Seven vice-chancellors call for student loan interest over 15 month Covid period

Top bosses of seven universities in England are calling on the Government to scrap interest on student loans for those whose learning has suffered due to the coronavirus pandemic.

The vice-chancellors of the universities, including Goldsmiths in London, are calling for ministers to cancel interest on loans covering a 15 month period.

The period is from the first national lockdown, in March last year, until summer 2021.

In a letter to Prime Minister Boris Johnson, as well as Rishi Sunak and Education Secretary Gavin Williamson, the vice-chancellors say such a move would ease pressure on students.

The letter, also signed by vice-chancellors at East Anglia, Essex, Kent, Reading, Royal Holloway and Sussex universities, says: ‘The pandemic has placed unprecedented pressures on our students.

Prof Frances Corner from Goldsmiths, University of London, is one of the seven vice-chancellors to sign the letter to the Prime Minister

Prof Frances Corner from Goldsmiths, University of London, is one of the seven vice-chancellors to sign the letter to the Prime Minister

Prof Frances Corner from Goldsmiths, University of London, is one of the seven vice-chancellors to sign the letter to the Prime Minister

The seven vice-chancellors who have written to the Government 

Prof Anthony Forster from the University of Essex

Prof Frances Corner from Goldsmiths, University of London

Prof Karen Cox from the University of Kent

Prof Paul Layzell from Royal Holloway, University of London

Prof David Richardson from the University of East Anglia

Prof Adam Tickell from the University of Sussex

Prof Robert Van de Noort from the University of Reading

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‘In some of our universities, demands for hardship funds have increased by over 100 per cent. 

‘As a result of the pandemic, students also face extraordinary mental health challenges and 18 per cent of students lack access to a computer, laptop or tablet.

The letter adds: ‘Additional government support is an urgent priority.’ 

It comes as it was announced that university students facing financial pressures due to the pandemic will have access to an additional £50million support fund from the Government.

Universities will be able to use the extra funding to help students facing loss of employment, additional costs for alternative accommodation, or to support access to remote teaching amid Covid-19.

The majority of university students in England have been told to stay at home and not return to campus under the latest lockdown, which has sparked calls for greater financial support.

A number of universities have moved lessons online until even later in the academic year, prompting campaigns for rent rebates for term-time accommodation and tuition fee refunds.

In December, the Government announced a one-off fund of up to £20million to help students most in need of support in exceptional circumstances.

Now a further £50million will be available, taking the total to £70million for this financial year.

The funding will be distributed by the Office for Students (OfS) directly to universities, which will prioritise the students most in need of help.

A number of universities and accommodation providers have already said they will not charge rent to students who cannot use their university halls, but campaigners and organisations representing students have called on universities, accommodation providers and ministers to go further with compensation to students facing lockdown disruption.

The Department for Education (DfE) has said it wants providers of student accommodation – including universities – to offer partial refunds to students and ensure their rental policies have students’ best interests at heart.

How do student loans work in the UK?

Under the current system there are two parts to student loans, the maintenance loan and the tuition fee loan.

The maintenance loan, as the name suggests, is to cover living costs such as accommodation, food and bills.

The amount varies from student-to-student, with 35 per cent means-tested based on the family income.

Students in London are also allowed larger maintenance loans to cover the extra living costs.

The maximum a student can get from the maintenance loan this year (2020/21) is £9,203 outside of London and £12,010 if they attend university in the capital.

On top of this, there is the tuition fee loan, allowing students to borrow up to the full £9,250 a year cost of tuition. This is paid directly to the university. 

Students begin paying back their student loan from the April after they finish university – providing they are earning over the threshold set that year. The money is taken directly from a person’s salary.

Interest is also based on earnings. The rate rises slowly from that of the Retail Prices Index (RPI) to a maximum of RPI plus 3 per cent for those in the highest income categories.

However if you have not paid off the debt after 30 years, then it is automatically wiped off. 

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Universities minister Michelle Donelan said: ‘This continues to be an incredibly difficult and challenging time for our students, and I am hugely grateful to all the university staff working hard to prioritise their health, wellbeing and learning during this pandemic.

