Thank you to everyone who provided me with feedback on Hardship
Loans, either before or after Christmas. Please find below the
comments which I have sent to the DfEE, on behalf of AMOSSHE, to
inform their review. (It is quite long so apologies if it's of no
interest to you and please delete now!)
Pam
Dear Ms Brooks
Thank you for your letter of 22 December inviting AMOSSHE’s
comments on hardship loans.
As you will know, we have had severe reservations about the
scheme since it was first announced. I should make it clear,
however, that this is not because we think additional financial
support for students is not needed but rather that we believe this
particular scheme to be flawed.
Very many students find that their essential expenditure
outstrips the funding available to them via the Mandatory Award or
the new Student Support systems. Since the introduction of Access
Funds, institutions have been asked to make value judgements about
these students, who are failed by the official system, and to
determine whether they are worthy of extra resources. This year’s
increase in Access Funds and the introduction of Hardship Loans have
exacerbated the situation since increasingly large sums are now
discretionary and within the gift of institutions.
We would argue that the most important priority should be
to increase the support available to students, through loans and
residual grants, to a level which more accurately reflects their
living costs.
Nevertheless, we recognise that such a large change is not
likely to happen immediately and have a number of comments to make
about the current Hardship Loan arrangements.
As you know, the Education (Student Support) Regulations 1998
require that a student be able to show that ‘due to exceptional
financial hardship a borrower may not be able to continue to attend
his course for the remaining part of the academic year’. Our
experience shows that, if a student is so desperate as to be
considering abandoning a course for financial reasons, it is unlikely
that the sum of £250 will be able to retrieve the situation. A
Hardship Loan, on its own, therefore, can rarely help the very
students it is supposed to be meant for. Indeed, many of these
students will already have high levels of debt and be unwilling to
increase them. The consequence is that most such students also apply
for Access Funds and usually this is more appropriate. Their
applications to Access Funds are delayed, however, since they first
have to apply for a Hardship Loan which they can not do until they
have received the first instalment of their normal loan. This in
itself can cause extra hardship which is exacerbated should there be
any problems with their loan applications.
Conversely, there are a number of students in less dire
straits for whom £250 could make a difference. Technically speaking,
however, such students would not be eligible for a Hardship Loan
since they are not at the point of actually leaving higher education.
In any case, such students are often deterred from applying by the
fact that they have to supply sufficient evidence to enable a means
test to be carried out. Many institutions have chosen to amalgamate
the application procedures for Access Funds and Hardship Loans in
order to be able to cope with the additional administrative burden.
Whilst this is useful in the case of students also needing help from
Access Funds, the detail of such applications, necessary when
considering grants of up to £3,000, can be very off-putting for
someone who just wants a bit extra added to their loan.
One of the difficulties with the new support arrangements
is that individual students receive their funding from a multiplicity
of sources. A single student may be receiving financial support from
his or her Local Education Authority, family and the Student Loans
Company. If s/he then has financial difficulties, further help may
be available from the SLC via the institution, in the form of a
Hardship Loan, and/or from the institution in the form of Access
Funds. To students this appears excessively complicated and often
confusing. This confusion may be further increased in those
institutions which already have their own hardship funds.
The doubling of Access Funds, whilst very welcome, has
already created additional tasks for institutions. Such a large
increase does not just mean being able to distribute more money but,
in many institutions, has necessitated criteria being revisited and
adjusted. This is not helped by the fact that, despite the Funding
Councils collecting information about Access Funds from institutions
each year, there has never been any structured feedback or
opportunities to exchange good practice, other than those arranged by
organisations such as our own. We will be taking this up separately
with the Funding Councils. On top of this, institutions are now
having to administer the Hardship Loan scheme and many are reporting
that the effort expended on doing this is out of all proportion to
the benefit available to students. Although some financial support
is being provided this year by the payments from the Student Loans
Company, this often does not cover costs. It is not clear what will
happen next year when the relationship between institutions and the
SLC changes with respect to income contingent loans.
Current demand for Hardship Loans is low. Some reasons
for this have already been mentioned (for example, the evidence
required in order to apply and the confusing nature of the scheme).
There has been little official publicity about the scheme which has
meant either that many students do not know about it or that
institutions have had to expend resources on publicising it. Another
factor is undoubtedly the fact that financial hardship tends to
increase as the year progresses. The Department’s expectation that
60% of allocations will be spent by the end of March is, therefore
unrealistic. A number of institutions are under the impression that
if this deadline is not met they will not have access to this element
of their allocation after this date.
If demand for Hardship Loans increases, there are likely
to be significant logistical problems for institutions because of the
limited funds available. It will prove very difficult, if not
impossible, to implement a system able to respond to need, at the
time at which it arises, and still target the most deserving cases.
Students who happen to apply after an institution’s allocation is
exhausted may be able to receive help from Access Funds in the form
of a grant or may not be eligible to receive any further funding.
(Although it is possible to use Access Funds for loans rather than
grants, the money has to be repaid before graduation, meaning that
this is often not a feasible option.) This will cause many dilemmas
for those allocating Access Funds.
There is also some confusion currently about the
methodology used to distribute the funding available for Hardship
Loans. I had previously been led to believe that the allocation to
institutions would probably be made according to the number of
eligible students and there was unlikely to be any weighting. The
figures I have from institutions would suggest that this is no longer
the case although I do not recall receiving any subsequent
information that this had changed.
In view of the many concerns which we have about the
current system, we would make the following suggestions:
Adding the funding available for Hardship Loans to Access
Funds to create a single system would reduce the confusion among
students and also reduce the burden on institutions.
If Hardship Loans were to continue, however, the eligibility
criteria should be changed so that students in lesser need were able
to apply for them. Whilst we recognise the discretion currently
granted to institutions, the requirement for students to apply for a
Hardship Loan before being eligible for Access Funds should be
removed to enable those in the greatest need to get help from the
Access Funds without having to add to their existing debts.
Clarification is sought regarding the expectation that 60%
of institutions’ allocations will be spent by the end of March and
whether there will be any repercussions if this is not the case.
We would welcome clarification of what payments institutions
will receive next year in relation to their administration of
Hardship Loans and how these payments will be made.
The methodology used for allocating the funds should be more
transparent in future and clarification is needed as to the
methodology used for 1998/99.
I hope these comments and suggestions are useful and I look
forward to having the opportunity to discuss them in more detail in
due course.
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Pamela Bell-Ashe
University of Liverpool
Chair
Association of Managers of Student Services in Higher Education
Tel: 0151 794 2243
Fax: 0151 794 2249
e-mail: [log in to unmask]
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