A new report from the Department of Education estimates that the 2023-24 maintenance loan increase will not be enough to restore students’ purchasing power.
The projected 2.8% increase is well below the level of inflation. In the February 2023 Equality Impact Assessment, the DofE states this will have an overall “negative impact” for undergraduate students, as the proposed loan is effectively less valuable than in previous years. A 13.7% increase in the loan would be required to maintain the value of maintenance loans and grants given in the 2020/21 academic year.
Although the maximum loan is the highest it is has ever been, at just under £10,000 (or £11,374 for students who are “entiteld to benefits”), this sum is in real terms worth £1,000 less than the loans of 2020/21. The DofE attributes this decrease in actual value to unforeseen record-high inflation, visible in metrics not used by the government to calculate the annual maintenance loan increase. The projected loan is determined the November before the academic year according to the Retail Price Index (RPI), not the commonly-used Consumer Purchasing Index (CPI).
Most English undergraduate students receive some level of maintenance funding, and 41% received the maximum loan last academic year. University-specific financial aid and scholarships often supplement these as well. At Oxford, it is estimated that one in four UK undergraduate students receive some form of non-repayable bursary. Individual colleges also have financial assistance schemes for students in difficulty, although these vary.
Oxford “recognises that the rising cost of living is a source of anxiety for many students and [is] continuing our efforts to ensure our financial support addresses this.” The Crankstart scholarship for low-income students, which offers financial support as well as mentorship and career opportunities, received a £500 pound uplift this year. Graduate students also saw their stipends rise along the lines of inflation with a 13% increase.
The DofE concludes that the 2.8% loan increase will adversely affect low-income students in particular and students are likely to experience a “further erosion in purchasing power”.