Up to 25 per cent of university students may have received grants intended for those from poorer families because their parents are divorced or separated.
According to a report in The Guardian, the Student Loans Company does not consider the income of divorced non-resident parents when assessing students for grants and loans, nor does it count child support payments made to the parent with care.
Consequently, if the resident parent has a low income beyond any child support they receive, their children will qualify for low income grants., which are worth several thousand pounds per year, even if their other parent is wealthy.
The anomaly has been criticised by Labour MPs, the paper reports. Frank Field said the situation could discourage separated parents from getting back together or remarrying.
“I believe this creates a moral hazard. I will be asking [the Department for Business, Innovation and Skills] why it has penalised…parents in this way.”
His colleague on the Labour benches, John Denham MP, added:
“There has been a longstanding anomaly in which the number of people getting full student grants looks much higher than the number of people from low-income families going to university.”
A spokesman for the Department said ministers believed it would be too costly and legally impractical to oblige non-resident parents contribute to their children’s upkeep while at university.