University students ‘Set up to fail’

  • At 28% of universities, a student from a low-income background in England would have to pay more than half of their support on even the cheapest accommodation
  • In some parts of the UK, the cheapest available university accommodation leaves the poorest students with as little as £40 a week
  • Parents face paying as much as £750 a month to support their child at university
  • The Money Charity urges universities and governments to work together to make sure that reasonable accommodation costs are affordable for students

A major new study published today by The Money Charity highlights the serious financial pressures being placed on our student population. The research, that sets out for the first time the minimum cost of university-owned accommodation across the UK, reveals the immediate disadvantages students face when it comes to managing their money and asks, are they being ‘Set up to fail?’

Tuition fee loans are set to meet the upfront cost of tuition, albeit by incurring significant debt. But there is no such guarantee that maintenance support matches the cost of student living. For students from lower-income households, this can have serious consequences. The Money Charity can reveal that at 28% of universities, students from England from the poorest backgrounds are forced to pay more than half their maintenance support on their accommodation alone. In London, 42% of universities offer no accommodation under 50% of the maximum student support.

Students who receive the maximum support are those from the lowest-income households, whose families are the least likely to be able to contribute. This means that if the maintenance support provided doesn’t cover their living costs, they may be forced to take out credit or work part-time, potentially leading to damaging effects on their studies and serious financial implications after graduating.

However, as the report highlights, the issue runs much deeper and affects all students no matter what socio-economic background they are from. The Money Charity found, with even the maximum student support available not covering the cost of student living, anyone receiving less than that would need their parents to contribute, potentially to the tune of thousands of pounds a year.

Based on the latest research from the Department for Business, Innovation and Skills and The Money Charity’s report, students from England need to find as much as £750 a month on top of their support – whether from family, working, or using credit. And the lowest-income students outside of London need around £346 a month.

In all scenarios, students are often left facing the unenviable choice of bearing financial pressures at the very start of their journey into financial independence or dropping out of university.

The report, ‘Set up to fail? The reality of money management at university’, calls on government and universities to be clearer about accommodation costs and the contributions expected by families towards student living, to provide support and deduct accommodation costs monthly rather than termly. And ultimately they need to work together to ensure that student support covers reasonable accommodation costs, so that students are supported to develop their financial capability as they stand on the brink of financial independence.

The report coincides with the launch of The Money Charity’s Student Money Manual, the essential guide to student finance and managing your money at university. Produced in partnership with Santander, the free yearly guide is available to all students.


Commenting on the research, Michelle Highman, Chief Executive of The Money Charity said:

“For almost all of the 360,000 new full-time undergraduate students each year, their first instalment of maintenance loan and grant will represent the single largest sum of money they have ever been responsible for. This places a huge amount of pressure on students to use that money sensibly. But if most of that money is gone on accommodation costs immediately after entering their account, they are being set up to fail. We can’t expect students to become responsible savers, credit users and planners, if staying out of the red during university is impossible.

The way in which young people manage their money at university helps to shape their attitudes towards financial management throughout the rest of their life – that’s why every year, with kind support from Santander, we publish the Student Money Manual.


Steve Pateman, Head of UK Banking Santander, said;

“For any young person deciding to go to university there are a lot of things to consider aside from which university and course they should choose. The expense of university is undoubtedly the biggest financial commitment young people make and without the right guidance and support can be a daunting one.

By supporting the work done by The Money Charity and the publication of the Student Money Manual, which helps educate students on how best to manage their finances throughout university, Santander believe this will go some way in alleviating the pressure caused by the financial challenges students face.”

Read the full report here