MARTIN Lewis issued an urgent warning to parents over ‘incorrect’ and ‘misleading’ information about student loan applications.
The Money Saving Expert claimed Gov.uk has published advice that may lead to students missing out on hundreds they’re entitled to.
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In a letter written to the chief executive of the Student Loans Company, the savvy saver urged the information to be changed and help those who have “struggled financially after being misguided.”
He wrote: “I wanted to write to you concerning incorrect and likely misleading wording on Gov.uk about the current year income assessment for student maintenance loans in England – which allows households who’ve had a substantial recent drop in income to have it taken into account when the student’s living loan assessment is being decided (meaning the loan will be bigger; a crucial lifeline for many).”
‘INCORRECT INFORMATION’
Martin found issue with these statements published on the Gov.uk website: “You’ll qualify for an assessment if your expected household income after the 15% decrease is between £25,000 and £58,291 a year.
“If your household income is more than £58,291 a year but less than £70,040 a year, you may still qualify depending on the student’s circumstances. Check how you’re assessed and paid.
“If your total household income is likely to be less than £25,000 a year, you will not be able to get an assessment unless the student needs it to get:
- a bursary or scholarship from a university or college
- extra student finance for children or dependent adults”
The expert believed this was “wrong and/or unclear” in two places.
“I presume the reason for the £25,000 rule is students from households that get less will already be getting the full maintenance loan,” he said.
“Yet someone could, and likely many would, qualify for a current year income assessment if their household income was less than £25,000 a year after the decrease, if their income was over £25,000 a year in the initial application assessment period,” he continued.
“Sudden and substantial drops in income like this are exactly what this rule is meant to help.”
The second issue Martin found was that he believed an applicant could qualify if their household income is likely to be less than £25,000 a year.
For example if household income was previously above £25,000 a year in the initial application assessment period, suggested the expert.
“This incorrect wording will mislead and will have deterred some from applying for this much needed assessment; wrongly assuming they will not qualify,” he added.
“Ultimately, this will have the biggest impact on the most vulnerable households which already may be experiencing cashflow problems during the cost of living crisis, with students from those households potentially missing out on hundreds, or even thousands of pounds of support that they were absolutely entitled to.”
The Student Loans Company has advised that the page will be updated on Tuesday, after the bank holiday.
A spokesperson said: “We always aim to make the information we provide to customers as clear and straightforward as possible.
“We have reviewed the information provided with our Government digital partner and will make it clearer at the earliest opportunity.”
HOW THE ASSESSMENT WORKS
The assessment is based on someone studying outside of London and not living with their parents.
The MoneySavingExpert website explained: “To put it simply: if your household income has dropped by at least 15% since the 2021/22 tax year, it could be worth applying for a current year assessment.
As an example, a student had a household income of £30,000 in the 2021/22 tax year and since then the amount has dropped by 20 per cent in the current tax year.
If this student doesn’t have the assessment, their maintenance loan for the current academic year would be based on their higher income figure.
This means the student would receive £9,265 – losing out on £700 more they are entitled to.
But, with the correct assessment, they would get the maximum maintenance loan of £9,978.
HOW TO APPLY
To start an applicant will already need to have an online account and have provided details about the previous tax year.
Next, fill in a current year income assessment form – this can be done online or by using the paper version and sending it to Student Finance England, PO Box 210, Darlington, DL1 9HJ.
Lastly, the applicant has to confirm their actual income at the end of the tax year – they should be sent in a separate form to complete in May next year.
“The person supporting the application needs to keep their income details up to date throughout the year, by completing a new form if their circumstances change,” the MoneySavingExpert website added.
“Otherwise, the student may be overpaid – if this happens, the student will have to “pay back any overpayment straight away”, according to Student Finance England,” it explained.
