Maintenance loan only covers half of students’ real living costs

English students need to work 19 hours every week to cover their living costs even if they receive the highest level of maintenance loan, according to a new analysis that has estimated an undergraduate’s weekly outgoings at £366.

Researchers at Loughborough University worked with the Higher Education Policy Institute (Hepi) to establish, for the first time, a “minimum income standard” for students, using an approach that costs a basket of goods and services to determine how much money individuals need to ensure an “acceptable” standard of living.

Focusing on second and third years who rent privately, the study published on 9 May finds that, as a baseline, students need £366 a week, that figure dropping to £244 when excluding rent.

Campus resource collection: Helping students through the cost-of-living crisis

In London, where rents are higher, this rises to £21,774 annually, with the rest of the UK needing £18,632 a year.

It means that a student from England who is studying outside London and receiving the maximum maintenance support has only enough money to cover 55 per cent of their costs and must make up a shortfall of £8,405 a year to reach their minimum income standard.

Those from Wales, where maintenance loans are more generous, would still need to find £6,482, while for Northern Irish students the gap is £10,496.

An English student receiving the maximum loan would therefore have to work nearly 19 hours a week on minimum wage to cover all their living costs, the study finds, above the 15 hours many universities recommend as a maximum for those studying full-time.

Someone receiving the minimum loan who does no paid work would need to rely on their parents or other sources to contribute £13,865 a year to cover living costs, a figure one of the report’s authors, Hepi’s policy manager Josh Freeman, described as “astonishing”.

He said it had long been known that the level of maintenance support in all four UK nations “has not been set based on a coherent understanding of what students need” and the project sought to redress this by putting a figure on this amount.

The minimum income standard was “not just about survival”, he said, but was enough to ensure a student could “fully participate in the higher education experience” and access all the opportunities available to them.

Students were currently in a “dire situation”, said Mr Freeman, who worked with Katherine Hill and Matt Padley from Loughborough’s Centre for Research in Social Policy on the study.

“We know that when the cost of living bites it is social and extracurricular activities that go first, and only after that do they start to spend less time studying,” he added.

“So the main impact is on student social life, and I think that is really sad. It is such an important part of the higher education experience.”

The report recommends that the maximum level of government support available is increased in all four UK nations to help students, but Mr Freeman said it was unrealistic to expect all of the shortfall to be covered by increased funding, and some paid work might be necessary. 

Any rise in maintenance support could be covered by an increase in the real interest rate for students who take out loans, the report says, but this would need to be balanced with the introduction of grants for poorer students.

The report also says parents should not be expected to contribute to a student’s living costs unless their income was above their own minimum income standard, currently £40,600.

tom.williams@timeshighereducation.com