Representatives from twenty-nine Scottish universities and colleges have penned an open letter demanding the government review the impact of Universal Credit on students. St Andrews student association has joined the student’s movement in criticising the introduction and unfair nature of the new benefit scheme. The open letter calls for “an urgent end to the unfair treatment of students in receipt of Universal Credit”. St Andrews University’s own student association president Jamie Rodney has signed his name to the open letter, pleading with the government to intervene and stop students being “trapped within the cycle of poverty, unable to complete their studies and increasing the chances of hardship and unemployment”.
So, what exactly is Universal Credit?
Universal Credit was launched by the government in 2010 to replace pre-existing benefits including: Housing Benefit, Child Tax Credit, Income Support, Working Tax Credit, Income-Based Jobseekers’ Allowance and Income Related Employment and Support Allowance. The new system has received nationwide resistance and concern from both opposition parties and social review organizations. The scheme was introduced by the government who claimed it would make the benefits system easier to access; however, the open letter claims that students’ “education is under threat due to reductions in their income”.
So, how are students being affected by the introduction of Universal Credit?
Well, unlike former benefit schemes, Universal Credit considers student maintenance loans to be a form of income. This makes the money gained through these loans’ deductible from the overall benefit payment a student may receive. This means that when students claim Universal Credit their maintenance loans, seen as income, reduce the amount they are awarded. In the open letter from student representatives it is claimed that students are losing out in almost £250 a month when the restrictions are enforced. It goes on to argue that “while £110 in student loans and/or grants is disregarded per month for those in receipt of Universal Credit, beyond this for every £1 a student receives, the same amount is deducted from monthly payments.”
The open letter cites the Student Support Review Group, a Scottish Government appointed focus group responsible for reviewing the education system to ensure its fair. In a report published in 2017 the review group argued that “no student should lose their benefit entitlements because they are in receipt of student funding”, and proposed a “special support payment” for those students in receipt of benefits, similar to the approach already taken in England, Wales and Northern Ireland”. While other types of student loans that pay for tuition and university supplies (books, equipment, etc.) are exempt from being considered income, and so do not affect the benefit amount awarded to students, the argument against Universal Credit policy is that since student maintenance loans are subject to interest and must be paid back, this excludes them from being considered as income.
The Department of Work and Pensions has defended the changes and claims that the new system “keeps the financial advantage of working”, and yet the open letter argues that this unfairly penalises students and those considering entering higher education. Opponents of Universal Credit claim it discourages low-income students from seeking higher education and therefor extends the gap of unequal representation of participants in higher education institutions. The open letter goes on to urge the government and the department of Work and Pensions to work alongside the Scottish Government in implementing a solution that secures the necessary funding needed to ensure the financial stability of Scottish students.