Rising inflation has reduced maintenance support for the poorest students in England by more than £100 a month in real terms in just a few years, according to a report.
The Institute for Fiscal Studies (IFS) said the government’s failure to correct course after inflation began rising has led to “substantial cuts in generosity”.
The annual report, which is funded by the Nuffield Foundation, found that rising costs are placing increasing pressure on education spending at all levels across England.
IFS researchers say higher-than-expected inflation has continued to erode the real value of maintenance loans for current students.
Students in 2023-24 will be entitled to borrow 11 per cent less in real terms towards their living costs than they were in 2020-21, a cut equivalent to £107 a month for the poorest students.
The IFS says that without a change in policy, living cost support for future students will be permanently lower, causing hardship for some.
“The government’s choice to base increases in living cost support on forecast inflation – and not to correct course when inflation turns out higher than expected – has meant substantial cuts in generosity over recent years,” Kate Ogden, a senior research economist at the IFS and one of the report authors, told Times Higher Education.
“The poorest students will be entitled to nearly £1,300 less in real terms this academic year than they would have been just three years ago.”
In addition, as parental earnings thresholds governing maintenance loan eligibility have been frozen since 2008, researchers found that maintenance support for students from families with middling earnings has been cut even more severely.
A student with parental earnings of £62,000 is entitled to £4,700 this academic year, but would have received £2,500 (52 per cent) in 2016-17 if their parents earned the same relative to average earnings.
“This cut is more subtle, but leaves fewer and fewer students entitled to the maximum support each year,” added Ms Ogden.
Researchers also highlight how the tuition fee freeze has reversed the real-terms value of spending per student, taking it back to the low point of 2011, before fees were lifted.
This is a reduction of 24 per cent in real terms, but 2024 spending was also found to be 3 per cent lower than in 1990.
Luke Sibieta, IFS research fellow and an author of the report, said rising inflation and costs were “eroding the real-terms value of budgets” at universities.
And he said the government chose to focus on reducing taxes in the recent autumn statement instead of topping up education spending plans.
