Taken for granted? Reforming student maintenance

In higher education policy, most of the political and media focus in the last two decades has been on fees. From the mass protests in the early 2010s, to the 2017 Labour election promise to abolish tuition fees entirely. However, student maintenance, the money students have available to them for day to day living costs, gets much less attention. But maintenance support is what makes the biggest difference to students pockets. With fees in England covered fully by loans, maintenance levels are what determines where students can afford to live, if they need to take on extra paid work, how much they can engage with extra-curricular activities, and for some students – whether they can go to university at all.  

Today’s new report, the next in our series of General Election briefings, looks at how the student maintenance system has changed over time, including new evidence on student spending and the sufficiency of maintenance support, particularly for young people from lower income families. It also looks at several options for reform, including costings based on new economic modelling work undertaken by London Economics for the Sutton Trust. 

During the ongoing cost of living crisis and recent high levels of inflation, student maintenance loans have failed to keep up with rising costs, creating a major crisis for many students.  

Students living away from home (outside of London) who are eligible for the maximum level of support only have access to £9,978 per year. However, Sutton Trust research has found the average student in this group spends £11,400 per year on essentials, far higher than the maximum loan. Essential costs are higher than the maximum loan for 57% of students, and for 19% of students, housing costs alone are higher than the available loan. While better-off families may be able to make up the difference, those from the poorest homes simply will not be able to go to family for financial help.  

This is having a real impact on students, with 28% of undergraduates having skipped meals to save on food costs, a figure which is even higher (33%) for students from working class families. Others have had to take on extra part-time work, with almost a quarter of students reporting they had missed a course deadline because of a job. The university experience of many is being severely impinged, with potentially long-term consequences. 

Despite the huge challenges facing students, for 2023/24 academic year, maintenance loans in England have only increased by 2.8%. This compares to a 11.1% increase for the worst-off students in Scotland, a 9.4% increase for all undergraduates in Wales, and a substantial 40% increase in Northern Ireland (albeit from a much lower base level).   

Looking forward to the 2024/25 academic year, students in England will be £2,000 worse-off than if rises in maintenance support had been in line with inflation since 2021/22. And as well as the level of maintenance not keeping pace with inflation, neither have the parental income thresholds used to determine when students are eligible for certain levels of support, with these levels long-term frozen. If these thresholds had increased with inflation since 2016, families on £32,535 or less would be eligible for the maximum loan, compared to the current much lower threshold of £25,000. This equates to around 30,000 young people per year locked out of higher entitlements. 

However, increasing maintenance loans on its own would only serve to further indebt the poorest students. England is also the only UK nation which currently does not offer maintenance grants. Since their abolition, students from lower income backgrounds have been leaving university with the highest levels of debt. New analysis in today’s report estimates that poorer students graduate with £60,100 of debt, 38% higher than the £43,600 for those from wealthier families. Students from disadvantaged backgrounds are also the most debt averse, with the risk that in the current system, poorer students will feel limited to options closer to home, or will be put off from attending university altogether. 

It is vital to accompany an increase in overall maintenance support with a re-introduction of grants, in order to provide students enough money to live, without exacerbating the existing debt inequalities. The government should also widen eligibility for support, by increasing the parental income thresholds used to determine the level of support, which have been frozen since 2008.  

We suggest a model which does all of the above, alongside changes to repayment terms to make the system more progressive, with higher income students paying back more than under current terms, and lower repayments for lower income graduates. Such a system would make £11,400 per year in maintenance support available to students from the poorest homes, £4,121 of which would be in the form of a non-repayable grant. This would cut the gap in debt between the poorest and richest graduates in half, extend eligibility for support to tens of thousands of students, and would come at no additional cost to the Exchequer. 

There is no excuse not to act to address this issue, and that’s why student maintenance is one of the Trust’s key policy priorities for the upcoming election.