Disadvantaged Students £1200 Poorer
The Office for National Statistics calculates inflation to be the highest in 40 years. Without a sufficient rise in maintenance loans, students from low-income households could be some of the country’s worst affected.
The Russian invasion of Ukraine and the fallout from the COVID pandemic have been the two main factors contributing to this unprecedented rise in inflation. Companies have been forced to hike their prices in response to increased energy costs and shortages of goods and materials. Although this has pushed up the cost of living, this rise has not been paralleled with an adequate increase in wages.
However, it’s not only workers who have been affected. University maintenance loans have only increased by a meagre 2.3%, well below the predictions of a 12% interest rate calculated by the Office for National Statistics last week. This cut in loans will see the poorest students £1200 less well off in the upcoming academic year. Combined with food prices at a 14-year high, rent increases and extortionate fuel bills, this will leave some poorer students to face extreme economic pressures. Many less privileged students do not receive financial support from family members and are left with no choice but to rely on demanding additional employment.
Not only will this have a disproportionate effect on current university students from poorer backgrounds, but there is also no doubt that this inadequate government support will also discourage prospective students. For many, this real-term cut to maintenance loans will make university completely inaccessible. Alternatively, many young people will judge that it is most advantageous to go straight into employment, at great detriment to social mobility.
Last week, the Government announced it will reduce student loan interest rates of recent graduates by 1%. This plan falls short in adequately supporting both graduates and current students; the latter of which will not be affected by this reform at all. Government support will be essential during the upcoming recession, and students should not be excluded. An initial demand should be to increase student maintenance loans to be in line with inflation.
It is especially frustrating to know that while most of the population is struggling, buy-to-let investors, private equity investors and fuel companies are making extortionate profits. In its last quarter, BP’s profits were an eye-watering $8.45 billion. Fundamental changes have to be made. But in the meantime, students should not be punished.
According to the Institute for Fiscal Studies, the real-term value of Government student support is now the lowest in seven years. This has come alongside a hike in living costs, as the price of rent, food, travel, and energy bills have all increased. For students from low-income backgrounds, this will be extremely worrying, many of which already juggle stressful working hours with their studies.
Image Credit: Student Journey – University of Sunderland
