Are we missing the real student loan story?

Bank of Mum and Dad Image copyright Thinkstock

When Labour finally shows its hand on tuition fees in England's universities it's going to be one of the biggest calls of the election campaign.

Whether Ed Miliband sticks with £9,000 or goes for a cut to £6,000 or a switch to a graduate tax it's going to trigger a blizzard of stories about student debt.

But are we missing something much more pressing?

The hard cash question for many students and their families is about weekly living costs and the amount they can borrow to pay for it.

"Maintenance loan" isn't such a snappy phrase on a protest banner, but it's causing real headaches, even though it's not really on the political radar.

To cover rent, food, travel and any other living costs, students can borrow up to £5,555 outside London and £7,751 for students in London.

Not to beat about the bush, it's not going to be enough, and the assumption is that parents will contribute the rest.

Cash-strapped parents

But parents might not have enough money either. A survey from financial data firm Experian in the autumn showed many parents have to find an extra £5,000 per year - and many are struggling. Many families don't have much spare disposable income.

And unlike the deferred debt of the tuition fee, the costs of rent, food, books and travel have to be paid in upfront cash.

When the BBC reported on such concerns there was a deluge of emails from families, already financially stretched, worried about this unexpected cost.

There are grants - but they don't stretch far up the income levels. If parents' combined incomes reach more than £42,600 the amount of grant on offer is zero.

For the purposes of student grants, two parents earning £21,300 each per year would be treated as being in the super-rich bracket and their children get nothing.

And that means many students have to depend on the loan, supplemented by what their parents can afford or they can raise from jobs alongside their studying.

But why isn't there much of a fuss over this?

More debt

It must partly be that there's no real voice for parents in this debate. There is no National Union of Parents to complain that very moderate earners - the squeezed middle - are lumped in with the highly paid.

And student leaders have staked their campaign so much on £9,000 fees that it feels sometimes as if they've looked the other way on living costs.

There's also the politics.

Allowing a more realistic level of borrowing would mean pushing up the overall debt level. The remorseless maths of headlines would add the tuition fee to higher loans to come up with a terrifying total.

It might be more honest, but it wouldn't be the message that politicians would want to send.

Image copyright Getty Images
Image caption Students protested over tuition fees, but the more immediate cash question can be living costs

Coincidentally, when the sky-high annual costs of US universities are quoted, these figures usually include food and accommodation as well as tuition fees.

And if you're bashing the government for charging too much in fees, it's a complex argument that another form of student debt should be increased at the same time.

It would also be more expensive for the government, as they would have even more long-term lending to students.

Dropping out

But that in turn raises another point. The big spending on student finance doesn't actually go to students. The £9,000 tuition fee, underwritten by the government, is paid direct to the universities.

The biggest warning on the lack of funding for living costs has come from university chiefs.

In defence of keeping tuition fees at £9,000, Universities UK this week argued that the focus should not be on reducing fees, but in raising maintenance support.

"A better way of supporting students, especially those from poorer backgrounds, would be for the government to provide greater financial support for living costs," a group of vice chancellors wrote to The Times

Nick Hillman, director of the Higher Education Policy Institute, cautions that the current loan system is relatively generous compared with many other countries, where many more students might live at home.

"It's the cost of having a national higher education system in which people typically move away from home to study," he says.

But the intense focus on the £9,000 paid to universities means that the amount students actually have to live on rarely gets discussed. And the underlying issues rarely get debated.

Should students, who are all legally adults, be treated as being dependent on their parents' support? Should they be the financial responsibility of parents? And what happens if parents can't or won't pay?

And how was the balance reached that it costs £9,000 a year to teach a student and £5,555 for their living costs?

According to the National Union of Students, financial difficulty is the "number one reason that students drop out of education".

"Those who do not have the rare luxury of resorting to the 'bank of mum and dad' are increasingly being driven to work full-time alongside study where jobs can be found.

"Or worse still they go into the arms of predatory pay day lenders just to make ends meet." says a spokeswoman for the National Union of Students.

"We urgently need a financial support system that ensures students get what the support they need, when they need it."