Universities on Wednesday criticised the scale of a government increase in support for student living costs in England, calling it “disappointing” as it failed to keep pace with inflation.
The Department for Education announced that maintenance loans — the main source of government assistance for undergraduates and postgraduates — would in 2023-24 increase by 2.8 per cent. It also said it would provide an additional £15mn to “ease cost of living pressures” for students.
But experts said the increase in maintenance loan funding did not go far enough against the backdrop of high inflation, and would add to the difficulties of students already squeezed by the cost of living crisis.
Following the 2.8 per cent uplift, undergraduates living outside London will receive a maximum maintenance loan of £9,978 next academic year — for those in the capital, that rises to £13,022.
They will also benefit from new hardship support money, in addition to £261mn already announced by the government. Tuition fees will remain frozen at £9,250 for the next two years, which was previously announced last spring.
However, with the price of goods rising fast, the maintenance loan increase amounts to a real-terms cut. In November, inflation stood at 10.7 per cent after slipping back from the 41-year high seen in October.
The Russell Group of research-intensive universities said that if maintenance loan funding had increased with inflation since 2020-21, then next year’s annual allowance would be £11,500.
Tim Bradshaw, chief executive of the Russell Group, said it was “disappointing” that the government had failed to “address some of the flaws in the forecasting process to ensure they keep up with rising costs”.
Tom Allingham, money expert at advice website Save the Student, said the increase was a “devastating blow to struggling students” that would intensify their “battle” with living costs.
Maintenance loans are linked to inflation and partly means-tested, with those claiming the full allowance required to declare their household income.
However, the rise in loan support is calculated based on projections by the Office for Budget Responsibility, a public body monitoring government finances. For the past two years, inflation has outstripped the OBR’s projections and the rise in maintenance loans.
The Bank of England estimates that inflation will stand between 5.2 and 5.9 per cent in September, when students will receive their loans.
Ben Waltmann, an economist at the Institute for Fiscal Studies think-tank, said the announcement meant that real-terms cuts to student hardship support since 2020-21 would become “baked-in”.
Though it welcomed the £15mn boost, the National Union of Students said the maintenance loan increase was “woefully inadequate”.
“If maintenance support continues to lag behind inflation, the number of students in poverty is only going to increase,” Chloe Field, NUS vice-president, said.
Robert Halfon, minister for higher education, said the government recognised “students continue to face financial challenges”.
“I urge anyone who is worried about their circumstances to speak to their university,” he said.
Source: Economy - ft.com
