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It’s time for maintenance support to catch up with inflation

  • 17 January 2024
  • By Tom Allingham

Inflation has affected all corners of society to some degree. But few groups have been hit quite as hard as students – a demographic that, for the second year in a row, has seen its living costs rise at well above the national average rate of inflation.

This is to be expected. It is widely acknowledged that lower income households experience a higher-than-average rate of inflation, as they spend a greater proportion of their income on the goods and services that see the biggest increases in cost.

Around the UK, the maintenance loan has, to varying degrees, always tended to fall short of living costs. Indeed, Save the Student’s National Student Money Surveys have consistently found the shortfall to be at least £200 per month.

But over the past few years, this gap has more than doubled, from £223 per month in 2020, to a startling £582 per month in 2023. Coupled with rising rents, students are now left with 50p per week after paying for their accommodation.

These stats come as no surprise to anyone with even half an eye on the levels of student funding in the UK. Year-on-year increases to maintenance packages for the 2022/23 academic year were, at best, 4.5 per cent in Scotland and, at worst, 0 per cent in Northern Ireland. All of this during a year where inflation peaked at 13.9 per cent, and never fell lower than 7.8 per cent.

The impact has been devastating. The 2023 National Student Money Survey found that 18 per cent of respondents had used a food bank in the 2022/23 academic year – almost double the 10 per cent who reported the same in the previous survey. Similarly, 22 per cent said they often skip meals to save money, with an additional 42 per cent saying they do so at least some of the time.

To their credit, the devolved Governments in Northern Ireland, Scotland and Wales all increased maximum levels of student funding by substantial margins for 2023/24. There is always more that can be done, but these are clear signs that those in power recognise the issues facing students and are willing to take action.

The same cannot be said for the English Government, which pushed ahead with a 2.8 per cent increase in the maximum maintenance loan. This figure represents a projection of inflation – an increasingly unfit-for-purpose metric, perhaps better suited to more stable economic times.

As a result, the Institute for Fiscal Studies says that students are now up to £1,284 per year worse off in real terms, compared to if funding had kept up with inflation. And it is students from the poorest families that find themselves at the thick end of that scale.

Worse still, because each year’s maintenance loan rates are calculated as a percentage increase on the previous year, this inflation shortfall risks becoming a permanent fixture of the system. In other words, even if inflation remained low for decades to come, and was correctly forecast by projections, these substantial real-terms cuts would remain, unless corrected.

It is to that end that Save the Student has started a petition for the Government to increase funding to catch up with inflation. It is vital that this campaign succeeds, and to do so, it needs support from people across higher education and beyond – not just from students.

Some would argue that students should look to alternative sources of income to make ends meet. However, this is not always possible.

Take parental contributions, for instance. Of course, some parents can give their children the financial support they need. But the cost of living crisis means that others will be less able than ever to fund their child’s education, at the exact time that support is needed the most.

Or how about part-time jobs? If a student is able to find suitable, flexible work, and is studying a course that allows the free time, then this can certainly help. But what about the students who do not want to work so many hours that it is to the detriment of their studies? Or cannot spare any time at all? Or can, but simply cannot find the work in their area? Clearly, it is not a one-size-fits-all solution.

What is more, the majority of the Government’s extra cost of living support funding has been off the table. With the exception of the £400 energy discount – which itself alluded many students – the funds have broadly only been accessible to those claiming some form of benefit. Full-time students, usually being ineligible for benefits as they are, have not been covered by this support.

And while few would argue that benefits or State pension payments could fund an opulent lifestyle, it is certainly notable that the Government has continued to use actual rates of inflation – rather than insufficient projections – to increase both payments.

Without intervention, the maintenance loan will continue to fall drastically short of living costs and students will suffer the consequences. For all of these reasons, plus countless more, it is crucial that the Government takes heed of this campaign.

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