The Department for Education (DoE) have released details of financial support for students in light of the ongoing cost of living crisis.

Of note, the Government are providing an additional £15 million in Hardship funding to assist students facing financial difficulty, which is in addition to the £261 million hardship fund boost already provided to the Office for Students for the 22/23 academic year. Alongiside this, other measures announced include:

  • Loans and grants to support undergraduate and postgraduate students with living and other costs will be increased by 2.8% for the 2023/24 academic year. However, this is significantly short of the current rate of inflation of 14%, and does not represent a real-terms boost to support

  • For the sixth year in a row, the Government has confirmed it will freeze tuition fees for a standard full-time course in the 2023/24 and 2024/25 academic year in England at a maximum of £9,250.

  • From the 2023/24 academic year, the Government will cut interest rates for new students to RPI only so that, under these terms, graduates will not repay more than they originally borrowed, when adjusted for inflation.

Despite this increase in funding, when looking at the distributive potential of the additional £15 million, relatively it works out to approximately just £8 per student. From data in the NUS/Unipol Accommodation Costs Survey 2021, taking rents in PBSA as an example, the cost is contiuing to occupy a growing proportion of the student loan. In 2011 - 2012 the average rent (outside London) accounted for 55 percent of the maximum loan, in 2021 - 2022 that increased to 72 percent, so for students from low-income backgrounds the money left to live on after rent is paid is decreasing year on year.

In England as a whole, the average maintenance loan actually awarded in 2020/21 was £6,860 and the average rent that year was £7,065. This meant that in reality the average loan did not pay for the average room in 2020/21. This further indicates that the maintenance loan system is becoming increasingly detached from the actual costs of attending University, not only affecting living standards but restricting student success and attainment.

It is clear that there are significant gaps in ensuring all students who need support recieve adequate financial assistance, with much support currently focused on those who recieve the maximum student loan amount. A recommendation from the report advocates for targeted financial support to assist with affordability:

"It now appears to be easier and more effective to target the student with financial support rather than the property infrastructure at a lower rent. All providers should consider offering bursaries for students from means-tested backgrounds, as well as finding metrics to deal with students from ‘squeezed middle’ households, where multiple children are at university at the same time"

It is likely there will be more students struggling financially during the 2023/24 academic year, with rents significantly outstripping student income, and the impacts of rising energy costs and inflation due to affect rental costs more acutely. In light of this, PBSA providers and landlords alike may want to consider the role they can play in responding to this, with options including showing flexibility on contracts, rental payments and offering some direct financial support. 

Full details of these measures outlined by Government can be found on the UK Government website.