Is the student cost-of-living crisis affecting social mobility?

Recent reports have noted a decline in higher education participation, especially among poorer students. Toby Whelton, IF volunteer, argues this can only be understood as a result of the skyrocketing costs of being a student.

The story of social mobility so far 

Despite the many issues and critiques of universities and the wider higher education system, one success story that is little contested is the progress made on improving social mobility. New Labour famously pledged that half the population should be able to afford to go to university and 20 years later this was achieved. Every year countless higher education institutions are quick to flaunt an uptick in students from underrepresented backgrounds.

However, recent research has contradicted this narrative of the opening of higher education to all. Those from the poorest background are still severely underrepresented, there has been negligible improvement over the last decade and the situation appears to be getting worse.

Why the decline?

While doubtless a product of many factors and kinds of government policy failings, there is at least one clearly identifiable cause – the astronomical cost of being a university student. Slashed maintenance loans, sky-high student housing costs and the axing of maintenance grants at a time of high inflation and a cost-of-living crisis has meant many students are near impoverished, with reports of 1/5 of students using foodbanks.

The fact that current students are living in these dire conditions should be enough of a concern to policymakers, but also alarming is that this is deterring prospective students who (perhaps rightly) believe that they can no longer afford to go to university. If substantial action is not taken, university could once more become the preserve of the affluent.

My teaching experience 

The impact rising costs are having on young prospective students was only brought to my attention in my role as a teacher. A capable student of mine mentioned they and their parents were hesitant about university, due to the enormous costs it now involves. Wanting to investigate this further, I organised interviews with eight A Level politics students to learn more about their perceptions.

All but one of the students I spoke to reported fears and anxiety around affording the costs of university. Some even cited the experience of older siblings as evidence of their view. Fortunately, none were put off their university aspirations entirely, yet just under half said they intended to live at home due to financial reasons. Even if the costs of university were not completely deterring these students, it was still limiting the choices and the opportunities they have.

Country-wide trend 

A recent report from UCL demonstrates that my anecdote is not unique; one third of the 2023/24 cohort are reported to be attending a university close-by, with the main justification being costs and finances. The study showed poorer students in particular are more likely to be discouraged from living-out for university. Meanwhile, a 2023 survey of 11–17 year-olds found that the proportion of students concerned about the cost of living had increased from 17% in 2014 to 29% in 2023.

The poorest are affected

For many, financial strains are not just deterring students from living-out, but from going into higher education entirely. Only 1/4 of pupils in receipt of free school meals (FSM) go on to higher education by age 19. This percentage is even higher in historically disadvantaged regions.

Since 2010/11 there has been a stagnation in social mobility improvements and in recent years there has even been a decline. The latest cohort of 2023/24 students saw an unprecedented drop in university admissions for disadvantaged pupils, the biggest decline since the 1990s. Without government intervention, there is a real possibility this statistic will continue to freefall.

The decline of student maintenance support 

The primary cause of the current student cost-of-living crisis is the cut in maintenance loans. The loans are available to all UK students to support their living costs with the precise amount varying by parental income. Students with higher-earning parents receive less under the expectation that parents will supplement any shortfall, while children of lower-earning parents are meant to be supported completely.

However, real-term cuts due to inflation and a faulty policy has meant maintenance loans have been slashed. Instead of maintenance loans rising in line with actual inflation, they are instead adjusted by a prediction of inflation (RPIX). This means that in 2022/23 maintenance loans rose by a predicted 2.3% instead of the actual rate of inflation which was 9.2%. As a result of inaccurate forecasts, since 2020/21, students are £2,000 worse off, that is £100 worse off each and every month for the poorest students. These cuts will remain embedded unless direct action is taken. Let alone a triple-lock, student support’s singular lock is faulty and not fit for purpose.

Inflation is also a double-whammy as not only is the amount received less in real terms, but it has also contributed to fiscal drag. That means that while parents’ wages may have increased, that wage increase could take them into higher-earning tax bands which have been frozen for over 5 years, thereby delivering an effective stealth cut. Furthermore, the threshold for a maximum maintenance grant, then loan, has been frozen since 2008 at £25,000, which today is equivalent to £32,535. Fewer students are receiving the full amount, yet the number requiring it has not changed.

It is little wonder then why over half of students work 15+ hours a week at a part-time job, with nearly a quarter working full time alongside their studies just to make ends meet. The difference between the maximum maintenance loans versus a National Minimum Wage salary of a 22 year-old is set to balloon to £2,000, the highest it has ever been. For some, this opportunity cost makes university unjustifiable.

Student housing

In addition to receiving far less, the costs for students have never been higher. Student housing has increased by 15% in the last year. Every year there are various student housing horror stories, such as Bristol students relocating to Newport for cheaper rent or Durham students camping-out at estate agents just to guarantee housing. Unipol found that on average 50p a week is left over once housing costs are subtracted from the average student’s maintenance loan, hardly enough to live on.

An unequal student loan system 

Not only are poorer students less supported whilst at university, but they are set to take on far more graduate debt compared to their wealthier peers. Recent reports have found that while students from wealthier families take on £43,600 of debt, poorer students graduate with £60,100 of debt, a whopping 38% more. This is not to mention the 10% of students who are not even in the system, not taking on any student debt, their fees paid upfront and their living costs covered by the Bank of Mum and Dad.

With students from poorer families more likely to be debt-averse, this further deters students from pursuing higher education. The bargain at the heart of the current English funding model – the idea that students are charged some of the highest tuition fees in the developed world on the premise that everyone can still participate – is partially defunct. High tuition fees are a barrier to social mobility, not a solution as some have argued.

Lack of political action

The current conditions for students are grim, with record lows of support at a time of record high costs. The impact this is having for generational and social mobility has been grossly overlooked. There are worrying signs that the current student finance system is deterring disadvantaged young students from applying, with universities in danger of becoming more and more socially exclusive. Despite all this, the current student cost-of-living crisis and the affect this is having on the younger generation’s opportunities has been absent in the political debate from either major political party.

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Photo by Kenny Eliason on Unsplash