Students worst-hit financially in years and cost of living support ‘won’t help most’, charity warns

University students are financially the “worst-off they have been in years” due to the ongoing cost of living crisis and need proper government support.

Despite the rising costs of energy bills and soaring rent prices, government proposals to alleviate the financial burden “will not help most students” this winter, a mental health charity has warned.

Jennifer Smith, Student Minds policy manager, said that students “deserve better” and stressed that they shouldn’t have to struggle with financial difficulties alone.

It comes as new analysis warns almost 300,000 students will be gravely impacted by the cost of living crisis if financial support is not introduced.

The report by MillionPlus, the Association for Modern Universities in the UK, recommends immediate increases to student maintenance grants, hardship funds and better inclusion of students in wider cost of living support measures announced in September.

‘Students need better financial support’

Ms Smith said student’s mental health has already suffered over the course of the Covid pandemic and now the cost of living crisis has made the situation even worse, with students currently in their worst financial position in years.

She explained: “Economic troubles over the last few months have worsened the situation even further, and as student finance maintenance funding has not risen in line with inflation, students are, financially, the worst-off they’ve been in years.

“Compounding this with the pandemic, current students have not been dealt a fair hand, and deserve better support.”

StudentMinds is calling on the government to deliver a package of financial support “which is actually available to students”, and will help to tackle inflation and rising bills.

Ms Smith said that current government policies introduced to alleviate the burden of the rising cost of living “will not help most students”.

She said: “The cost of living crisis is impacting everybody in our society, but current policy proposals to alleviate the burden will not help most students.

“The majority of students, for instance, do not pay Council Tax, Income Tax, or National Insurance, which means they will not benefit from cuts in those areas, while still having to contend with rising energy costs, rent, food costs, as well as inflation and the weakened pound.”

Students don’t have to struggle alone

Ms Smith said financial difficulty can cause “considerable stress and poor mental health” and stressed that students don’t have to face it on their own.

Students who are struggling can seek support from Student Space, which is a free, confidential, and anonymous platform which offers direct mental health help through text, email, webchat, and phone.

Students can also get financial advice from their Student Union which will be able to offer professional, expert, and independent guidance. Students can also seek help from university’s financial support teams who can help with hardship funding and grants.

In addition, those with a mental health condition or disability may be eligible for Disabled Students’ Allowance to help fund equipment, non-medical helpers and travel expenses that they need for their course.

Ms Smith added: “For money advice and support, we recommend students reach out to their advice service or advice centre in the first instance. Independent charities such as StepChange can also help students who are dealing with specific challenges, such as debt.

“What we want students to know is that they don’t have to struggle with financial difficulties alone.

“There is nothing shameful or wrong with you if you are struggling. Sometimes we don’t know how much help is available, and so it’s worth reaching out for support early, as you may be surprised what you can get.

“Staff in student services, financial hardship teams, and mental health workers, are discreet, non-judgemental, and professional, and are there to help you.”

Calls for better government help

The report by MillionPlus recommended immediate increases to student maintenance grants, hardship funds and better inclusion of students in wider cost of living support measures announced in September.

Rachel Hewitt, chief executive of MillionPlus, said students come from a range of backgrounds which impacts the type of support required, as not everyone can rely on their parents for financial help.

She said: “We must challenge the narrative that all students are 18-year-olds and are able to rely on parental support; increasingly with household budgets being squeezed this is not a lived reality.

“For mature students, those who are from low participation areas, first-in-family or commuter students, the cost of living crisis seriously risks forcing them out of higher education and damaging their future prospects.”

She added: “Maintenance loans have also not come close to rising in line with inflation, meaning they have now fallen to a lower level than the national minimum wage. If the UK government does not address the financial challenges ahead for students this academic year, it risks a student recruitment and retention crisis which could have a long-term damaging impact on its own education and skills agenda.”

Meanwhile, the Scottish government’s higher education minister Jamie Hepburn described the report as “extremely concerning” and said it “reinforces the urgent need for the UK government to properly address the cost of living crisis.”

Mr Hepburn pointed to the Scottish government’s £16 million payment in hardship funding to colleges and universities for the current academic year to support higher and further education students in financial hardship - and the payment of almost £3 billion to help households face the increased cost of living.

He added: “And just this week, the Scottish Parliament voted to pass The Cost of Living (Tenant Protection) Bill, which gives ministers temporary power to cap rents for private and social tenants, as well as for student accommodation.”

In response, a Department for Education spokesperson said: “To support students with living costs, we have increased maintenance loans every year, meaning disadvantaged students now have access to the highest-ever amounts in cash terms.

“Students who are worried about making ends meet should speak to their university about the support they can access.

“This year universities can boost their hardship funds by drawing on up to £261m we have made available through the Office for Students.”