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IMPACT OF CHILDCARE SUPPORT FOR LONE PARENT STUDENTS

6 FINANCIAL ISSUES

This section describes the range of financial issues arising from survey responses and the focus groups.

6.1 INSTANCE OF CLAIMING LONE PARENT CHILDCARE GRANT

6.1.1 All survey respondents receive the Lone Parents Grant. Almost half the sample claimed the LPCG of 1,000 in 2001-02, with 49% Grant Claimants and 51% Non-Claimants. SAAS figures estimate that approximately one third of the Lone Parent Grant recipients took up the LPCG. This suggests that those in receipt of the LPCG have been more likely to respond to the survey than non-claimants.

6.1.2 The main reason given for not claiming the LPCG is the fact that the respondent is not using a 'formal' childcare arrangement. Three quarters of the non-claimants gave this as the reason for not claiming the LPCG. A further 21%, however, said that they did not know about the grant. Other reasons given by students for not taking up the grant include the lack of 'formal' childcare in an area and a preference for informal arrangements, as these are more flexible and usually able to take children if they are ill.

Figure 11: Reasons for Not Claiming the Lone Parent Childcare Grant

Base: Non-Claimants of the LPCG

6.1.3 Interestingly, the lone parents towards the younger end of the age spectrum were more likely not to have claimed through not knowing about the grant than their older counter parts. The younger lone parents also have the highest use of formal care, because they are more likely to have children under school age.

Table 15: Reasons for Not Claiming by Age of Parent

6.2 HELPFULNESS OF LONE PARENT CHILDCARE GRANT

6.2.1 Respondents who received the grant were asked how helpful they found the additional money.

Figure 12: Helpfulness of the Lone Parent Childcare Grant

Base: LPCG Claimants

6.2.2 For most respondents (96%), the LPCG was seen to be either "helpful" or "very helpful". The reasons given for their answers are identified below in verbatim comments taken from the (anonymous) questionnaires:

"It would be very difficult to manage financially without it."

"Now it means I have just enough money to live on."

"Because without the additional childcare cost, I would not have anyone to look after my child, therefore I would not be able to attend college."

6.2.3 Additional comments written on the questionnaire included:

"The university subtracted the 1,000 from the help that they provide."

(This is a reference to the fact that the LPCG is taken into account by FE colleges and HEIs when calculating payments from the Mature Students' Bursary Fund.)

"It covered all childcare cost, but I think it's unfair that they (childminders) have to be registered as they are more expensive and generally don't care about the child."

"Having 2 children that require childcare can get expensive. The grant and loan together are not enough to live on for a year."

6.2.4 In 2001-2002, the LPCG was paid in one lump sum. Lone parent students would prefer to receive stage payments, as is the case with other SAAS grants, to assist their personal budgeting. SAAS has changed the system for 2002-2003 to allow the LPCG to go out in three instalments over the academic year.

6.3 CHILDCARE COSTS PAID BY RESPONDENTS

Childcare costs for children of both school age and for those under school age are shown below.

Figure 13: Cost of Childcare

Base: All respondents with children in each age group

6.3.2 The chart demonstrates the additional cost of younger children.

6.3.3 Over a quarter (29%) of lone parents with school age children manage to avoid childcare costs altogether, and over half (55%) pay less than 50 per week. This compares with only 16% of those with children under school age who avoid costs, and a third (33%) who pay less than 50 per week.

6.3.4 Half (51%) of those with children under school age are paying over 50, and 12% are paying in excess of 100 per week. The respective figures for those with school age children are 15% and 1%.

6.4 COST OF CHILDCARE BY MAIN ARRANGEMENT

6.4.1 The type of childcare used is a major factor in the cost of childcare and, as has been shown above, the younger the child, the more likely it is to be in a more expensive arrangement.

6.4.2 The tables below look at the cost of childcare for lone parents by childcare arrangement for both pre-school children and those of school age.

Table 16: Cost of Childcare by Main Arrangement (Pre-School Children
Under 5)

Table 17: Cost of Childcare by Main Arrangement (Children 5 Years and Over)

6.4.3 The tables show the impact of the cost of formal care - particularly Registered Minders - for under school age children. Over three-quarters (78%) of lone parents with under 5s, and who use Registered Minders, are paying over 50 per week. 15% are paying over 100 per week. The comparative figures for those with children of school age are 32% and 4% respectively.

