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A shocking new report by Love2shop has found that the cost of living crisis is driving students into financial difficulty – and universities may soon pay the price.
You can download the full report for free here, but our research1 found that 57% of students – 1.6 million2 – were considering dropping-out of university as a result of rising living costs. If only 50% of those students go ahead and leave, universities will be facing lost revenue of around £40bn.
And it has already started. We polled 2,000 students across the UK and 68% said they knew someone who had already left university because of the cost of living.
“If this continues, we could see fewer students graduating and even more choosing not to continue into higher education,” said Love2shop Director of Business Development, Frank Creighton.
“The result could be a shortfall in critical areas like the NHS, where we may see fewer nurses qualify, and we could also see a brain drain in important sectors like advanced engineering, where students decide to study outside of the UK.”
The report also found that a further 55% – representing around 1.5 million students – responded to say they had used a food bank as they couldn’t afford to eat.
The figures are stark – 87% of students have skipped meals to save on food costs. And experts say the issue may even get worse, after recent research from economic consultancy London Economics found student loan reforms unveiled by government last year will only benefit the country’s best-paid graduates3.
The changes to the maintenance loan system mean graduates entering into lower and middle income jobs, such as nursing and teaching, face an increase in their total lifetime repayments of more than £30,000, according to the analysis.
Meanwhile, higher income graduates earning in excess of £51,000 a year will see their total repayments plunge by around £25,000, say London Economics’ experts, who have labelled the reforms as “deeply regressive”.
“It’s really worrying to see how many students are considering dropping out or have already left because of the devastating financial impact of the increased cost of living,” said Frank. “This should be a huge concern for universities.
“For many students this is their first time living independently away from home. They should be able to focus on their studies, not worry about skipping meals in order to pay their bills. This is also a potential problem for universities. Fewer students – or poor results due to the pressures students are under – will have a significant impact on university finances.
“It’s time to start looking at practical solutions across the board to help all students deal with these challenges.”
Despite all this, 64% of students responded to the survey saying they received no cost of living support from their university and only one-in-five (20%) say have been offered a financial incentive specifically linked to continuing their course.
Just 14% of students say they have received cost of living support from their university in the form of a voucher or gift card, yet 49% think universities could improve their support by doing so.
Love2shop already works with a number of universities to provide gift cards or contactless digital gift cards to offer students.
While the range of Love2shop physical and digital gift cards can be redeemed in more than one hundred high-street and online retailers, universities can limit the number available to ensure cost of living payments are only used with retail partners that specialise in essential items.
“This data indicates that while there is some support for students, they are still facing some severe challenges and difficult choices,” said Frank. “We need to consider a different way to support them that makes a real difference to students and is cost effective and secure for universities.
“Gift cards offer a practical solution. They allow academic institutions to support their students through these difficult times and ensure financial aid provided is spent on the intended necessities, be that food, clothing or textbooks. Our survey data shows students themselves would welcome this more secure, consistent approach to support.”
Download the full report now at www.appreciate.co.uk/love2shop-uk-student-cost-of-living-report-2023 or contact us on 0330 333 1201 or [email protected] to see how we can help your institution deliver a more effective emergency support programme.
Footnotes
1: Survey of 2,000 UK students conducted by Censuswide
