                       Be wise - MAXIMISE - seek advice if you are struggling 

Thursday, 16 March 2017

Guest Post - Loose Change UK Money Bloggers

Thanks you UK Money Bloggers for the invitation to write a post for your

Loose Change blog

I focused on a few of the most annoying exceptions to the finance and benefit rules that students often face . It turned into quite a rant so the editor and wonderful founder of Debt Camel allowed it to be a rant of two halves. So here is a link to Part 1 

Students - too often the exception that proves the rule

Friday, 3 March 2017

Levitate Student: Our Services & Limited Special Offer

Levitate Student MONEY offers independent, impartial, information and guidance for students studying in Higher Education in the UK 

Our aim is to guide and help students understand their money options and to make their own informed choices.

We want students to be 
empowered consumers and to understand their money RIGHTS, RESPONSIBILITIES and know who to REFER to if they are not sure.

These are our

Our INDEPENDENCE is important to us because sadly sometimes students need help with money problems involving their University, the Welfare Benefit or Student Finance agencies.

We are not part of the government, Student Finance agencies, or directly linked to any Universities or Colleges. We have over 12 years experience in delivering expert student money guidance.

Knowing where to look for the right answers is sometimes not as easy as it sounds. So we are here to help with some useful.....

  Our Services
Presentations & Talks
For Staff, students at organisations who work with prospective HE students

Student funding entitlement guidance
Student funding application guidance
Repaying the student loans
What to do if refused funding or how to appeal a decision
Tips for considering budgeting, accommodation options, bank accounts, jobs

Financial Capability workshops 

For students, students & parents, including activities, games & talks

Funding entitlement
Budgeting and Money Management
Common money issues faced by students
Know where to look for help

One to Ones

Student Money guidance for parents/students based on individual need. 

If complex then follow up work to assist with next steps.  

Limited Offer for 2017– Student & Parent Money Workshop delivered for just   £500 plus trainer travel expenses.

Send your enquiries to us at levitatestudent@gmail.com