6.4.4 Lone parents with under 5's also pay more to friends or relatives to look after their child - 22% pay over 50, compared to only 9% of those with school age children. This is because school age children require after school care, rather than all day care.

6.4.5 Those who have children in formal care arrangements, but who are not paying a fee for the place are likely to be those who are able to benefit from 'free' places - possibly provided by a local authority.

6.4.6 A lone parent in HE in 2001-2002 received one LPCG of 1,000 regardless of the number of children they had. Lone parents informed us that this did cover the cost of one child for an academic year at an After School Club. The survey results show that for most lone parents using 'formal' childcare, the cost for an under five is in excess of 50 per week, i.e. a minimum of 1,900 per academic year.

6.4.7 In some areas, where there is a shortage of registered childminders, parents find that they have to pay a retainer fee in addition to the amount discussed above to maintain a place over the holiday periods, or lose it. This makes such provision less affordable.

"You have to pay nurseries/childminders even when (the children) are not there for the summer. You have to pay a retainer. But that it's not taken into consideration (when deciding the amount of the grant). Last year I had to pay a childminder, who lived just round the corner, 15 a week for 17 weeks over the summer. I couldn't give the place up, because I couldn't get another childminder in the area." (Female, Dundee, HE)

6.4.8 A point that was raised several times in the focus groups is the fact that University/College holidays do not always coincide with school holidays, and this can add to childcare costs, as can in-service days. The Easter holidays create the most problems, and are particularly difficult for lone parents with children over the age of 11+ (i.e. for whom there is no formal provision). One of the colleges in the study, Lauder College, is specifically trying to address this, and bring their holidays in line with local schools.

6.5 OTHER GRANTS OR BENEFITS CLAIMED

6.5.1 Respondents were asked which other grants and benefits they currently claim. The School Meals Grant (56%) and Travel Expenses (55%) were most frequently mentioned. Both the Mature Students Bursary and Hardship Funds are claimed by a third of students, and almost a fifth (19%) claim Housing Benefit.

Figure 14: Other Grants and Benefits Claimed

6.5.2 The main Grants and Benefits claimed by domicile are shown in the table below. It is also noticeable that those who live in rented property are most likely to be claiming from the Hardship Funds.

Table 18: Grants & Benefits Claimed by Domicile

6.5.3 Those who were on Income Support prior to starting their studies show a higher instance of claims for the key benefits and grants.

Table 19: Grants & Benefits Claimed by Previous Economic Status

6.5.4 Lone parent students in the 25 - 44 age groups are most likely to be claiming from the Hardship Funds.

Table 20: Benefits Claimed by Age of Lone Parent

6.5.5 Claims from the Hardship Funds are particularly high amongst 25 - 35 year olds. Table 8 identifies the fact that 74% of lone parent students in this age category have children under the age of 10, and 22% have children under the age of 5. They are making use of a high proportion of Formal Care (73% compared to an average of 60% - see Table 14).

6.6 ISSUES RELATING TO GRANTS AND BENEFITS RAISED BY RESPONDENTS

6.6.1 Lone parents who took part in the Focus Groups raised several issues about the Grants and Benefits that are available. Many stated that they are experiencing financial hardship and, for most lone parent students that the research team spoke to, their lives are a hand-to-mouth existence. For some, the loss of Housing Benefit and Income Support, even with a Student Loan means that they also start to incur private sector and family debt.

6.6.2 The fact that the student loan is classed as income - and therefore reduces benefits entitlement - creates a difficulty for lone parents. As the loan has to be repaid, although only when the student has ceased studying and is earning more than 10,000, it is not perceived to be the same as income or benefits. The lone parents argue that they differ from other students in that their parenting responsibilities reduce their ability to work to supplement their income, their costs are higher, and their family unit keenly feels the loss of benefits. Once they cease to receive a prescribed benefit, they also cease to be eligible for free prescriptions and other benefits.

