Study shows gap between student support and living costs

The maximum level of government support should be increased in all four UK nations to help students reach a minimum income standard, according to a new report.

The report claims to show, for the first time, how much students need to have a minimum acceptable standard of living, and highlights the stark gap between that minimum income standard (MIS) and the maximum government maintenance support for students’ living costs.

The shortfall is £8,405 (US$10,514) for English students, £6,482 for Welsh students, £7,232 for Scottish students and £10,496 for Northern Irish students.

Even a student doing 10 hours a week of paid employment for the whole year and in receipt of the maximum maintenance support will not have enough money to reach the MIS.

English students must work nearly 19 hours a week at minimum wage, Welsh students more than 14 hours, Scottish students 16 hours and Northern Irish students 23 hours to reach the MIS.

By contrast, many universities recommend students should work no more than 15 hours during term-time.

The report, A Minimum Income Standard for Students, was published on Thursday 9 May by the Higher Education Policy Institute and TechnologyOne, who both partnered with the Centre for Research in Social Policy (CRSP) at Loughborough University to develop the Minimum Income Standard (MIS) for students.

Vivienne Stern MBE, chief executive of Universities UK, said: “Our current students are the next generation of teachers, doctors, nurses and scientists, and it is clear many are struggling to keep up with the cost of living.

“Students have different sources of funding to support their time at university, from parental support, earnings from term-time and summer jobs, and maintenance loans for those who qualify.

“While universities do all they can to support students, the maintenance package is falling short and has not kept pace with inflation.”

‘Groundbreaking’ findings

Chloe Field, vice-president for higher education at the National Union of Students, said the report is “groundbreaking” and yet echoes what the student movement has been saying for the past 10 years since the government took away student maintenance grants in 2015.

“After a decade of the poorest students graduating with the highest debt, it is clear that the current funding model for education is broken and needs urgent repair,” she said.

“Student poverty has curtailed the aspirations of young people in this country. The image of students partying all the time, skipping lectures for hangovers isn’t true: we simply dream of a world where we can commit proper time and energy into our studies and can afford to spend time with our friends,” she noted.

She said the upcoming general election was an “opportunity to change all this”.

“We expect to see not only manifesto commitments to uprating maintenance funding and the reinstating of maintenance grants but also action on this in the first 100 days of a new government,” she said.

The report says government maintenance support should not cover all students’ expected costs as students can reasonably be expected to commit to around 10 hours of paid work per week, which is “roughly equivalent to working full-time over the summer holiday”.

Adjustments should be made for students who cannot work due to high workloads, because they have a disability that prevents them from working, or for other reasons, the report recommends.

Cost of living crisis

The report was published in the context of a growing ‘cost of learning crisis’ profoundly affecting UK students.

Over many years, HEPI has highlighted the financial strain faced by students in higher education.

The 2023 HEPI-Advance HE Student Academic Experience Survey found that, for the first time, a majority of students (55%) do paid work during term time.

In September 2023, HEPI research found that more than a quarter of universities (27%) operate a food bank to support students through the UK’s cost-of-living crisis.

And in October 2023, HEPI and student housing charity Unipol published evidence showing that student accommodation rents rose by nearly 15% each year over the last two years. Rent now takes up almost 100% of the average maintenance loan, leaving students with just 50p a week to spend on other costs.

But despite calls for a ‘reset’ in government maintenance support – the money provided by the UK countries to support students with their living costs while studying – there has been relatively little action, the report says.

How much students really need

The report underlines that a reset should be based on “how much students really need” and sets out to establish that level of need.

Based on focus groups with students situated across the UK, the authors of the report constructed and costed a minimum basket of goods and services to develop an estimate for how much students need. The result is an estimate of what students need to participate fully in the world around them.

The findings were developed for second- and third-year undergraduate students in private rented accommodation. These figures are a common baseline for all students, but the income needed may vary in some cases, particularly with costs such as rent and utilities which students may have relatively little control over, and for students in different types of accommodation.

The report finds that excluding rent, students need £244 a week to have a minimum acceptable standard of living. Including rent, students need £366 a week.

Adjusting in line with rent prices in different parts of the UK, it is estimated that students need £18,632 a year outside London and £21,774 a year in London to reach the MIS.

For those studying outside of London, the maintenance support in England covers just 55% of the MIS. The Welsh maintenance support covers 65%, Scottish support covers 61% and Northern Irish support covers just 44% of the MIS.

For students studying in London, the gap is £8,426 if a student is from England, with the loan covering 61% of students’ costs. The gap is £6,604 if they are from Wales (support covers 70% of costs), £10,374 if they are from Scotland (support covers 52%) and £10,922 if they are from Northern Ireland, where support covers just 50% of students’ living costs.

The report warns that parents should not be expected to contribute to their children’s living costs unless they have a minimum acceptable standard of living. “This means the household income threshold at which parents are expected to start paying should be increased,” the report recommends.

Currently this stands at £25,000 (US$31,000) in England, £21,000 in Scotland and £19,203 in Northern Ireland (parents are never expected to contribute in Wales).

Necessities for student life

Katherine Hill, research fellow at CRSP and a co-author of the report, said the research sets out what students themselves feel is required to participate in university life.

“Things like a laptop and mobile phone were seen as vital for studying and accessing uni accounts, and the students we spoke to emphasised the importance of being able to socialise, join university clubs or societies and go on course trips – as these are crucial to feeling included in the university experience,” she explained.

She said the cost of a shared TV as a cheap form of entertainment, or a few cushions and plants, were also seen as important to make their private rented accommodation feel more like a home.

“However, over half of the minimum student budget covers rent and food at home – costs which are unavoidable. Students, like others, have faced increased costs of living, and those we spoke to recognised the pressures of juggling their finances alongside studying, worrying about money and having to work (more),” she noted.

She said the MIS describes a level that enables a student to meet their needs and feel included in university life, and provides a useful starting point in thinking about how their needs can best be met at this important stage of life.

Josh Freeman, policy manager at HEPI and a co-author of the report, said: “Though we have known for some time that student maintenance is inadequate across the UK, the size of the gap is striking. It is time for a rethink of student maintenance support.”

He said the report is very clear that it does not expect the government to cover all students’ costs.

An ‘unsustainable’ situation

“In most cases, it might be reasonable for students to do some paid work. But the current situation, where many students have to work 20 hours or more to meet their costs, is unsustainable.

“Similarly, while it may be reasonable for some parents to contribute, the current expectation is highly demanding,” he said.

Leo Hanna, executive vice-president, UK at TechnologyOne, said the report paints a bleak picture of financial assistance falling short, which “hinders academic performance and leads to attrition”.

“Government policies that help alleviate such financial pressure have a significant part to play. As part of their duty of care to students, universities also need to make sense of a multitude of data points stored across disparate systems to monitor student wellbeing.

“But the current departmental, siloed approach and disparate software systems limit their ability to spot patterns or behaviours that, if caught early, could change the trajectory of a student,” said Hanna.

He said digitally ‘smart solutions’ providing real-time, data-driven insights can better support the administrative and pastoral needs of universities and their students.