University students left with '£24 a year to live' as 'almost all' of their maintenance loans are spent on rent

Students in England are spending nearly all of their university maintenance loans on rent, leaving some with just £24 a year to live on, new research has revealed.

According to a report by charity Unipol and the Higher Education Policy Institute (Hepi), the cost of student accommodation has soared by nearly 15% over the past two years, with the average annual rent in England now standing at £7,566.

Meanwhile, the average annual maintenance loan across the country - which students can receive on top of a tuition loan to pay for the cost of living - is estimated to be £7,590, meaning some have just £24 a year, or 50p a week, to cover their essentials, never mind going out or enjoying activities with friends.

Even for those entitled to the maximum maintenance loan amount of £9,978, (those whose families have annual household earnings of under £25,000), the proportion wiped out by rent still stands at more than three-quarters, despite it generally being accepted that rent should account for one third of your income.

Unipol and Hepi said it is generally expected that those who do not receive enough to pay for rent, bills, food, and other costs will be helped by their families, but warned that this is often not possible - especially with households across the country continuing to be squeezed by the ongoing cost of living crisis.

The dire situation has led to students often being forced to take desperate measures, the organisations added, such as illegally doubling up on rooms, skipping meals, taking on more paid work than they have time for, or even avoiding university altogether because it has simply become unaffordable.

Martin Blakey, the charity's chief executive, described the student finance system as "broken", branding the current maintenance loan as merely a "contribution" to living costs rather than something that covers them. He insisted the government must deliver "affordable accommodation" as a matter of urgency.

Victoria Tolmie-Loverseed, assistant chief executive, added that the "alarming" figures demonstrate how student housing has "reached a crisis point in affordability", with rents rising but real-terms support from the government "stagnated".

She also warned that "decades of progress in widening participation in higher education" could be undermined if the "crisis" is not tackled. This, she said, is because students from poorer backgrounds may have to forego university due to the cost, while students from middle-income families could be forced to take on unsustainable debts.

There is also the danger of students hindering their studies, according to Chloe Field of the National Union of Students (NUS), as many are forced to take on more paid work than their timetables allow for - leaving them [effectively] attending university part-time".

Published on Thursday (26 October), the report focused on student rental markets in 10 major regional university cities outside London and Edinburgh. It discovered that students in Bristol pay the highest average annual rent outside the capital - £9,200 - which is up by 9% since 2021.

Bristol is followed by Exeter, where the average annual rent is £8,559, and not far behind is Glasgow - where costs stand at £7,548. Glasgow also had the sharpest increase in rental costs, at an eye-watering 20.4% over two years. Next was Exeter at 16.1%, and in third place was Nottingham, at 15.5%.

Nick Hillman, director at Hepi, said the government must take three courses of action:

• In the short term, maintenance loans should be "increased at least in line with inflation"
• In the medium term, ministers should rebase maintenance support using the evidence gathered in the soon-to-be published Student Income and Expenditure survey
• And in the long term, "measures [need to be introduced] to encourage the supply of new student housing, which is currently restricted by factors such as higher interest rates and confusion over new regulation"

In a statement, a spokesperson for the Department for Education said: "Our student finance system ensures that the highest levels of support are targeted at students from the lowest-income families. However, if students are worried about their circumstances, we urge them to speak to their university.

"Many universities are doing a brilliant job to support students who are struggling financially through a variety of programmes. To support universities to help their students we are making £276 million available this academic year, which institutions can use to top up their own hardship schemes. This is on top of increases to student loans and grants."