"I applied for my full student loan, and an additional means tested loan. What happened was that all of that was counted against my housing benefit. So I have a debt which I have to pay back, but that is counted as if it is income." (Female, Edinburgh, HEI)

"People seem to forget that with benefits you also get free prescriptions, and dentistry." (Female, Glasgow, HEI)

"I had to give up working, which meant I lost the Family Working Tax Credit, which doubled my wages. I just could not cope with the work as well as my student work and being a parent." (Female, Dundee, HEI)

"I have three kids. I don't have the choice, I can't work and it is really difficult. You have to pay your student loan back. My loan is used to cover the childcare so you have to live of the grant and it is really, really tight." (Female, Edinburgh, HEI)

"The difference with our course is we go on placements, and we work full time for big blocks of time, plus we go home and have got paperwork to deal with. We can't get jobs because of the placements." (Female, Dundee, FE in HEI).

6.6.3 Many lone parents started their studies as a route to moving the family to a better standard of living (See Table 5 at Section 4.9), but now feel that they face many years of debt repayment once they start working. A key concern is that their lone parent status will not be taken into account when repayments of the Student Loan start, and that they will be facing financial hardship for many years to come.

"I am in debt to my parents, my friends, my ex-husband, the Student Loans Company, catalogues, everything. I am in debt left right and centre. I find it really depressing. I can't give (the children) the things they want to do. It is depressing that in years to come I will be paying interest on school trips etc., that I have to pay for now. If you want (the children) to have any kind of life it is a struggle, then you pay interest for years to come." (Female, Dundee, HE)

"Since starting at university, quality of life for my daughter and myself has most definitely declined. I have accumulated so much debt that I can barely sleep for worrying about it, let alone study." (Female, letter sent with questionnaire)

6.6.4 Rent payments are a major area of concern, and the loss of housing benefit in favour of a loan removes the security of knowing that the rent will be paid irrespective of other financial demands. This increases their fears for the well being of their children. Those who have secured a mortgage prior to becoming a student often find themselves better off, as their mortgage cost with present interest rates is cheaper than the rental on an equivalent property in the private sector.

6.6.5 Many indicate a preference to receive their grants in smaller, more frequent amounts, as they find managing a quarterly budget difficult, given their financially precarious position. The summer holidays are a particular problem. If they work, all their money disappears on childcare. If they do not work, they have problems paying their bills.

"I find it hard to manage. You know getting it in these lump sums, half of it I usually owe out by the time I get the cheque." (Female, Dundee, HE in FE college)

"In the summer holidays I have a big problem. There is no money left from any grants, you can't work or most of your money goes to the childminder." (Female, Edinburgh, HEI)

6.6.6 On a practical level, they incur additional costs compared to other students, not just in terms of paying for childcare, but also in travelling to and from the child's carer or school. Where there are no College-based nurseries, most lone parents have a double bus journey to drop their children off with the carer, and then make their way to College/University. This double journey does not qualify under the transport grant.

6.6.7 Although such costs can be covered by the Mature Students' Bursary Fund, the MSBF is discretionary and capped at 2,000, which means that the travel costs compete with the many other living costs that lone parent students face in seeking to provide for their families.

6.6.8 Many lone parent students experience guilt over the hardship that they feel they are asking their children to cope with, and the fact that they (the children) have to go without the things that their friends enjoy.

"If you are working then you feel you are denying your child time, and if you give up working then you are denying them Playstation games, or whatever they want." (Female, Edinburgh, HEI)

6.7 HIGHER EDUCATION STUDENTS IN FURTHER EDUCATION COLLEGES

6.7.1 The 2001-2002 SAAS Award Letter did not make any reference to the 1,000 LPCG because of the timing of its introduction. This caused difficulties for FE college student support staff who needed to make additional enquiries of HE students to find out what support they were already getting from SAAS before determining what the college could offer. The Award Letter for 2002-2003 onwards will make reference to the LPCG, which will resolve this issue.

