Until recently, no official documents even hinted that parents needed to be aware of this. The lack of clarity caused friction when students arrived at university without enough funds.

I spoke to some whose parents had told them “that’s what you’re given, it’s your job to stand on your own two feet” – not realising their child’s loans were half what others got – because they came from a more affluent home. 

For years, MSE and I campaigned about this information deficit, until finally in 2022, one Universities Minister listened. So now the correspondence refers to it a little, but still it’s best to use our Parental Contribution Calculator to find out what the gap is.

For 2023/24 starters, the full loan is £8,400 if living at home, £9,978 living away from home, £13,022 away from home in London. The graph below shows how as your income increases the amount of loan received drops, meaning the gap – the parental contribution – between the full loan and what’s received grows.

What if parents can’t, or won’t, contribute?

Of course, some parents won't be able to afford the contribution. There’s no rule that forces them to pay. If you are under 25, you can apply to be an estranged student which means you'll get independent student status – but many find the criteria tough (though it's automatic if you’re a parent yourself).

At least knowing there is a gap helps students and parents understand what level of funds are needed. And it's important to have this conversation together to work out how you are going to plug the hole, or even where you study.

In fact, the biggest practical complaint I hear from students is that the living loan isn’t big enough. So when deciding where to study, look at all the costs, transport, accommodation (will you get into halls?). And with living loans not rising in line with (or even close to) current high inflation, sadly things are likely to get worse.

Your step-parent or parent's partner's income counts

The family residual income assessment for under 25s is based on the home you are primarily resident in. If you live with a step-parent or your parent’s partner, their income is taken into account too (though siblings who are earning aren’t included). I’ve met a case where a student had to leave study because their parent’s partner moved in so they went from the full loan to the minimum loan, and simply couldn’t afford it.

Worse, while income is based on the tax year two years before the academic year (so for 2023 starters, it is 2021/22), even if the partner has moved in since then, their income for that year is still assessed. Quite simply this system is unjust and unfair. I have lobbied on it, to little avail.

So what you owe DOESN'T impact what you repay each year. Instead its main impact is whether you'll clear the borrowing within the 40 years before it wipes or not.

The prediction is under Plan 5 loans, 52% will clear within 40 years (you may want to read my old if students won't repay – who pays? blog). Yet the majority of university leavers will be paying well beyond the old 30-year cut off, and 48% for the full 40 years.

So unless you're likely to be a mid to higher earner, or don’t take the full loan, or are lucky enough to have access to large amounts of spare cash, just ignore the amount you 'owe'. 

Instead, in practice what happens is you effectively pay an extra 9% tax on your income for most of your working life. At current rates (excluding National Insurance) for most people...