The Office for National Statistics has published a study exploring the impact of the cost of living on students at universities in England.
Key findings showed:
– More than 9 in 10 (91%) higher education students reported that their cost of living had increased compared with last year, similar to adults in Great Britain (91%)
– More than 9 in 10 (91%) students were either somewhat or very worried about the rising cost of living
– Half of students felt they had financial difficulties, with 35% saying these were minor and 15% saying they had major financial difficulties
– 25% of students had taken on new debt in response to rising cost of living, including those who borrowed more or used more credit than usual. Of these, 66% reported they did so because their student loan was not enough to support their living costs
Myron Jobson, senior personal finance analyst at company interactive investor said: “Rampant inflation has taken the notion of cash-strapped students to a new level.
“For many students, the painful rise in the cost of living is an unwelcome distraction from their education and hopes of living their ‘best life’ at university have been compromised further by galloping price rises.
“The worry is the sheer scale of inflation will be a rude awakening for students – many of whom are managing their own finances for the first time.
The 2.3% increase in maximum student grants and loans for living costs isn’t going to cut it when inflation has hit double digits and is expected to remain high for some time.
“With the Bank of Mum and Dad also facing its own cost-of-living challenges, it can’t be relied on to offer financial support.”
Mr Jobson added: “The fact that one in four students had taken on new debt in response to rising cost of living, including those who borrowed more or used more credit than usual, is concerning.
“It could be a slippery slope into serious debt before establishing a financial footing for many students.
“No student should have to worry unduly about their financial situation while they are focusing on their studies, but the reality is a large number will need to work even harder to support themselves.”
Mr Jobson went on to say that the cost-of-living ‘squeeze’ will vary by living arrangement. For example, students living in shared accommodation are likely to be impacted more.
With the student residents having different numbers of electronics (from mobile phones to video game consoles), and shared amenities, it will become expensive.
Some house-share agreements include utility bills and others do not, so Mr Jobson said it is vital for students to check their tenancy agreements.
Mr Jobson continued: “Students, mature students or otherwise, with their own homes are likely to be impacted most.
“Rising prices are also a concern for those who are about to graduate.
“Graduates following the familiar pattern of leaving student accommodation to a form of private residence will have a host of costs to cover, including rent, rising food, and energy bills.
“As such, moving back to the family home is becoming more of a valid option for many graduates.”