By Mark Fairlie.
New research from UK price comparison site, MoneySuperMarket, has found that 61% of university students worry about their finances at least once a week. It was also found that only one in five will seek financial help during their studies and 85% turn to alternative sources just to make ends meet.
The true cost of university
Earlier this year, UCAS announced that a record number of young people in the UK are choosing to go to university. In addition to this, 2018 saw the highest number of people from the most disadvantaged backgrounds in the UK being accepted into higher education; standing at 16.1%.
With more people than ever now going to university, the spotlight has fallen on the financial struggles faced by students in the UK.
MoneySuperMarket surveyed over 700 UK students in partnership with OnePoll, concluding that student loans were not sufficient in covering the cost of living at university.
In their breakdown of student spending, they found the costs per month for the average student were as follows:
|Expense||Average cost per month|
|Accommodation (outside London)||£465.54|
|Travel back home after term ends||£25.00|
With additional living costs such as travel within their university campus and cities, loan repayments, and mobile phone bills, MoneySuperMarket concluded that monthly student spending came to £894.33 on average.
This equates to a total of £2235.83 for each term. With the average termly student loan sitting at £2,094, the research found a £141.83 shortfall.
Between 2016 and 2017, there were 1.87 million students studying at higher education; collectively creating a £265 million shortfall between student loans and real-world living costs.
Supplements to student loans
MoneySuperMarket also found that 85% of students rely on additional streams of income outside of their student loan in order to make up for this shortfall.
Almost half of these use the ‘Bank of Mum and Dad’ – receiving money from their parents or families – while 42% have part-time jobs in order to fund their studies.
On top of this, more than 42% of students regularly use their overdrafts to stay afloat at university. The average overdraft balance for those at university is currently £548.
MoneySuperMarket spokesperson, Sally Francis-Miles, believes it is “not surprising” that so many students are unable to survive on student loans alone.
“The Government takes into account that parents will support their child in addition,” she says. “Obviously, that’s not always the case so it then falls on the student to get a part-time job or to save before going to make up the shortfall.”
Students facing financial hardship
Financial stress is also a serious issue within universities. One in three students said they worried about money every day, while a further 31% are concerned about finances on a weekly basis.
With this evident financial hardship, the research found two potential causes in its findings; that students are not fully aware of how much they are spending on non-essential items, and that very few know where to turn when they start to struggle.
MoneySuperMarket asked students how much they think they spend on non-essential items. The average answer given was £112. When looking at their actual spending, it was found that this figure was actually £220; almost double their estimate.
Despite many universities having their own wellbeing support for financial issues, only one in five students seeks financial advice while studying.
While many believe they will leave university with an average debt of £36,566, to the Institute of Fiscal Studies state that students are likely to graduate owing more than £50,000.
Ways students can save
Many student bank accounts offer a zero per cent overdraft throughout studying years. By calculating income (in student loans, wages, and money from parents), students can work out exactly how much they have to spend on essential living costs.
In many cases, further savings can be made by switching to lower value brands for groceries and utilities, or spreading the cost of high-value and essential items using student-specific loans.
Francis-Miles added that MoneySuperMarket “recommend that students always look for ways to save money where they can, but for those who have real financial concerns, there are often financial support offices at universities to help.”