Cost of living boost for students

11 Jan 2023 01:12 PM

Financial package to help students with living costs and a further freeze on tuition fees.

• Multimillion pound package to help students cover living and other costs.
• Tuition fees frozen for next two years to reduce student debt levels
• Measures are part of government’s drive to support households with the cost of living

Students in need are to benefit from additional financial support designed to ease cost of living pressures and help them to meet everyday costs whilst they are completing their studies.

In recognition of the challenges some students have faced due to the global rise in inflation, the government has announced today (11 January) that it will provide an additional £15 million in hardship funding this financial year so that universities can provide extra support to students that need it most.

It builds on the significant £261 million that the government has already provided to the Office for Students (OfS) for the 2022/23 academic year which universities can draw upon to boost their own hardship funds.

Universities are responsible for ensuring students who need help get the support they need, including through their own hardship funds, or through bursaries and scholarships. Many universities have stepped up their efforts this year offering innovative schemes to support their students. Examples include:

• The University of Southampton which has made a total of £1.1 million in the current academic year available to students to cover emergency costs,
• Queen Mary University of London which has a bursary scheme automatically provided to any domestic undergraduate from a family whose annual taxable income is below £20,000, and
• The University of York which announced that £150 would be given to student households who are finding it difficult to pay their bills as part of a £6 million package to support students most in need.

The government has also confirmed today that loans and grants to support undergraduate and postgraduate students with living and other costs will be increased by 2.8% for the 2023/24 academic year.

Minister for Skills, Apprenticeships and Higher Education Robert Halfon said:

University is an investment, setting students up for future success, helping them to climb the ladder of opportunity and gain invaluable skills for the world of work.

We recognise students continue to face financial challenges, which is why we are increasing loans and grants for living and other costs for a further year.  For the sixth year in a row, we have frozen tuition fees for a full-time undergraduate course at a maximum of £9,250 which will reduce the initial amount of debt students will take on.

To support universities to top up their own hardship funds we are also making an additional £15 million available. This will bring the total available to universities to draw on in supporting their students in hardship to £276 million this academic year.

I’m really pleased to see that so many universities are already stepping up efforts to support their students through a variety of programmes. These schemes have already helped students up and down the country and I urge anyone who is worried about their circumstances to speak to their university.

For the sixth year in a row, the government has confirmed it will freeze tuition fees for a standard full-time course in the 2023/24 and 2024/25 academic year in England at a maximum of £9,250. This move will help provide better value for students by reducing the initial amount of debt students will take on.

The government regularly monitors the interest rates set on student loans against the interest rates prevailing on the market (PMR) for comparable loans. The government confirmed that the maximum Plan 2 and the Postgraduate loan interest rate will be 6.5% between 1 December 2022 and 28 February 2023.

From the 2023/24 academic year, the government will cut interest rates for new students to RPI only so that, under these terms, graduates will not repay more than they originally borrowed, when adjusted for inflation.

Additional information

• Student renters who pay their energy bills directly to a domestic supplier also benefit from the scheme that discounts £400 from their bill over six months from October.
• The Energy Prices Act passed on 25th October includes the provision to require landlords to pass benefits they receive from energy price support, as appropriate, onto end users. Further details of the requirements under this act are set out in the legislation.
• Students whose bills are included in their rent, including energy charges, will typically have agreed their accommodation costs upfront when signing their contract for the current academic year. Businesses, including those that provide student accommodation, are covered by the Energy Bill Relief Scheme which provides energy bill relief for non-domestic customers in Great Britain.
• The amount borrowed has no impact on monthly repayments for student loans. Monthly repayments will not increase for students if they take out more maintenance loan. Monthly repayments are linked to income, not the amount borrowed.
• A graduate with a plan 2 loan on a salary of £28,000 this financial year, 2022-23, will repay around £5 a month.  A graduate with a plan 2 loan on a salary of £30,000 this financial year will repay around £20 a month. And a graduate with a plan 2 loan on a salary of £35,000 this financial year will repay around £58 a month.