Eligibility criteria for student loans ruled discriminatory and unlawful

Yesterday the Supreme Court decided that the settlement criterion for eligibility for a student loan in certain cases contravened the European Convention on Human Rights and was therefore unlawful.

Under the Education Student Support Regulations, in order to qualify for a student loan a student must (a) be resident in England when the academic year begins (b) have been lawfully ordinarily resident in the UK for 3 years before then; and (c) be settled in the UK on that day.  “Settled” for these purposes means without any restrictions on the period of time the student can remain in the UK.

The question for the Court was whether criteria (b) and/or (c) were in breach of Article 2 of the First Protocol of the Convention or alternatively was unjustifiable discrimination in the enjoyment of that right on the grounds of the Claimant’s immigration status contrary to Article 14 of the Convention. The Court concluded that criterion (c) was unlawful in the case before it.

The Claimant had been resident in UK for over 12 years, initially as a dependent of her international student father (who left UK in 2003), and then as an "overstayer" with her mother. This was not picked up by the UKVI until 2012 when she was given discretionary leave to remain in the UK until January 2015, subsequently extended to April 2018. This was an immigration status that permitted her to work, use public services and claim benefits. She cannot be removed from the UK unless she commits a serious crime. In 2018 she will be eligible to apply for indefinite leave to remain and there is every reason to expect she will be granted it. At that point she will undoubtedly be “settled”. There are apparently a further 2000 odd individuals in an analogous position, and so the case has wider application.

The Claimant went to school throughout her period in the UK, did well and applied to University. When the time came, she applied for a student loan (without which there was no prospect of her being able to fund her studies) only to find that her immigration status rendered her ineligible for a loan.

The Court found that the principle of extending student loans to settled students had the legitimate aim of restricting access to limited public finances to those who were in the best position to make a significant economic contribution, i.e. those who intended to and were entitled to live and work in the UK.

However, the Court found that the policy as adopted did not necessarily achieve that aim, because the Claimant's status also indicated an intention to and an entitlement to live and work in the UK. There was no justification for adopting an "exclusionary bright line" between those who were settled, and students in the Claimant's position. There were other criteria that could be adopted to exclude those where there was more of a risk that they would leave the UK without contributing sufficiently for the state to recoup its contribution to their education. Finally, the harm done to people in the Claimant's position in terms of an enforced delay in their education until they secured indefinite leave to remain outweighed any benefit to the state in delaying access to funding    

The Court therefore concluded that the settlement criterion contravened the Claimant's Convention Rights. It did not however declare the Regulations incompatible, but rather issued a declaration that it would be unlawful for the Secretary of State to deny this applicant a student loan. The Secretary of State must now devise more careful, tailored criteria to avoid breaching the Convention Rights of other applicants.

Smita Jamdar 
Partner and Head of Education
T: 0121 214 0332 
E: smita.jamdar@shma.co.uk
W: www.shma.co.uk

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