Poorer students face losing £1,500-a-year in 'woefully inadequate' loan rise
Poorer students face losing out on £1,500-a-year in financial support under a below-inflation hike to maintenance loans.
The Department for Education (DfE) announced that tuition fees for degrees in England will be frozen at a maximum level of £9,250 for the next two years and maximum student loans for living costs will rise by measly 2.8% in 2023/24.
There will also be a £15 million hardship fund this financial year, which would break down to around £10 per student.
The increase in maintenance loans was branded "disappointing" and "woefully inadequate" for hard-up students who face spiralling cost of living pressures, as inflation outstrips support.
The Institute for Fiscal Studies think-tank said the DfE's attempts to frame the announcement as cost of living help for students was "at best highly misleading".
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It comes after university leaders warned that students could abandon their degrees unless they get immediate help to cope with soaring costs.
Student loans are being frozen but maintenance loans are being outstripped by inflation (Getty Images/iStockphoto)The Russell Group, which represents some of the most selective institutions in the UK, said it was "disappointing" that the Government had "failed to deliver a meaningful increase" to maintenance loans despite warnings that students could be left £1,500 a year worse off.
Dr Tim Bradshaw, chief executive of the Russell Group, said additional assistance was "urgently needed", adding: "Without it, we are concerned this will have an increasing impact on students' studies and wider mental health and wellbeing."
He added: "It is disappointing that the DfE has failed to deliver a meaningful increase to maintenance loans or take the opportunity to address some of the flaws in the forecasting process to ensure they keep up with rising costs, despite warnings that students would be left £1,500 worse off next year.
"Reversing the real terms cut in the value of the loan since 2020/21 would be a simple fix that would provide much needed immediate support for living costs and would be paid back by the student."
Education Minister Robert Halfon set out the details today as he confirmed that student loans were being frozen for the sixth consecutive year.
He said: “We recognise students continue to face financial challenges, which is why we are increasing loans and grants for living and other costs for a further year.
"For the sixth year in a row, we have frozen tuition fees for a full-time undergraduate course at a maximum of £9,250 which will reduce the initial amount of debt students will take on.
Education Minister Robert Halfon (PA Archive/PA Images)“To support universities to top up their own hardship funds we are also making an additional £15 million available. This will bring the total available to universities to draw on in supporting their students in hardship to £276 million this academic year."
But IFS economist Kate Ogden pointed out a number of holes in the plan.
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She said: “The government’s framing of this announcement as a ‘cost of living boost for students’ is at best highly misleading.
"Maintenance loan entitlements will still be much lower in real terms than in 2020/21 in both this and the next academic year.
"At around £10 per student, the one-off additional hardship funding this year is a drop in the ocean.
"The continuing freeze in tuition fees, which was already announced in February last year, does not help students with their living costs at all and in fact squeezes the finances of the same universities that the government expects to step up support for students.”
Chloe Field, of the National Union of Students, said: "The 2.8% increase in the maintenance loan for 2023/24 is woefully inadequate and will leave students over £1,500 worse off than they would have been if student support was tied to inflation.
"If maintenance support continues to lag behind inflation, the number of students in poverty is only going to increase."
She welcomed additional hardship funding but warned it was a "quick fix to a long term problem".
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