What are the effects of the rising student cost of living?

“The cost of living crisis has brought students to their knees, with almost a third living off £50 a month after paying rent and bills¹”. One of the aspects of the student crisis we’ve been talking about for the past few weeks is the financial problems students face. How does the rising student cost of living impact engagement and success? And how can we support students who are not able to afford accommodation or food?

How are financial problems affecting students? 

In January 2023, 47.1% of average household expenditure in the EU went towards the three expenses seeing the steepest increases: household, transport and food bills². This resulted in a deepening cost of living crisis. Almost one in three EU citizens were unable to face an unexpected bill in 2022, 1.3% more than in 2021.  

The cost of living crisis is forcing students to take on more hours of paid work. Most university students say it is negatively affecting their studies, and more than 50% of students need to work during term time to afford their studies.³

It also greatly impacts students’ wellbeing. 90% of students surveyed by the National Union of Students (UK) said the rising cost of living had negatively impacted their mental health⁴. Students said they worried about being able to eat, feed their family, and pay bills. Concerns about cost of living pressure are greater among older students, postgraduates and those who work or have caring responsibilities. 

According to the same source, money worries is the second most common reason for considering dropping out of university (52%), after mental health issues (60%).  

Some key stats about students’ financial situation in Europe 

• In Europe, an average of 25% of students experience (very) serious financial difficulties.⁵
• In France, 20% of students live below the poverty line.⁶
• In England, 49% of students have financial difficulties.⁷ 
• The average monthly student cost of living in the UK is £1,078. However, the average student only receives £496 a month from their maintenance loan⁸, which is not considered enough for 64% of students.⁹ 
• In Iceland, 71% of students are unable to fund their studies without a job.¹⁰

What can institutions do to support students?  

Here are some strategies and support mechanisms that institutions can implement to help students who have financial problems: 

• Offer a variety of scholarships and grants to help cover tuition fees, living expenses, textbooks, and materials.
• Maintain a dedicated financial aid office or team to guide students through the financial aid process. They can assist with applications for government aid, scholarships, and provide information on student loans. 
• Create emergency funds for short-term financial assistance to students facing unexpected financial crises. They can be used for essential expenses like housing, food, or medical bills.
• Give flexible payment plans for tuition and fees to ease the burden on students and their families.
• Provide financial literacy programmes with financial education workshops and resources to teach students how to manage their finances effectively. Topics may include budgeting or saving.
• Offer affordable and safe on-campus housing options, or collaborate with local housing providers to negotiate reduced rates for students.
• Establish food security programmes and food banks on campus for students in need.
• Create resource centres gathering information about available financial aid options, scholarships, and other form of assistance in one accessible location.
• Collaborate with local charities, NGOs and community organisations that provide financial support to students in need.

Do you want to know more about the student crisis? 

📢 Join our webinar on November 20th at 11am GMT. Together with our partner the University of Birmingham, we’ll talk about how to address this crisis and best support students during challenging times. Register here.

💡 For more stats and resources on the topic, visit our website.

¹ UCL

² Euronews

³ Student Academic Experience Survey 2023

⁴ UK Parliament - House of Commons Library

⁵ Higher Education Students’ Financial Difficulties

⁶ Euronews

⁷ Cost of living and higher education students, England: 30 January to 13 February 2023

⁸ Maintenance loans are designed to support students with living costs such as food, accommodation and travel (Staffordshire University)

⁹ Save the Student

¹⁰  Erudera