Why do maintenance loans drop by £1,000 in final year?

When I received my annual Student Finance letter, less than a month before the most important year of my degree began, I discovered that I’ll be unable to pay my rent this year.

My maintenance loan had dropped by £1,000 from the previous year without warning. I was sure a mistake had been made.

On hearing that my sister – a fresher in halls cheaper than my student house – hadn’t had her maintenance loan cut, I thought they must have messed up my application.

Baffled, I phoned, listened to some awful music on hold, got through to someone and said: “Something has gone wrong here”.


“No, nothing wrong, we cut it in final year.” Why? Since when? I asked. I was already asking my parents to top up my loan with extra monthly payments for rent and I had no pre-planned solution ready for this bombshell. I still don’t.

Student Finance’s 22-page guide doesn’t make it clear that finalists’ living allowances may be cut by almost a quarter.

“It’s because you don’t need as much money, because you’ll no longer be a student over the summer,” she explained.

It’s true I won’t be a student in July or August next year. But I might still be unemployed – like the one in 10 graduates who can’t get a job after six months – and I’ll still be forking out for rent on my student house after my degree has finished – as most students do, roped into year-long contracts by letting agencies.

This year I’ll also need to fund travel to interviews and weeks of unpaid work experience to prepare for graduate life. There will be less time for picking up part-time shifts, as I battle the stress of achieving top marks in the year that counts the most towards my degree.

I posted about this on Facebook and instantly a string of replies came through. “I’m glad you posted this because I thought I was going mad,” said one. “I can’t believe we weren’t informed at the beginning of our degrees,” said another.

Despite being in contact with Student Finance at least once a year, when reapplying for yearly loans, none of the students I spoke to had been made aware that this would happen.

It’s not a new problem either, says Harriet O’Rourke, a graduate of the University of Southampton: “Mine went down last year. It’s rubbish because I was busy and stressed with coursework so took on fewer hours at work. It’s the time when you need more money, not less. The Student Finance system is ineffective.”

Sian Elvin, a student at the University of Warwick, says: “It’s going to add even more stress to what will already be an extremely difficult year academically.”

“A tighter budget will be a distraction, perhaps detrimental to my final grade. My parents even earn less than they used to when I started my degree, but I’m still having my loan cut.”

When did Sian become aware of this funding slash? “Only when I received my letter recently,” she says – just like me. “I’ll probably have to go into my overdraft now, which I haven’t done before.”

Rebecca Earnshaw, a graduate in German from Bangor University, also struggled with the last-minute financial burden. “I had to find a job but the only vacancy I could find was at a pub working three seven hour shifts a week at unsociable hours just to keep my head above water,” she says. “If I had received the money I was expecting, my final year would’ve been a lot easier.”

Students and their families reapply for maintenance loans every year of their degrees, yet everyone I’ve spoken to was in the same position – unaware of the final year cut until the last minute.

Student Finance are crystal clear on the maximum and minimum amounts available to new and continuing applicants, so why hide the final year cut?

We’re the ones who’ll have to pay it back – but we get no say in whether we receive enough money to live off.

A Student Loans Company spokesperson says:

“In the final year of a course, maintenance loans are set at a lower rate than the previous years to reflect that for most courses, students will complete their studies in the May or June following the start of their final academic year and they are then able to pursue their chosen career.

“In some cases, where courses exceed the usual study time period, then students can apply for living costs support in the form of a long courses loan. Courses for medicine or dentistry attract different student finance packages.

“Students need to apply for their maintenance and tuition fee loans each year. The student finance calculator is available to give students an estimate of the funding they may receive.

“The amount of maintenance loan or grant that the student is entitled to is dependent on many factors including, where they live, the course and household income. The letter of entitlement that each student receives advises them what funding they will receive that academic year.”

(Source: TheGuardian)