Maintenance loans cover just half of student living costs, HEPI finds

The maximum maintenance loan in England now covers only half the cost of a basic standard of living for first-year students, according to new research by the Higher Education Policy Institute (HEPI).

The institute, along with TechnologyOne and the Centre for Research in Social Policy (CRSP) at Loughborough University, found that students need an average of £21,126 a year to meet minimum living standards, excluding tuition fees. The figure rises to £24,900 for students in London.

The report calculated costs using the Minimum Income Standard for Students, based on focus groups in university cities. It included both essential items and those needed to participate fully in student life.

Students living in purpose-built accommodation, such as halls of residence, face weekly costs of £260 excluding rent, rising to £418 when rent is included. First-year students face additional “first-year premium” costs, including laptops, kitchen equipment and expenses linked to freshers’ week and social integration.

Students in England receive a maximum maintenance loan of £10,544, which is available only to those from low-income households. The report found this covers just 50% of the average first-year student’s living costs.

The support shortfall is even greater for Scottish students studying in London, who receive no London weighting. Their maximum maintenance support covers just 46% of annual costs, leaving a shortfall of £13,500.

In comparison, students living and studying in Scotland have 59% of their costs covered, and those in Wales have 63% covered.

Across a three-year degree, students in England outside London will need around £61k to meet minimum living standards. In London, the figure rises to £77k. Including tuition fees, the total cost of a three-year degree can reach £90k in England and exceed £100k in London.

Even with maximum support, students in England must work more than 20 hours per week during term and holidays at the National Minimum Wage to meet the basic cost of living.

The report recommends redesigning student maintenance support to make it simpler, more transparent and adequate.

Josh Freeman, one of the report’s authors, said: “These findings demonstrate three serious risks to UK higher education: access to higher education becomes more unequal, the quality of the student experience suffers and the sustainability of the sector is put at risk.

“Too many students are struggling to cover their basic costs, let alone participate fully in higher education. It is not only good policy: there is a moral imperative to give students a fair chance of succeeding and thriving in higher education.”

Nick Hillman, director of HEPI, added: “It is regrettable that we have had to calculate these numbers as, in an ideal world, there would already be a deep understanding of the true cost of being a student in the corridors of power.

“Maintenance support is currently woefully inadequate, leading students to live in substandard ways, to take on a dangerous number of hours of paid employment on top of their full-time studies or to take out commercial debts at high interest rates.”