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What does the cost of living crisis mean for students?

7 April 2022

The current UK cost of living crisis is affecting everyone, and students are no exception. In this month’s episode of Accommodation Matters – hosted by Unite Students’ Higher Education External Engagement Director, Jenny Shaw – three experts share what the sector needs to know about the current situation, including our new survey data on the topic.

Listen to the episode now:


  • Vivi Friedgut, Founder and CEO of Blackbullion
  • Lynne Condell, formerly Manager of Student Money Advice at Liverpool John Moores University
  • Michelle Etchells, Head of Corporate Shared Services at Unite Students


Episode transcript

Jenny: The sharp rise in the cost of living is affecting all of us at the moment, from increased food prices to growing utility bills – but in the higher education sector, affordability has been a talking point for years since we moved away from maintenance grants, and followed by the rise in tuition fees.

Now the government response to the Augar Review has brought this into focus with changes announced to the loan repayment terms but, surprisingly, no response to the recommendations about maintenance support. Vivi, can you paint us a picture of the current financial situation for students?

Vivi: Thanks for mentioning maintenance support, because actually, the government isn’t focusing on maintenance at all and is rather talking about the student loan itself. Students are struggling – there’s no nice way to put it. Some of the statistics that we’re seeing shows that the number of students that were worried about their money at the height of Covid has actually remained static, even since lockdown. They feel they don’t have enough money to do what they need to do, and often the maintenance loan doesn’t even cover the basics of their spending.

That of course is then impacting on their mental health – almost 60% of students say that money impacts on their mental health, their ability to focus, their ability to look after their health, and their ability to achieve their grades. We are very concerned about the impact of money concerns as the cost of living increases.


Jenny: Thanks, Vivi. We’ve just shared the results from a student survey on this topic – Michelle, could you talk us through some of the findings of that survey?

Michelle: We surveyed 1,000 parents and 1,000 students, and there were some really interesting results. There are three key areas I’d like to highlight from the survey: firstly, the cost of living crisis is affecting most students and their parents. Two-thirds of students and nearly three-quarters (73%) of parents are extremely worried about the increased cost of living. This is leading to students taking on more part-time work to make ends meet, but the majority worry that this will affect their studies.

Nearly half (49%) of students actually work part-time. Among those that do work part-time, the majority (64%) work seven hours or more per week, and over half (61%) are concerned about the impact that a part-time job could have on their studies. Almost a third of those who work have to increase the hours they are working in order to stay financially afloat.

Leading on from the first two points, there are also concerning levels of impact on student welfare, and knock-on implications to university support services, with half the students saying financial issues are actually affecting their mental health.


Jenny: Thanks, Michelle – there’s a lot to go on there, and some similarities as well with what Vivi has shared. Lynne, does this resonate with what student finance teams are seeing up and down the country?

Lynne: Yes, it certainly does. The statistics, while shocking, are not surprising to student finance practitioners. I think it just reiterates the decline in students’ financial position, which started well before the pandemic. The difference is that, during the pandemic, universities got a lot of extra money from the government to support students and now they haven’t got that money. I suppose this just compounds the situation even more.


Jenny: Just as a follow-up to that, you talked about the decrease in funding compared to during the pandemic. Is that having an impact on universities’ abilities to provide services such as hardship funds and other support to students?

Lynne: I would say not at all. While the additional Covid money might not be there from the government, universities do have funds and they do have teams of staff that can support students – so they really can’t stress strongly enough that if students are having any worries at all, they need to seek help. Money, as we know, is the last taboo; people feel a sense of shame, and they worry about talking to someone about money. They think that they’re going to be criticized for their poor spending or their poor money habits. That’s not the case at all.

Universities have wellbeing teams and sometimes just talking about your situation helps, doesn’t it? I genuinely cannot stress enough: if students are concerned about anything, then they need to go and get advice. For example, you know we were talking about parents? If the parents have had a change in circumstances, it could well be that they can get your student finance reassessed. Really, the underlying message is: there is help available and it’s free and confidential. Students do need to go and talk to someone.


Jenny: I think that’s a really important message, Lynne – and an important one for accommodation teams as well, because often in accommodation, the person at the front desk or your cleaner can become someone that you trust. There’s a real role there to be able to say, “Look, it’s okay; go and talk to someone.” There is help there, isn’t there?

