Students in crisis as increased cost of living drives them into poverty

The ongoing cost of living crisis is threatening higher education with many quitting their degrees due to financial pressures and universities potentially facing billions in lost revenue, according to new national research1.

The UK Student Cost of Living Report 2023 found a staggering 68% of university students know at least one person who has dropped out of their course because of the cost of living crisis. This represents about 1,947,000 students2.

Meanwhile 57% – around 1.6 million – are considering leaving their own studies, compared to just under 40,000 students who dropped out in 2021/22.

If even half of those students were to leave it could cost universities more than £40 billion in lost revenue and leave many young people facing an uncertain future, experts say.

Carried out by the UK’s number one gift card provider Love2shop and independent market research company, Censuswide, the research reveals around 1.5 million university students in the UK (55%) have had to use a food bank while studying. Meanwhile 87% – just under 2.5 million students – have skipped meals to save on food costs.

And experts say the issue may even get worse, after recent research from economic consultancy London Economics found student loan reforms unveiled by government last year will benefit the country’s best-paid graduates3.

The reforms to the maintenance loan system mean graduates entering into lower and middle income jobs, such as nursing and teaching, face an increase in their total lifetime repayments of more than £30,000, according to the analysis.

Meanwhile, higher income graduates earning in excess of £51,000 a year will see their total repayments plunge by around £25,000, say experts at London

Economics, who have labelled the reforms as “deeply regressive”.

Frank Creighton, Director of Business Development at Love2shop, said: “It’s really worrying to see how many students are considering dropping out or have already left because of the devastating financial impact of the increased cost of living. This should be a huge concern for universities.

“For many students this is their first time living independently away from home. They should be able to focus on their studies, not worry about skipping meals in order to pay their bills. This is also a potential problem for universities. Fewer students – or poor results due to the pressures students are under – will have a significant impact on university finances.

“It’s time to start looking at practical solutions across the board to help all students deal with these challenges.”

Despite all this, 64% of students responded to the survey saying they received no cost of living support from their university and only one-in-five (20%) say have been offered a financial incentive specifically linked to continuing their course.

Just 14% of students say they have received cost of living support from their university in the form of a voucher or gift card, yet around half (49%) think universities could improve their support by doing so.

Love2shop already works with a number of universities to provide gift cards or contactless digital gift cards to offer students.

While Love2shop, Gift Cards and Contactless Gift Cards can be redeemed in more than 100 high-street and online retailers, while universities can limit them to ensure emergency cost of living payments are only used with retail partners that specialise in essentials.

Download the full report here