Students have got through their exams but are they set up to fail?

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by Policy & Communications Officer, Frank Hobson

Today is that strange, tense day when teenagers go back to school, often for the last time, to pick up their A-Level Results. All those students are stepping into an unfamiliar world of responsibility – of self-invention, socialising, cooking, cleaning, earning, spending, failing and succeeding. Many will leave home for University.

But as we celebrate and commiserate with them and their parents, the reality is that the government and the Student Loans Company do not fund the full cost of university through loans and grants. Many students and families face spending the next three years desperately working, scrimping or borrowing to get through. Some simply will not go. Others will have to drop out.

Many parents and students believe that the student finance system covers the full cost of university. This leaves them unprepared for a nasty shock when they find that it is not.

Last year our landmark report, ‘Set up to fail? The reality of money management at university’ showed that in more than a quarter of universities across the UK, a student from a low-income household in England would pay more than half of their student support on their university halls, even if they took the cheapest room available. Outside of London, this would mean that they would have just £350 a month to live on.

For those families with higher incomes whose children receive the minimum loan, parents will need to pay extra just to meet the cost of accommodation in 28% of English universities, without even getting to living costs

We combined our figures with research from the Department for Business, Innovation and Skills to work out how much extra students would need to live on. For high-income households that could be as much as £750 a month – and even students from the lowest-income households need nearly £350 a month.

This reality not only puts a lot of people off university, right at the outset of adulthood it entrenches the idea that not being able to make ends meet is normal,. Some students might respond to this well by keeping to budgets. But many others will, unless their parents have the means and intention to support them, be exposed to the stress, denial and the possibility of problem debt associated with money problems from the moment they leave home.

At the Money Charity, we don’t think that this is okay. We need to be supporting students properly and entrenching good financial practices from the moment people become independent.

For fresher’s week this year, we will be updating our student research with the latest numbers and new figures on bursaries and accommodation facilities. We will also be exploring the implications of the plans to scrap grants for poorer students and replace them with expanded maintenance loans announced in the Summer Budget.

If you or your child is going to university this autumn and you’re wondering how you’re going to pay for it all, we will be putting out our annual Student Money Manual full of strategies and tips for how to make finances work as a student. Watch this space. It will be ready in September!


If you are interested in the meantime, please read our full report and policy recommendations from last summer: ‘Set up to fail? The reality of’ money management at university’

You can also find last year’s Student Money Manual in downloadable format here: Student Money Manual