Lynne: Yes, absolutely.


Jenny: Now I’m going to ask this next question to both Lynne and Vivi because I know you both have your finger on the pulse of this, but are there groups of students that are particularly vulnerable to these changes? Vivi, can I start with you?

Vivi: Sure. Interestingly, the group that we are concerned about is actually female students. A survey that we put out earlier in the year shows that female students, in particular, have less money than the average male student does – yet the reported gap between how much they have and how much they need is actually significantly higher for female students than it is for male students, which is really interesting and something that we’re very much hoping to be digging in a little bit more, especially as we do see the cost of living start to hit.

Female students are more likely to get money from their parents and guardians, but it’s less money than male students tend to get. They’re less likely to engage in entrepreneurship and things like that in order to bring more money in, and they will suffer a lot more. They are reporting that they are suffering a lot more with their mental health and their ability to focus with their sleep and their relationships. We’re worried that female students seem to be having a slightly harder go of it when it comes to money on campus, which is somewhat counterintuitive.


Jenny: Yes, definitely; I wouldn’t have predicted that. Lynne, is that similar to what you’re seeing?

Lynne: I think from the government response to Augar, that there are a couple of really important things to highlight. The first thing is that most of the changes that they talk about do not impact on existing students. What we don’t want is students currently at university to start thinking that the terms of their loans are changing and panicking about it. They’ve got enough to think about at the moment with making ends meet, et cetera. I think that’s the first thing to think about.

The changes for the new borrowers, unfortunately, mean that everyone is going to pay back more and for longer. There aren’t really any winners, if we’re going to be brutally honest about it. One of the good things that we can pick out is the interest rate. New borrowers from 2023 won’t be charged interest in real terms – it will just be linked to the Retail Price Index.

I think the people that will benefit are those higher earners in the long term, the people that are going to leave university and go into those highly paid professions – medicine, veterinary roles, et cetera. They’re just going to pay back their loans as they would have done under the previous terms. It’s going to be low to mid learners that won’t benefit; without stereotyping, probably a lot of jobs employing females. As you said, Vivi, their salaries – often public sector jobs – will be capped so they’ve got no choice. They can’t shop around for a better salary if they’re going into healthcare or teaching. Ultimately, they’re going to pay back more and for longer.

I suppose, if we’re thinking about who will be most adversely affected, it’s the people that choose not go to university because of the negative publicity around these changes.


Jenny: Absolutely, yes. Thank you, Lynne – some really important points there about the impacts of the changes to the loan terms.

We’re going to drill in a little bit more to the cost of living changes that we’re starting to see at the moment. Michelle, I wondered if you’re seeing any trends across the country in terms of student financial behaviours or the queries that come through to your finance support team.

Michelle: Yes, there’s definitely an increase in finance-related queries from our students, with a large amount relating to how and when they can pay their rent. Many students didn’t realize that their maintenance loans are paid in actually three equal instalments. Generally, loans are paid in September, January, and April, but it can vary based on the university they’re at and the course they’re studying. Many students also expect their loan to be paid direct to the accommodation provider, but this isn’t the case. Students need to be mindful of this when budgeting.

At Unite Students, we offer the ability to align maintenance loans with rent payments to ease the debt worry for students, which is a key focus of ours. In the recent survey, 36% of students said they were not comfortable being in debt – and speaking to their accommodation provider can really help to reduce any fears.


Jenny: Again, I think that’s a really important point, isn’t it? That actually a message for students is: if you are getting into trouble in terms of your rent payments, just speak to someone.

One of the features that most purpose-built student accommodation offers is rent inclusive of utility bills. Now, that’s been contentious in the past, because perhaps it encourages overuse of utilities, perhaps it doesn’t teach students how to manage their bills. Now, suddenly, it’s quite a benefit, isn’t it? Lynne, I wondered if you’re able to comment on this, because there’s going to be quite a difference between students who have got an all-inclusive rent package and those who are paying their utility bills separately, isn’t there?

