Grants and Loans

1 Conversation

Even hermit sages in Nepal will be aware that there is currently a large argument going on in the UK about top-up fees for university places. The government's position is that students should take out loans to pay a small portion of the university costs with the government paying the remainder. The only other solution, they say, is to take the money from general taxation. This would involve raising tax and means that everyone, regardless of whether they are able - or plan to go - to university will have to foot the bill. Opposition voices say that education should be free and the state should pay.

During the news report that I was watching, there was a student protest outside the Houses of Parliament, with a student 'Del-boy' type flogging different degrees from different years for a price. Degrees from 1960 were free, degrees from 2003 cost thousands.

It is easy to judge the government as harsh, forcing students to take out loans to pay for university courses. Some critics have even argued that poorer students may chose 'cheaper' courses.

Equally proponents of the scheme argue that it is unrealistic for students to expect that the government will pay the entirity of their university course. Some student bodies want to see a return to a grant-based system.

However, I have a different point to make with this article.

I dislike the term 'poorer students'. All students are poor by definition. I was in the very last group of students in Scotland to get through on the old grant system. I feel very lucky to have done this. My sister, who followed me only a year later went through on the first loan system. Both of these systems were based on our parents' earnings. I always got the full grant. Actually I got half the grant, then a week later, when my sister's paperwork went through and the awards agency realised my parents were supporting another student, (despite us telling them this on my form) I was re-calculated with the full grant, which works out at around £1800 a year.

It was nowhere near enough. When I was in the second year and in my own flat sharing with two others, it paid for the term's rent with enough change left over for a beer and a packet of crisps. And I don't drink beer.

For anyone reading this who hasn't been to university, it is a horrible experience having to call your parents half way through the term to ask them for more money. My parents were well off, not exactly loaded, but financially secure, at least before I went to uni. I'm not so sure about now.

My sister, on the other hand, got a full loan, which is over £3400 a year. I know, because I have a spreadsheet showing this, that I could have lived very well each term on that money and never bothered mum and dad. And yet, somehow, she was calling home asking for money as often as I was. This made no sense to me. Nor did it make sense to my parents who, I found out years later, had been doing exactly the same kind of maths that I had and had arrived at the same conclusion.

The truth was inescapable - my sister was bad with money. She obviously could not manage her finances. And since both parents were 450 miles away and I was in the same city as my sister, who do you think was 'persuaded' into having a talk with her?

That was another one of those conversations I wish I could forget. In retrospect, showing her my spreadsheet was a mistake.

However, a little investigation at the time revealed a startling fact. Most students were bad with money. My friends at university were having the same problems that I was, regardless of whether they were on a grant or loan system. Very few of them had even attempted to draw up a budget for the term, but were instead 'winging it'.

When the balancing act is this important, it's like walking on a razor edge. Don't forget, the number one reason most students drop out of university is because of financial problems.

So to conclude and bring some sort of lesson to this ramble; How does the government expect to be able to balance their own books when the students themselves cannot manage their own finances?

Atlantic Cable

11.12.03 Front Page

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