For Staff: Our take on the new Postgraduate Loans System
At Gradfunding, we welcome these changes because they provide a greatly needed extra source of support, and will hopefully have the effect of driving students away from the high-interest private loans companies targeted at students which have appeared en masse in recent years. On the other hand, we are also mindful that - even though it is at a much better rate of interest - students will be encouraged to incur even more debt. We are also mindful that this change makes it necessary for postgraduate funding resources like the Alternative Guide to make our place in this changing market crystal clear, and to show how we dovetail with the new system. However, rather than the new loans system rendering us obsolete, we believe they make the Guide much more important than ever before.
The first reason for this is that the new loans are not enough to bankroll a whole course. After Masters fees have been paid, the full loan of £10,000 will leave (at best) a few thousand left for the student’s maintenance. For many courses, paying the fees will consume the entire loan. For a PhD, the full loan will average £8,300 a year if the doctorate takes three years, and £6,250 a year if it takes four. This, similarly, will leave precious little money after fees are paid. The Alternative Guide then comes in to supplement this loan funding. Indeed, it must be stressed that charity awards are almost always supplementary- that is to say that charities have always been likelier to back students who had some other income (whether other grants, part time work, savings, or loans from a respectable source) rather than those who present them with a black hole and no other means to fill it. The loans system makes partial funding much easier to get, which in turn makes charities much likelier to offer supplementary funding.
The second reason - and one our customers in postgraduate recruitment are naturally very mindful of - is that supply is clearly going to generate its own demand. Many more students are going to do Masters degrees now the loans are available than would otherwise have done so, and the same will be true of PhDs. There will thus be many more partially-funded students who need extra funding to bridge the gap between what their loan gives them, and what they actually need. Again, the value of flexible supplementary grant funding - a few thousand pounds here and there - becomes more pronounced than ever before. And that’s where charities, and the Alternative Guide, excels.
The third reason is simply that we offer grants, not loans. While superficially attractive, encouraging students to incur ever-more mountainous debt is
inherently problematic, and many students will want an alternative in the form of grants.
The Alternative Guide - in both book and web resource versions - has been updated to take into account the new loans system, with an emphasis on how students can use loans (if they decide to take them out) to unlock further funds through charity.