New student maintenance loans will fall short of average rents

Thursday, February 1, 2024

The government has just announced that loans will rise by 2.5% from September. This has been called a real-terms cut by experts including Martin Lewis, as it fails to keep up with inflation, currently at 4%.

But this doesn’t paint the whole picture: StuRents data shows that student rents across the UK are set to be up more than 9% YoY for the 2024-25 academic year.

The attached spreadsheet shows the picture across the country. Some key points:

  • The median national household income, according to ONS, is £35,000. With a family income at this level, students would be entitled to a loan of £8,766. This gives a weekly budget of £169. With the average cost of a room in a student HMO now £132/week, and average utility bills of £23/week per person, this leaves the average student with just £14 per week left for all other living expenses.
  • With a household income of £45,000, the maintenance loan students are entitled to is £7,304. This falls short of the average rent and bills by £15 per week.
  • With a household income of £70,000 – i.e. two parents earning £35,000 – a student is entitled to just £4,767 per year in maintenance loan. This would leave a shortfall of £63 per week on rent an bills, without covering any other living expenses such as food, travel, study resources and entertainment.
  • StuRents data shows the picture in student cities across the UK – the attached spreadsheet has data on Manchester, Birmingham, Nottingham, Leeds, Coventry, Sheffield, Liverpool, Newcastle and Leicester.

Richard Ward, Head of Research at StuRents, said:

“The government’s announcement of a 2.5% rise in maintenance loans for 2024-25 will offer little comfort to students facing an ongoing cost of living crisis. Although inflation is trending back down, rent - by far the biggest expenditure in a student budget - is more expensive than ever, currently up more than 9% compared to last year.

The average maintenance loan now barely covers the average rent, and many students will be paying significantly more for accommodation than they receive in their loan. There is a real risk here that students who can’t rely on parents and guardians for financial support will simply be priced out of university.”