Student loan: Government refuses to scrap interest on loans as students are given support

Student loans: Interest will not be scrapped says Michelle Donelan

Student loans can be costly burdens and given the impact of coronavirus on higher education, many students may feel frustrated with the fact that they’ve had to pay out while universities have had to scale back. In light of this, several vice-chancellors called on the Government to waive interest on student loans for the next 15 months in a bid to ease pressures on graduates.

Michelle Donelan, the Universities Minister, was asked point blank on BBC Breakfast if she would introduce such a measure and she had the following reply: “So on that, our priority has always been to make sure that we’re supporting the students most in need and getting cash into those students pockets, which is what the announcement today achieves.

“And we continue to monitor the situation and also see the outcome on students over the coming months, the policy that’s put forward today [by the vice-chancellors] wouldn’t achieve that.

“We also know that at least half of students don’t actually pay back their student loan either.

“So, our priority at the moment is making sure that we get that money into students’ pockets to support them through this very difficult and challenging time.”

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The announcement Michelle was referring to was the £50million support package released yesterday by the Department for Education.

On February 2, the Government confirmed thousands of students will benefit from an additional £50million to support them with the financial pressures associated with the pandemic, which is in addition to the £20million package released in December, bringing the total to £70million for the current financial year.

The announcement revealed universities will be able to support students struggling with the additional costs of accomodation, loss of employment or extra costs associated with accessing online teaching.

This support was released as it emerged that the majority of students have been asked to continue their studies remotely to curb the spread of coronavirus.

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Thus far, many universities and student accommodation providers have decided to offer rent rebates for students who need to stay away from their term-time addresses and the Government has encouraged more organisations to follow suit.

When introducing the package, Michelle made the following comments: “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 £50 million that we are announcing today will mean we have distributed £70m for hardship in this financial year alone – on top of the £256m of government-funded student premium which universities can use for student support this academic year.

“This additional support will provide real, tangible help for those students struggling financially as a result of the pandemic.

“We will continue to prioritise a full return to education as soon possible, in line with public health advice.

“I am also working with universities and professional bodies to ensure students can graduate as planned.”

The funding itself will be distributed directly to universities by the Office for Students.

Universities will then be able to help students impacted by the pandemic directly.

It remains to be seen if this additional funding will help students who are struggling with the pandemic.

Recently, the ONS released statistics on the impact coronavirus is having on higher education students and the results made for some pretty grim reading, with it being revealed that:

  • Almost two-thirds (63 percent) of students indicated that their well-being and mental health had worsened since the start of the autumn 2020 term.
  • A statistically significantly higher number (63 percent) of students reported a worsening in their well-being and mental health, compared with 57 percent reporting the same in the previous student survey (20 to 25 November 2020).
  • Average life satisfaction scores of students decreased by nine percent from 5.3 to 4.8 out of 10, between 20 to 25 November 2020 and 8 to 18 January 2021.
  • A greater proportion of students reported being dissatisfied or very dissatisfied with their academic experience since the start of the autumn term (37 percent), compared with 29 percent reporting the same at the end of November 2020 (20 to 25 November 2020).

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