Lynne: Yes, absolutely. I think one of the many benefits to living in purpose-built accommodation is the security of everything being included. There’s no hidden surprises, which you might get if you are house sharing or living in private rented accommodation. I think never has this been more welcome than at the moment, because all householders – us included – are getting surprises every day about rising costs.

Some of the houses of multiple occupation [HMOs], so the traditional house-share, do have utility bills included too. While this is going to be a massive issue going forward, it’s not student-specific is it? We’re only just starting to see this trickle through. I think for students, the message has got to be, “If you’re not sure what’s included in your tenancy” – so if you’re not living in purpose-built student accommodation, check your tenancy agreement now because what you don’t want is to get to the summer and your landlord present you with a huge utility bill that you were not expecting. If you can’t find the tenancy, which is often the response you will get from students, then ask for a copy. Your landlord does need to provide you with a copy.

I think we need to remember that not all students live in HMOs and they don’t all live in purpose-built accommodation. These will be impacted on already. Mature students with their own homes, those living with the parents – the research that we’re talking about today talks about the financial pressures on parents. We have to remember, because of the way the student finance system works in England particularly, income of parents really does have a massive impact on how much students earn. Which is crazy, isn’t it?

I think what we need to say to students who are in their own homes or are feeling financial pressure – it’s going back to that earlier message that there is help available. If you’re in your own home and you’re having problems with your utility bills, speak to your utility provider. Lots of them have charities. Speak to your institution. A lot of them will have hardship funds.


Jenny: Yes, and there’s a very clear message throughout all of this, isn’t there? Which is if you do get into trouble or you see trouble ahead, do talk to someone about it. If you’re running accommodation, do encourage students to go and talk to someone.

One of the things that really stood out for me actually in the survey that we’ve just done is the breakdown of communication, in some cases between parents and students. Fear about worrying their parents and hiding debt from parents and worry about the impact it’s going to have on families. I don’t know if anyone wanted to comment on that.

Lynne: I noticed that in the survey as well. 29% of students were hiding debt from their friends and family, and 27% of parents were aware that their child was hiding debt. I think it’s actually aligned and if they could only talk to each other, I think it would be a completely different story.


Jenny: Again, there’s a message there for parents, isn’t there? Just to open up those channels of communication, address any fears that students might have.

Lynne: A lot of young people that I work with assumed that their parents would help them and it did cause issues in the family. Again, it’s going back to money being that final taboo, isn’t it? That you need to talk and if you can’t afford to help your children with money, then just be open and honest about it – ultimately, we’re all adults and it’s much easier to budget if you know what money you are going to receive, rather than get a surprise later down the line.


Jenny: Absolutely.

Vivi: I would concur with that completely. As a society in general, we’re never going to demystify money. Money is an incredibly intimate thing that people feel very strongly about. We need to give people the language to be able to approach us.

I think one of the most important roles that parents have in raising their young people is encouraging financial conversations. The younger you start, the easier it is; if you start having those conversations when the kids are little and you give them pocket money, then when you start to talk about budgeting as a teenager it’s not a new conversation – you’ve been having the conversation for years. Something that we’ve seen is that young people are scared to ask their parents because they know that their parents are under financial pressure, or it can be the exact opposite where they assume their parents are fine and will support them. Either way, that is simple miscommunication.

We need to give parents the language to have these conversations, start talking about money much earlier than when it’s needed, because having conversations under crisis conditions always makes for much more tense conversations. If it’s just part of your day-to-day conversation it doesn’t have that same burden as when suddenly you’re about to run out of money and you’re too embarrassed to say anything. That’s actually when crises happen.


Jenny: That’s really good advice. It’s interesting you should say that Vivi because I was going to ask you about whether this current rapid rise in the cost of living is throwing up the need for any additional skills.

Vivi: Yes – I’m obsessed with this subject. I think it’s an interesting question, because I don’t know if it’s new skills as much as old skills that people have forgotten. We need to talk about budgeting. We need to talk about risk behaviour, especially with the onset of things like cryptocurrency, NFTs, gambling, trading and things like that. These are all what I refer to as ‘your grandmother’s financial education’. It’s debt, it’s budgeting, it’s understanding risk, it’s learning how to cook. If you learn how to cook, you can help all sorts of problems. You’ll sleep better, you’ll make friends. There’s all of these old-fashioned money tips – let’s get back into having those conversations.

