Martin Lewis has issued a warning to parents who are set to pay thousands of pounds in 'hidden' costs that 'most don't know about in advance'. The Money Saving Expert has warned that parents who have children aged under 25 and not estranged from them will end up paying thousands in hidden costs due to the eligibility criteria of student loans.
It comes as students across the country are heading off to start university this month, with many relying on student loans to pay for the cost of their degree and their living costs.
What Martin Lewis said on his podcast
Talking on his BBC podcast, Mr Lewis said: "This is an important thing to consider for anyone whose child has just started senior school or who is already at senior school. The truth is each new school year is a year they're closer to potentially going to university.
"And what many parents are not told is when they do go to university, there is a hidden parental contribution. Not about tuition fees, but the amount of money your child gets to live off."
How the means test affects maintenance loans
This applies primarily in England, but also in Scotland and Northern Ireland, though not in Wales. "If they're aged under 25 and not estranged from you, the amount of money they get to live off when they go to university is dictated by a means test of family income, which is a proxy in most cases for parental income.
"In England they start to lose their maintenance loan if you have family income of just £25,000. Outrageously, that hasn't been increased since 2008. It should be 60% higher.
"So even a single parent earning just above minimum wage, their child would not get the full maintenance loan. And the more your combined earnings up until about 65 to 70 grand, the less the loan the child gets, so that the gap at the maximum can be as much as £7,000 a year of reduced loan only because of parental income.
"Which means in many ways it's an implicit hidden parental contribution."
