A couple of things in the news recently:
- Martin Lewis' analysis that most students will never pay their loans off.
- The Pension Minister's suggestion that the WASPI women retrain.
got me wondering....
If (and this is a purely hypothetical question for me) I was in the situation of being a few years from a low-income retirement, or already retired on a small income (just the state pension, or with a small boost from some small DB/DC schemes, but still below the £21K repayment threshold and with little prospect of raising that) is there any reason I shouldn't just take out a student loan for as much living expenses as I can get for as many years as I can get them? After all, I'm never going to pay even one penny of it off.
Presumably the ~7-9K p.a tuition fees must be paid direct to an educational institution (and presumably it'd be necessary to actually get accepted on a course by one, but any old thing would do). But there's ~8-11K p.a in "maintenance loan for living expenses" up for grabs, for several years if I can avoid getting chucked off whatever easy-ride course I've signed up to (but with the institution getting the tuition fees, it's not like it's in their interest to kill the goose laying the golden eggs either).
A quick scan of some of the things at https://www.gov.uk/student-finance/new-fulltime-students didn't throw up any obvious obstacles (like an age limit) but I didn't look very closely. (Would be very interested in stories of older people actually exercising this path.)
So, to summarize: could student loans be used as "free money" for some older people, or is there some reason this won't work?
I note this Guardian article on older students includes (my bold):
Students can apply for a loan to cover their tuition fees if they want to study for an undergraduate degree or certificate of higher education, have never studied at this level before and are classified as a home/EU student. Students then only begin repaying the loan once they are earning £21,000 a year – an unlikely situation for many pensioners. The loan is written off after 30 years.
Obviously that rule about loans being to study at a higher level than studied before - see Ganesh's comment, and the quote above - would rule easy access to a loan out for some people, but I'm guessing a lot of the people with the most to gain won't have had any sort of higher education; the "higher education participation rate" in the UK was below 15% until the 1990s.
Update: Here's a 2013 Telegraph article which includes the text "could a student loan be the ultimate freebie for pensioners?" (although the rest of the article is more about getting "free tuition" rather than "free money").