I am, however, concerned about tech-enabled convenience which I think is getting a lot of students into trouble. Ordering a Deliveroo instead of cooking a meal; getting an Uber instead of getting on a bus. We didn’t have these things at university, so we didn’t have an easy ability to get into catastrophic debt – you didn’t have access to credit in the same way, you didn’t have access to leverage in the same way. Actually, to your question, Jenny, we’re talking about very old-school money management, but facing a very new world.

This cost of living crisis, we’re only at the beginning of it. I’m an economist by trade. This is the start, this isn’t the end – but this is also nothing new. In 2008 we had 6% interest rates. This has been a historically low period of rates – most young people haven’t lived through anything different – but this is actually an unusual period. We need to start talking about this for the long term. This isn’t a six-month thing, this is likely to be with us for the next few years.


Jenny: Yes, and you say, it’s old news in a way and a familiar situation, but in quite a different world. You mentioned cryptocurrency – that was one of the stand-out findings of the survey as well for me, that a surprising proportion of students said they had dabbled in cryptocurrency, gambling, the stock market. All these different ways of making money that I think would probably would come under that heading of ‘risky behaviour’. Do you have any comment on that?

Vivi: Absolutely. It’s funny, I contributed a piece recently to a very well-known education publication. When we stated the statistics of the number of students using cryptocurrency, the editor sent it back to me and told me to fact-check it because it’s something like one in three students; it’s high. What I think is particularly interesting is that crypto isn’t going anywhere – again, something we all just need to acknowledge is that cryptocurrency is here and is going to be here until long after we’re all gone.

There is a very interesting gender differential in crypto; only 7% of women are trading in crypto, compared to 26% of guys. It’s almost four times as many men who are engaging in this incredibly risky, incredibly volatile behaviour, but that they see it as one of the only ways to make money and that’s part of again, a much broader issue. Crypto is here to stay and it is a challenge for student services and for money advisors for whom this is brand new stuff. We have to get on top of this as a community.


Jenny: Michelle, I think you’ve got the figures there for students specifically from our recent survey, in terms of cryptocurrency.

Michelle: From our survey, 10% of people are dabbling in cryptocurrency.


Jenny: Of course, the cost of living rises are having an impact on people who run student accommodation too. The increase in cost of utilities are going to be biting, but there’s also the need to support employees. Michelle, can you comment on this from a Unite perspective?

Michelle: Yes, no problem. At Unite, we are committed to supporting both our customers and employees through these difficult times. We’re really proud to be a living wage employer and have been since 2015. For our customers, we’re not passing on any additional charges for cost of living increases in this academic year or the next (2022/2023).

It’s really interesting, actually, because in the recent survey, 80% of students chose accommodation where bills were included and there were no additional costs. When a student signs up for a contract with us, that’s the price they’ll pay. We want to ensure that student living experiences are as stress-free as possible by reducing debt worries where we can.


Jenny: Yes, and, particularly that impacts on staff. I think we’ve just recently given a slight pay rise as well to living wage employees, is that right?

Michelle: Yes, that’s correct, yes. As part of the Living Wage Foundation, every year we increase it in line with that to make sure that we are a Living Wage Foundation employer.


Jenny: Lynne, what impact is this having on universities?

Lynne: Obviously, universities are not exempt from the cost of heating, staff costs, pension increases, the freezing of the tuition fees for at least the next two years. It’s obviously going to have a squeeze on what’s going on in universities. One of the other announcements is around student number control. Again, that is going to be a concern for a lot of universities so there’s tough times ahead for all of us I think.


Jenny: Yes, it certainly feels that way, doesn’t it? I’m just going to move on now to talk about part-time work, because this is something that’s come up in our new survey as well. We first saw it last year in our applicant survey, and about half of those who responded said that they were interested in taking up part-time work. It looks like it’s just over half that are working part-time at the moment in our most recent survey, and some of them have said they’ve taken on extra hours.

Vivi, I don’t know if you’re able to comment on that. Is it the case that students are looking to take on more part-time work at the moment, or that those maybe who wouldn’t have worked before are looking to work?

