Impact of increases in the cost of living on further and higher education students

Cost of living pressures on higher education students

The 2023 Save the Student survey found:

• The average student’s monthly living costs have increased by 17%, up from £924 in 2022 to £1,078.
• 18% of surveyed students have used a food bank in the last academic year, up from 10% who said the same in 2022.
• 22% of surveyed students said they often skip meals to save money, while a further 42% said they sometimes do.

In February 2023, the Office for National Statistics (ONS) reported 92% of students had experienced higher living costs compared to last year, and 91% were “somewhat or very worried” about rising costs. The ONS also found a third of surveyed students had taken on more debt, cut back on meals, and were using university spaces as ‘warm banks’ to try to limit their outgoings.

Are current levels of student support sufficient?

Over half (58%) of respondents to the ONS’ Student Cost of Living Insights Study said their student loans did not cover necessary costs, and one in four (25%) said their loans only just covered their living costs.

In 2022/23, student maintenance support did not rise in line with inflation across the UK. For the 2023/24 academic year, Northern Ireland has increased maximum student maintenance loans by 40%, Wales by 9.4% for undergraduate students, and Scotland by 11.1% for the worst-off students. In England, maintenance loans and grants have increased by 2.8% for the 2023/24 academic year.

According to the Institute for Fiscal Studies (IFS), real terms cuts to student support since 2020/21 in England will have left the poorest students around £1,500 worse off. The IFS has identified several problems with the way maintenance loans are calculated for students in England that have meant support has not kept up with inflation due to “large stealth cuts”.

Firstly, the parental earning threshold below which students are entitled to the full maintenance loan has been frozen at £25,000 since 2008. Secondly, annual increases in maintenance loan levels are determined by inflation forecasts made years before actual inflation is known, but there is no mechanism to adjust increases if there are forecast errors.

Calls for more support for students

The National Union of Students (NUS) has called for the Government to introduce a “tailored student cost of living support package”, while universities have called for an “immediate” increase of maintenance loans in line with inflation, and the return of maintenance grants in England.

In March 2023, a report by the All-Party Parliamentary Group for Students called on the Government to:

• Provide further hardship funding through universities that targets those most in need.
• Increase student maintenance loans to restore the real value of support, and maintain that value going forward.
• Base future student loan increases on more recent inflation forecasts, and adjust increases when actual inflation levels are known in the following year.
• Consider re-introducing means-tested maintenance grants in England.
• Increase the lower household income threshold for the maximum student loan, which has been frozen by successive governments since 2008.

Cost of living issues facing further education students

According to a report on cost-of-living pressures in further education (PDF) produced by the All-Party Parliamentary Groups (APPG) for Students and Further Education and Lifelong Learning, further education students are facing similar financial pressures to higher education students, with increasing costs in food, energy bills, transport, rent and living expenses.

The report found further education students were working excessive hours alongside their study to support their families as well as themselves. A report published by the Campaign for Learning in October 2022 (PDF) said students were dropping out of college to pursue full-time work as a result of financial pressures.

Further education colleges have reported increasing numbers of students are using colleges as ‘warm banks’, walking several miles to school because they had used their transport bursary on energy costs, and staying in college longer to ensure access to food. Student safeguarding issues have also become more common, with more students unable to live at home due to domestic abuse stemming from financial pressures, and more students at risk from criminal exploitation.

Are current measures sufficient?

The 16-19 bursary fund was introduced in 2011 to replace the Education Maintenance Allowance (EMA). The APPG report on further education and the rising cost of living said the bursary fund was less than a third of the EMA budget and had stricter eligibility criteria than the EMA allowance.

The APPG report also said funding for further education providers has been reduced, so students have less access to bursaries and other forms of financial support. At the same time, the demand for bursary support from students has risen.

Calls for more support for students

Various recommendations to alleviate the impact of the cost of living on further education students have been made, including increasing funding for colleges, more flexibility with bursary eligibility, extending free school meals and free travel eligibility, and keeping colleges open outside of term time.