‘The additional £50million that we are announcing today will mean we have distributed £70million for hardship in this financial year alone – on top of the £256 million of Government-funded student premium which universities can use for student support this academic year.’

Last week, a survey from the Office for National Statistics (ONS) found that a growing proportion of university students were not happy with their academic experience – and nearly two in three had seen their mental health worsen.

Ms Donelan added: ‘This additional support will provide real, tangible help for those students struggling financially as a result of the pandemic.’

But the University and College Union (UCU) general secretary Jo Grady described the funding as a ‘sticking plaster’.

She said: ‘Whilst we are glad the Government has finally recognised the mess their dithering and U-turns have created, it should not have taken students queueing for food banks, or waves of rent strikes, for the Government to start acknowledging the scale of the problem.

‘Small-scale funding packages like this are simply a sticking plaster and not the answer to the widespread problems facing the sector. The Government needs to go further and provide proper funding to avoid irreparable long-term damage to the sector’s reputation.’

Alistair Jarvis, chief executive of Universities UK (UUK), said the additional funding was a ‘positive step’, but added: ‘As the serious mental health impact of the pandemic continues to be felt, universities need further funding to alleviate the substantial increases in demand that university wellbeing and support services are experiencing.

‘Although university staff are making huge efforts to offer high-quality online learning, the Government should provide support that recognises that students are missing out on the wider student experience that they would benefit from in a normal year.’

Nicola Dandridge, chief executive of the OfS, said: ‘The pandemic is having a profound and ongoing impact on students, with some facing severe financial hardship and struggling to cover accommodation and other costs.

‘This additional funding to help students facing financial hardship is welcome. We intend to distribute it as swiftly as possible to benefit those who are most in need. We will be writing to universities and colleges with more details shortly.’

The open letter from the seven university vice-chancellors to the Prime Minister, the Chancellor and the Education Secretary in full

Dear Prime Minister, Chancellor and Minister,

Students are studying in the context of a deadly global pandemic. Our universities have sought every opportunity to support our students – delivering high quality, online learning, supporting student welfare and addressing digital deficits. This has stretched financial resources and, even with reprioritisation of spending, will lead to financial deficits. We believe the Government must now play its part in championing fairness between the generations.

The opportunity and wealth gap between the young and old is already unacceptably large – and existing challenges are being amplified by the impact of the pandemic on students and their life chances. We ask the Government to increase its support for this generation of students. With 15 months from initial lockdown through to the end of this academic year, the reduction of an equivalent 15 month interest waiver on student loans, would be seen as a significant gesture and help graduates get off to a better start in the early stages of their careers.

The pandemic has placed unprecedented pressures on our students. In some of our universities, demands for hardship funds have increased by over 100%. As a result of the pandemic, students also face extraordinary mental health challenges and 18% of students lack access to a computer, laptop or tablet. Additional government support is an urgent priority.

For a second year in a row, all of our students will be entering into a desperately challenging job market. Our universities want to play a full part in supporting graduates in their transition to work or further study. Government flexibility in the use of the Apprenticeship Levy and funding for bite-size qualifications, aligned to urgent priorities for higher-level skills and flexibility in using other sources of government funding, would make an immediate difference. These measures would also accelerate the positive contribution that universities can make in supporting the national recovery.

In combination, we believe these initiatives would ensure the Government can play its full part in ensuring fairness between generations – and that university students are not forgotten or left behind.

Yours sincerely,

Professor Anthony Forster, Vice-Chancellor, University of EssexProfessor Frances Corner OBE, Warden, Goldsmiths, University of LondonProfessor Karen Cox, Vice-Chancellor and President, University of KentProfessor Paul Layzell, Principal, Royal Holloway, University of LondonProfessor David Richardson, Vice-Chancellor, University of East AngliaProfessor Adam Tickell, Vice-Chancellor and President, University of SussexProfessor Robert Van de Noort, Vice-Chancellor, University of Reading

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