6.7.2 Lone parent HE students attending FE colleges informed the researchers that the normal SAAS payment system is geared to institutional term dates. However the timing of the announcement of the LPCG in July 2001 meant that, with mid-August start dates, FE students had to pay out for childcare for around one and a half months before receiving the LPCG. The SAAS Guide to Student Support 2002-2003 states that, if making the first payment at the start of the course would cause hardship, advance payment of Dependants' Grant, Lone Parent Grant and LPCG (which cover a period of 52 weeks from 1 August 2002) and School Meals Grant (which covers a period of 38 weeks) can be requested to cover the period from 1 August to the start of the course. This should alleviate this issue.

6.7.3 FE colleges visited and which have an on site nursery pay the nursery direct for student childcare. The nurseries raise a single bill to the college and do not want to have to introduce split billing to the college and individual students. This is causing problems in respect of students following HE courses in receipt of the 1,000 from SAAS. Colleges could bill their HE students direct. However, this results in additional administrative costs and colleges have experienced problems in collecting such debts in some instances. Where such students have additional children not in the college nursery, the student may have used some of the 1,000 LPCG to pay for after school care, so does not have the full amount to pay to the college towards college nursery costs.

6.7.4 One college visited stated that the administrative issues are driving them towards offering college nursery places to FE students in preference to HE students.

6.7.5 A lone parent following a HE course in a FE college has access to a maximum of 3,000 towards childcare, made up of the 1,000 LPCG paid by SAAS to the student and up to 2,000 from the HE Mature Student Bursary Fund (although, if all 2,000 is used for childcare the student will not get any support for rent or hardship). An equivalent student following a FE course can have all childcare costs, which can be in excess of 5,000, paid for by the college and still get support for rent or hardship. This causes problems for completing FE students wishing to progress to HE. Such students can face even more difficulties and financial hardship if they wish to move to a HEI. Such a move is likely to involve greater travel and the research team was informed by lone parent students attending HEIs, who had previous experience of FE college, that they received far less support and guidance at the HEI.

6.7.6 As stated above, all HE students in a FE college can get a maximum of 2,000 from the Mature Students Bursary Fund. In one college visited, if the student is a lone parent, 1,000 of that is ring fenced and can only be paid to a childcare provider, leaving only 1,000 towards rent and hardship. A non-lone parent student can get all of the 2,000 for rent and hardship. The average payment from the fund in support of rent and hardship during 2001-2002 at the college visited was 1,300. Therefore, lone parent HE students at this college perceive that they get 300 less support towards rent and hardship than non-lone parents. The researchers understand that a solution could be for the college not to ring fence half of the MSBF limit or to use some of its Hardship Fund allocation (which can be enhanced to some extent from its MSBF allocation) to provide additional support for rent and hardship to lone parents. However, college staff did not seem to be aware of these possibilities.

6.7.7 The same college expressed a preference for the 1,000 that the guidance asks institutions to provide to lone parent students for childcare costs and the SAAS 1,000 to be withdrawn for students in FE colleges, with all this money being put into one Childcare Fund for both FE and HE students with laid down criteria for its use.

6.7.8 Participants in the focus groups expressed the view that the FE colleges are more family friendly than the universities. They are more aware of their lone parent students as a group, and more likely to be sympathetic, e.g. in granting extensions for written work to be handed in if there has been a family problem.

"In FE, there was more support and staff knew you. In University you are anonymous they don't know you." (Female, Edinburgh, HEI)

6.8 SUMMARY

6.8.1 The main reason given for not claiming the LPCG is the fact that the respondent is not using a formal childcare arrangement. Around a fifth of non-claimants, however, said that they did not know about the grant. The vast majority (96%) of respondents found the LPCG "helpful" or "very helpful". Childcare costs reduce as the age of the child increases. According to our calculations on the basis of survey responses, the cost of 'formal' childcare for an under five for one academic year is at least 1,900 and the cost of one child for an academic year at an After School Club is around 1,000. This latter figure equates to the amount of the LPCG in 2001-02. Typical lone parents in the 25 - 44 age groups are most likely to be claiming from the Hardship Funds. The debt levels they are incurring are a cause of stress and concern to lone parent HE students. Worries about rent are one of the main sources of financial concern, and lone parents have less flexibility to take part-time jobs whilst studying, due to their parenting responsibilities. FE colleges experience some administrative difficulties working with the lone parent HE student support system in comparison to that for FE students.

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