Student living loans to rise by 2.5% - but Martin Lewis warns of 'real term' cut

30 January 2024 , 15:03

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Martin Lewis is founder of MoneySavingExpert.com (Image: Ken McKay/ITV/REX/Shutterstock)

Maintenance loans for English university students will rise by 2.5% from September, it has been confirmed.

For someone living away from home, the maximum loan will be £10,227 - or for those living away from home and studying in London, the highest amount you can borrow will be £13,348. If you’re studying but still living at home, the total figure will increase to £8,610.

Maintenance loans are designed to help students cover day-to-day living costs, such as rent or food, while studying. But despite the increase confirmed this week, MoneySavingExpert.com founder Martin Lewis has pointed out that students are actually experiencing a "real terms cut" because rates have not kept up with inflation.

Consumer Prices Index (CPI) inflation - which is a measure of how prices of goods and services have changed over time - is currently at 4%. For the 2023/24 academic year, students got a 2.8% rise even though inflation was in double digits at the time, at 10.7%.

Figures highlighted by MoneySavingExpert.com show the maintenance loan for someone studying away from home should be £11,492 if the increases had kept up with inflation, or £14,998 for someone living away from home and studying in London.

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Martin said: "This is another nail in the coffin of student finance. Too much of the media and political focus is on tuition fees. In fact, they're not a problem for students, they're an issue for graduates once they leave. Having enough money to pay the rent and bills is a problem for students. The system has long been creaking. I hope this latest cut doesn't make it finally crack."

The MoneySavingExpert.com founder has previously highlighted how many parental guardians don’t realise the value of the maintenance loan their child can get is dependent on family income. This means the higher their income is, the less students can get as a loan - or sometimes a grant - to cover costs.

The theory behind this is that parents are expected to plug this financial gap - but Martin argues this isn’t made clear to mums and dads. Martin has written to ministers to urge them to stop “hiding” university parental contributions and even claimed this can cause a bigger financial burden than paying off tuition fees.

Levi Winchester