Is it crunch time for the student cost of living crisis?
Polls are suggesting students are suffering more than most during the cost of living crisis. As the end of the academic year approaches and with school leavers weighing up their options ahead of ‘clearing’, we asked a panel of experts how universities and student accommodation providers can ensure that students get the support they need?
A report published by the Bank of England in March 2023 revealed that student loans are only just covering the basics. Some students are taking on additional jobs or hours to supplement their incomes, while others are considering whether they can afford to continue their studies.
This was backed up by findings from the Office of National Statistics Student Cost of Living Insights Study (SCoLIS) released in February which showed that more than 9 in 10 (92%) higher education students say that their cost of living has increased compared with last year. Crucially, around 46% of students reported their mental health and wellbeing had suffered.
Universities are responding to the crisis in different ways. Katy Lemmon, Accommodation Manager at The University of Liverpool is seeing at first hand the impact on students as the crisis has deepened.
She tells us: “At The University of Liverpool, we've always been really focused on making sure that students get the support they need to be able to achieve academic success. It's a key ethos.
“We’ve had a hardship fund in place for many years and since COVID, and with the cost of living crisis, we've more than doubled the amount of money that's within that pot, as well as enhanced financial advice and guidance on offer for our students.
“The hardship fund is for those experiencing severe crises and in need of additional support perhaps in the form of a loan or a grant from the university.
We have a digital cost of living hub with advice and guidance about how to be financially aware as a student, as well as regular budget management sessions in order to give students the tools to manage their finances.
In addition to this, we are proud to offer a number of part time casual roles to students, such as Accommodation Ambassadors who show their rooms on Open Days, that pay above the real living wage and are completely flexible around their studies.
Katy Lemmon
Accommodation Manager at The University of Liverpool
Lee Rawlinson, Director of Homes for Students shares similar concerns about the current ‘very tough’ economic picture for students.
“Students are in more danger of dropping out of university because of the cost of living crisis and as things get harder, the support some students might have received from the Bank of mum and dad is getting stretched too,” he says.
Lee believes better data and earlier intervention is needed before students reach a point where debt spirals out of control. This year, we have seen demand increase for properties aligned to our “essential student living” brand from both domestic and international students - with the addition of India and Nigerian markets alongside domestic students who are seeking lower cost, non-ensuite accommodation offerings in popular cities. By working with our university partners, we have an opportunity to obtain a much earlier understanding of those in need by exploring the data.
Lee Rawlinson
Director of Homes for Students
“Most universities have a hardship fund and usually students only access that hardship fund when they are in dire straits, perhaps if they have taken on a payday loan for example. The support is only escalated when it gets to crisis point.
“It’s clear that we need to work to break down the silos in terms of information. What can really assist us is better data, better data sharing agreements and a better understanding of those students who are having a tough time.
“If a student is having a difficult time academically and struggling financially the only way as accommodation providers we find out about it is if the student discloses that information to us. They may have already disclosed it to the university but we have no way of knowing this unless the student makes a second disclosure. Equally, if a student discloses something to our teams, how do we not breach their confidence or trust while being able to escalate that concern back to the university in a secure way? These have been one of the main challenges of data sharing in a post GDPR landscape when trying to provide “connected support” for students.
“That’s a scenario where a secure system like Kinetic’s Student Life is a good solution, so no matter where a student is in the country, whether they change university or change course, centralised secure confidential records are available to the people who are best positioned to help.”
Lee believes one consequence of the cost of living crisis may be a growth in demand for purpose built student accommodation (PBSA) that will increase the pressure on accommodation providers to consider the support they are providing. He says that many students feel the stakes are now too high to risk living in multiple occupancy student accommodation (HMOs) in their 2nd and 3rd years and also that many landlords have recently sold up, reducing supply in many popular cities.
He says: “They want peace of mind rather than worrying about a landlord who doesn’t come and fix the shower or falling out with a flatmate or dealing with a house party that goes out of control. PBSA operators and universities need to work closer together to explore the needs of their student recruitment each year and how both luxury and affordable demand can be balanced.”
Katy Lemmon at The University of Liverpool supports this by saying there is a push in this direction as the university adopts a pragmatic approach to securing lower cost accommodation.
She says: “We’ve increased the amount of affordable accommodation that is offered by going out to private providers in the city, and run a hybrid approach combining our own accommodation plus the private provision of secure affordable accommodation to a decent standard in good locations. This has been well received by our students. We also try to work flexibly so if a student in accommodation is struggling financially, and if private providers do have space, we will allow the student to be released from their agreement with us.”
Latest research underlines the resilience of today’s students in the face of what UCAS describes as the ‘new normal’ - life post-COVID in a harsh financial climate. The UCAS 2023 Student Lifestyle Survey shows the extent to which they have adapted. More students are taking on part time work (43%) and are shopping at discount supermarkets. Student spending has fallen by £16 per week to £219 per week, a cut of 7%. In addition, the UCAS Cost of Living survey highlights that prospective students are becoming more savvy - for those weighing up where to go, the cost of living at the university of their choice is the number one factor.
The 2023 Knight Frank UCAS Student Accommodation Survey of 20,000 students shows that cost has overtaken value as the most important factor influencing where students live. With electricity prices up by 67%, it’s not surprising to see that 92% of students reported being worried about rising living costs while 62% said cost was the single most important factor influencing their decision on where to live.
Currently, 18% of students are saving by living at home while they are in higher education. For those living in halls, there is continued emphasis on the support offered within a communal space with 82% feeling that organised groups or clubs reduce loneliness and isolation - a key factor in supporting student wellbeing. Interestingly, of those who had moved back into purpose built student accommodation (PBSA) from the private rented sector (PRS), nearly 90% said the driver was the ability to study more effectively.
These studies highlight again the extent to which accommodation providers need to focus on affordability but also see the bigger picture in terms of how accommodation costs feed into the way students decide how and where to study and what the experience will deliver.
Students may have cut their outgoings, but they want their university years to meet their expectations and enable them to achieve their goals after they leave - and they are showing their willingness to work, to adapt and make choices and decisions in a way that will build resilience for the future.