Much has been made (rightly) of Osborne's removal of student grants for low and average income families and replacing them with loans. Osborne has tried to counter criticism by pointing out that from next year max maintenance loans for students outside of London will be £2,460. This is important as the cost of student rents has soared. Some of the latest figures I could find suggested student rents rose 25% between 2009 and 2013 (they've no doubt risen significantly since). This means average rents for university provided halls in the cheapest region of the UK swallows up ALL of the current student maintenance loan and rents in the private sector are normally higher still.
My fear is that simply raising the amount of loan available to students will stoke even more rampant rises in rents. Private student accommodation is already one of the hottest investment tickets in town with increasing student numbers and now those students will have higher income you can bet these investors are salivating at the prospect for revenue boosting rent rises.
There is also the issue of huge disparities in rents across regions. The loans system makes allowance for the higher costs of London but doesn't account for higher costs in say the South East or East of England.
I propose a two-headed solution:
- Reform the loans system so that it is based on average student living costs for each individual university location. Such figures are often calculated for the NUS or Which? There is no reason HESA (Higher Education Statistics Agency) or the ONS (Office of National Statistics) couldn't be mandated to produce these figures on an annual basis for the Student Loans Company.
- Introduce a cap on rents (affecting any landlord offering student accommodation, private halls and university-owned halls) of 75% of the average student maintenance loan for that university.
An £8,200 loan would result in a local cap of £118 a week for any student accommodation whilst slightly more expensive parts of the country like the South East would see students able to get higher loans say 5-10% higher and thus landlords in those areas would be able to charge 5-10% more than £118 a week but no more than that.