Inflation has hit students hard: Here’s what you need to know about fees, loans, living costs… and budgeting

Tuition fees, accommodation costs and other essentials like textbooks mean going to university can be an expensive affair.

Fees are now up to £9,250 per year, and living costs can reach as much as £30,000 over the three-year period.

Now students are facing an even bigger battle as inflation continues to stay high, making it harder to live on a budget.

We look at whether the maintenance loan provided by the Government is enough to cover costs, how students can budget and what parents can do to help. 

Students are being hammered by inflation as the cost of essentials like food remains high  

Are students being hit the hardest by inflation?

July’s inflation reading shows that while inflation has eased to 6.8 per cent, it remains well above the Bank of England’s 2 per cent target.

The price of essentials like food and housing is still high for the majority of Britons, and while wages might be growing the cost of living is still high.

For students it is even higher, as the price of university essentials remains astronomical – and while some workers might get a pay rise, students can’t simply negotiate an increase in their student loan. 

The latest ONS data shows that the price of food and non-alcoholic beverages rose again last month, albeit by 0.1 per cent, compared with a rise of 2.3 per cent over the same period last year.

It means the price of groceries is still 14.9 per cent higher than a year ago.

The good news for students is that the price of essentials like milk, bread and eggs is starting to slow. The price of whole milk fell 5.8 per cent over the month, while bread, crumpets, pizzas and cereal all made the largest negative contributions in July.

The price of alcohol – another ‘essential’ for many students – remains largely the same as last year. The average pint of lager in a pub now costs £4.47, a rise of 47p or 11.7 per cent in a year, according to figures from the ONS. A pint of ale now costs £3.81 on average, an increase of 31p, or 8.8 per cent.

The price of wine and beer has risen slightly since last year, but this has been offset by a small fall in the price of spirits.

However, books and stationery have remained largely at the same level as last year, according to the ONS.

A survey by the Office for Students earlier this year found that 43 per cent of students have cut back on how much they spend on food. Over half have reduced how much they spend on takeaways and nights out.

Is the maintenance loan enough to cover costs?

The maintenance loan is the main source of income for the vast majority of students. The average loan is approximately £5,820 a year, according to Save the Student. 

How much a student gets depends on things like their household income, where they will be living while studying, and where in the UK they normally live.

The minimum loan on offer for students from England is £3,698, which is paid to students with a household income of £58,291 or more who will live at home during their time at university.

Students who are living away from home and in London, whose annual household income is £25,000 or less, will receive the maximum £13,022. Outside of London, those with the same household income would get £9,978. 

However, maintenance loans in England haven’t kept up with inflation. Tom Allingham, spokesperson for Save the Student said Northern Ireland, Scotland and Wales have all made efforts to increase theirs. 

‘In England, the loan will only increase by 2.8 per cent this year. That follows a 2.3 per cent increase last year. The long and short of it is that students in England will now be £1,500 worse off in a single year, in real terms, compared to before the cost of living crisis,’ he said. 

‘Thats £1,500 worse off than a time where the loan was already not enough.’

An ONS survey conducted in February found that of the 68 per cent of students receiving a student loan, 58 per cent said it didn’t cover their full living costs.

For most students, the maintenance loan will barely cover accommodation costs, let alone essentials like food. The average monthly rent for students is £535, which rises to £663 in London, while energy costs about £85 per month. For a year, this totals £7,440, almost double the minimum maintenance loan on offer.

‘The way the maintenance loan is calculated is that, if you don’t get the maximum amount, then whatever the gap is between the amount you get and the maximum loan offered – that’s what the Government expects your parents to provide,’ says Allingham.

‘The amount hasn’t gone down, it’s actually gone up. So parents are expected to contribute a little bit more each year compared to the previous year.

‘Some students aren’t allowed or are not able to work a part-time job because they don’t have the time, and even those with a part-time job are still struggling to make ends meet.’

Hard up: For many students, the maintenance loan does not cover all their costs, leaving them in financial difficulties 

The end of the bank of mum and dad?

Given the current student finance system uses a student’s household income to determine the amount they can receive in loans, it means parents are often expected to stump up extra cash.

For example, if you’re from England and live outside of London, you could receive a maintenance loan of £9,978 if your household income is £25,000 or less.

If, however, your parental income is £62,343 or more, the government will only offer you a £4,651 maintenance loan. They expect parents to stump up the remaining £5,327 to meet the maximum loan amount.

It means that the average student is reliant on parental support. A survey by Save the Student found that the average student receives £149.80 a month from their parents.

‘Parents aren’t immune from the cost of living crisis either though,’ says Allingham. ‘They’re just as vulnerable as anyone else. You’ve got a situation where parents are less able, or perhaps the least able they’ve ever been, to support their children at university, at the exact time that support is needed.’

What help can university students get?

There are some ways to help cut the costs of university.

The choice of university itself can have an impact on how much things like accommodation cost, although this isn’t usually a decision made by parents.

For example, London has the most expensive student rent in the UK, costing an average of £663 per month, over £100 more than the next most expensive region, Yorkshire.

Northern Ireland has significantly cheaper rent for students, costing an average of £319, according to Save the Student.

Students renting via private landlords usually pay less each month compared to those in private or university-run halls, with the average rent costing around £523 a month, compared to nearly £600.

Elsewhere, teaching your children to budget and finding the nearest discount retailer could go some way towards helping. 

Finding a good bank account is helpful because they often offer generous perks, such as an interest-free overdraft. 

However, students should be aware that these overdrafts will have a limit – often £1,000 in the first year – and they could be charged for going over that. 

Seven high street banks now offer students a £100 cash incentive to join, and Santander continues to offer a free four-year rail card.

> We’ve rounded up the best student bank accounts here

Allingham suggests parents and students also look at the accounts that have the biggest, interest-free overdraft.

‘In general life, it’s best to stay out of your overdraft and even as a student you ideally wouldn’t be in it, [but] it’s the safest and most easily accessible form of cash whilst you’re in university.

‘I’d say forget the freebie and look at the account that might give you an extra grand in an interest free overdraft. This will be a buffer, a safety net, that you might need when you get to the end of term and you’re running out of money.’

Finally, it is worth looking at any bursaries, grants and scholarships the university offers. There is an assumption that these are only offered to students from a low income background, or have excelled in a particular sport or subject.

But there are some more unusual grants and bursaries on offer. For example, the Vegetarian Charity offers grants for vegans and vegetarians aged 25 and under, worth up to £500.

And the Graham Trust Bursary Scheme offers students with the surname Graham who are attending university in the Glasgow area, up to £500.

This post first appeared on Dailymail.co.uk