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6 April 2022

UK students set for largest-ever drop in living standards

Students starting courses this year face a real-terms cut in support of 7 per cent.

By Ben van der Merwe

Students beginning courses in September are set to see a real-terms cut in maintenance support of 7 per cent, the largest yet in a single year.

The government is increasing maintenance support by 2.3 per cent based on last year’s inflation figures. With retail prices expected to rise by 10 per cent over the year to September 2023, however, the increase will still leave students with a 7 per cent cut in spending power, according to research by the House of Commons Library.

That cut comes in addition to the continued freeze of the income threshold required to qualify for the maximum maintenance support. The threshold is £25,000, but by the end of next academic year that will be equivalent to £23,982 in today's money, a 4 per cent real terms cut. When threshold has been frozen since 2008, when it was equivalent to £36,000 in today’s money -- meaning a fall of 30 per cent, adjusting for consumer price inflation.

With inflation at its highest level in decades, the government has been under growing pressure to tackle the cost of living crisis. Benefits have similarly been pegged to last year’s inflation figures, a decision expected to result in a real-terms cut of 6 per cent to Universal Credit, Job Seeker’s Allowance and Carer’s Allowance.

The government is also considering restricting access to student loans based on A-level and GCSE grades. The New Statesman estimates that the proposed rules could prevent up to 55 per cent of GCSE students from disadvantaged backgrounds accessing student finance, and at least 77 per cent of Gypsy and Roma children.

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Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
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