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Paying for university in the UK – How are students coping?
The rising cost of living is putting pressure on university students in the UK. Can universities help release some of the pressure before students begin to turn their back on higher education?
By Julia Gilmore
Rising tuition fees for both domestic and international students are significantly affecting students’ ability to pay for university study in the UK, creating both long and short-term challenges for students and universities alike.
As universities raise fees and the cost of living crisis deepens, students are exploring different ways to finance their education, such as loans, scholarships, part-time work and frugal living. However, trends are beginning to show that increased costs associated with university study are putting off potential students applying for university altogether, creating more financial pressure for an already struggling higher education sector.
“Before Brexit, EU students paid the same fees as domestic students, but now they must pay international rates, leading to a sharp decline in EU student applications to UK universities.“
What factors are contributing to rising costs for students?
In the UK, tuition fees for domestic students have been capped at £9,250 per year, but international students often face much higher costs, with fees reaching up to £38,000 per year for certain courses like medicine or engineering. The introduction of these high fees for international students, especially post-Brexit, has significantly impacted students’ ability to afford university, particularly those from the European Union.
Before Brexit, EU students paid the same fees as domestic students, but now they must pay international rates, leading to a sharp decline in EU student applications to UK universities, according to data from the Higher Education Statistics Agency (HESA). Even more worryingly for students, the new Labour government are considering raising annual tuition fees to £10,500 in line with inflation, despite previously pledging against a price hike.
The global cost of living crisis is also affecting students greatly, with the most recent ONS Student Cost of Living Insights report finding that 92 percent of university students reported their cost of living rising in comparison to the year prior. Concerningly, the same report found that around half (49 percent) of students identified as having financial difficulties, with 16 percent classing them as ‘major’ financial difficulties.
A 2023 report by Loughborough University calculated that the average student in the UK needed £18,632 per year outside of London and £21,744 in the capital to cover non-tuition fee related costs such as rent, travel, food, study materials and socialising. This ‘Minimum Income Standard’ (MIS) is significantly higher than the maximum government maintenance support provided to help students with living costs, currently capped at £13,348 for students in London and £10,227 for students outside the city.
The ONS’ Student Cost of Living Insights report reflected Loughborough’s findings, with nearly 6 in 10 (58 percent) of students receiving a maintenance loan claiming it did not cover their living costs, while one in four (25 percent) said that it covered their living costs but only just. As these loans have not risen in line with inflation, students are struggling to make up the shortfall – or reassessing their decision on whether or not to attend university at all.
How are rising costs affecting students’ decisions about attending university in the UK?
Attending university represents a significant financial output for students and is one of the major factors prospective students considering when deciding if higher education is the right path for them. Even for existing students, rising costs may be preventing them from completing their studies, with almost one in five students in an Office for Students 2023 poll indicating that they had considered dropping out university or college due to cost of living increases.
The most recent QS UK Domestic Student Survey highlighted that concerns about finances are one of, if not the most, important considerations for students going into higher education. A third of prospective students in the survey reported feeling either ‘extremely’ or ‘very’ concerned about the cost of living and paying for everyday expenses while at university, with 38 percent of prospective students stating that they were less likely to attend university based on the costs involved – a 4 percent jump from 2021.
This is, obviously, worrying for universities themselves with regards to their financial future. If applications dwindle, it will decrease the income stream from tuition fees – something that is particularly concerning in the case of international students, who pay far higher fees than domestic candidates.
Recent Home Office figures show a sharp decline in international students applying for courses in the UK, with a 15 percent drop in sponsored student visa applications since July of this year. This can be partly attributed to the previous Conservative government’s strict visa legislation, but we are seeing evidence that the higher cost of living in the UK is becoming an increasing concern for international students. In the most recent QS International Student Survey, cost of living was reported as the biggest worry for prospective overseas students (69 percent).
What routes are students taking to help pay for university?
Students in the UK are employing various strategies to fund their university education as rising costs continue to strain their finances, from taking on part-time work or making lifestyle changes, to, more concerningly, taking on significant debt on top of existing government loans. Although less common than in countries like the USA, some universities and external organisations offer scholarships to academically gifted students in a range of disciplines.
The primary route for many is student loans. Maintenance loans are the most common form, but these are often insufficient. Save the Student’s National Student Money Survey found that, out of those questioned, average student living costs were £1,104 per month, but the average maintenance loan for English students was equivalent to around £600 per month in 2023/24. This leaves a loan shortfall of £504 a month, so it’s unsurprising that in the same survey, 58 percent of students said this loan was not enough to live on.
To bridge this gap, many students turn to part-time employment. Research conducted by The Sutton Trust indicates that two thirds of students undertake some form of paid work in a typical week in the academic year, with 6 percent working over 30 hours per week - nearly the equivalent of a full-time job. Whilst many students are able to balance their part-time work alongside their studies, The Sutton Trust nevertheless reports that around half (49 percent) of undergraduate students have missed classes in order to do paid work, with 6 percent reporting this as a frequent occurrence.
Unfortunately, some worrying trends are emerging in terms of students having to make significant lifestyle cutbacks to afford day-to-day life at university. This can range from being unable to join societies or social events to save money, to more serious sacrifices. A 2023 survey by Russell Group universities Students’ Unions found that 25 percent of students regularly go without food because they cannot afford it, while Save the Student found 18 percent of surveyed students used a food bank in the last academic year.
Students are also taking on more debt to fund living costs, in addition to existing student loans. This is usually in the form of credit cards or overdrafts, with 30 percent of students surveyed in the ONS’ Student Cost of Living Insights report admitting to taking on additional debt to support themselves.
The ‘Bank of Mum and Dad’ is often cited as a way for students to help fund their universities studies, disproportionately affecting lower income students and keeping them out of university. The Sutton Trust found that 48 percent of students turn to parents and other family members for financial support, however, for students from lower socio-economic backgrounds, this is less of an option, with lower proportions of working-class students receiving additional support from their parents (38 percent vs 48 percent for middle class students), or other family members (9 percent vs 12 percent).
It's not all doom and gloom, however, with hopes that a renewed education policy at the hands of a Labour government will help students with their university education. The most significant policy change is the proposed reintroduction of student grants to help with living costs which, unlike the existing loans, don’t need to be repaid. This would help to encourage students from lower-income backgrounds to apply for university with fewer fears about the debt they might accrue.