Vivi: Yes, I think it’s an interesting question having just come out of a pandemic when nobody could work. It’s not a surprise that a lot of people are now looking for work. I think we also need to acknowledge that students come in all shapes and sizes, and a lot of students work full-time and are studying part-time, or studying and working part-time. I’m not against students working while they study; I think that there are huge and massive benefits to getting some real-world experience. The problem is when the hours that they spend earning a few pounds interferes with their ability to earn a good salary at graduation – so there does need to be a balance.

In general, I am very pro- young people working, especially because the current corporate workplace is saying that a lot of young people are not fit for full-time employment because they lack the necessary employability skills. Actually, encouraging young people to get jobs that do not interfere with their studies is actually both great for their finances and for their long-term employment prospects. We are seeing a lot more students going after part-time, casual and summertime work. I don’t necessarily think that that’s a bad thing if it’s managed well.


Jenny: Yes, not necessarily a bad thing if students are working, there’s some real positives to that, but I know there was some concern within our survey among students, and their parents actually, about the impact that that might have on their ability to study. Lynne, does it ever become too much for them?

Lynne: Well, working while you study isn’t necessarily a bad thing – all those transferable skills, as we’ve said, and making other friendship groups is also a great way to settle into a new city. So we shouldn’t think that working while you study is all negative – it’s actually, in the main, very positive. Some students will have work that actually complements what they’re studying. I think you need to look on a case-by-case basis.

I think the main thing is for students to make sure it’s a real job, that they’re not being scammed, because that’s certainly something that you see: ‘Pay for this training, and there’s a job at the end of it.’ We’ve read lots of those stories during the lockdown. Make sure it’s a real job, utilise the career service or the student job shop in your institution; often those jobs fit around the studies. There are lots of benefits to working – it’s just making sure that you have a balanced outlook because you do need some downtime. We all need a bit of downtime, don’t we?


Jenny: Yes, thanks, Lynne. Of course, within the student accommodation sector, a lot of students do get employment as ResLife Ambassadors or similar. I think, again, that’s one way that accommodation providers can really help.

Now I’m going to go around to each of you and just ask if there was anything else in the Unite survey that really jumped out to you.

Michelle: The interesting thing was, to me – we talked about it earlier – the budgeting side of it. I was actually quite surprised at the number of students that aren’t actually actively budgeting. I would recommend signing up for a budget app, something free to be able to manage your money. Another thing as well is signing up for Direct Debit where possible so you can plan your expenses ,because that’s a really good way of paying your bills and making sure that you can settle all of them.


Jenny: Thanks, Michelle. Vivi?

Vivi: One of the things that I think is really interesting about the report – not surprising, a little bit gratifying, and a little bit sad – is the number of people that are worried about the cost of living. On the one hand, I’m kind of glad that people are concerned about it because it is something that has been building for a while. Unfortunately, sometimes people don’t act until there is a crisis. We’re not quite there yet. There is time for people to perhaps make some small changes that are necessary in their day-to-day.

The thing that makes me sad is how many young people are nervous about speaking to their parents. I think that just makes me sad, just as a daughter, I have an arrangement with my parents that anything more than a paper cut is reported. It really is a case of ‘a problem shared is a problem solved,’ and if you ask for help, there’ll be somebody that can support you. I really would encourage anyone of any age in any part of their life that, if you’re struggling with something, reach out. Drop a direct message to someone. Just don’t fight things yourself, because there really is a lot of help and support out there, from accommodation to the university, to individuals. Just always ask for help, ask for support, because there’s an awful lot of it out there.

Michelle: I would agree with that from a Unite perspective as well – come and talk to us if you’ve got problems with the debt or you can’t manage your finances, just come and talk to us. We’re a friendly face.


Jenny: That’s some really good advice there. I think we recognise that there are a few students for whom talking to their parents isn’t an option. I think the advice there is do find someone you can trust and go and talk to them. If that’s your university or your accommodation provider or just a friend or other family then do that.

Lynne: I haven’t been surprised by the research, but I’m really glad that you’ve done some research with parents, as well as students. It’s this type of research that will open up the discussions between young people and their families.

Remember that there are lots of staff out there that you can go and talk to whether that be in Unite accommodation, whether that be in the institution. Don’t think you’ve got to manage on your own, because you really haven’t got to.

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