As the new academic year begins, millions of college students face an increase in the cost of living that far exceeds the modest increase in living loan assistance.
Students entering college in September face a 9% annual increase in basic living expenses, according to a study conducted by Interactive Investor.
For students living in private rental housing, the overall inflation rate is 12% as landlords raise rents to cope with more expensive mortgages.
Soaring energy bills are the biggest driver of inflation, which is up 70% over the past 12 months.
The cost of running a car is increasing by 21% year-on-year, reflecting rising fuel costs, and the cost of going out has also increased from going to cinemas, theatres, concerts, sporting events and eating out in restaurants and cafes between is 7% and 17% more expensive than last year.
Takeaways also rose 10% in price, groceries rose 8% and rail fares rose 5%. Books, a student staple, posted a more modest 3% increase.
Meanwhile, student maintenance loans have not been able to keep up with soaring costs as students studying in England will be able to borrow just 2.3% more in the coming academic year than last.
The loan, which covers living expenses and is separate from student loans to pay tuition fees, has risen from £9,488 to £9,706 for students attending university or college in England but outside London.
This is offset by inflation, which has boosted student bases by 8.9%.
Alice Guy, personal finance expert at interactive investor, said the significantly higher cost of living for many students means they will have to choose between heating and food this winter.
“Student households probably have a harder time than most because they have limited disposable income and spend a large chunk of their budget on necessities with little wiggle room,” she said.
Myron Jobson, also a personal finance expert at interactive investor, warned: “The sheer scale of inflation will be a rude awakening for new students, and with the Bank of Mum and Dad also facing their own cost of living, they can do the you can do not rely on offering financial support.
“No student should have to worry unnecessarily about their financial situation while they focus on their studies, but the reality is that many have to work part-time to make a living.”
The analysis of ii showed that the extent of the cost pressure varies depending on the type of housing.
Those living in purpose-built student accommodation offering rent-inclusive utility bills won’t be immediately affected when the energy price cap rises in October, but students living in privately rented accommodation are likely to see energy bills spike.
How to minimize higher costs as a student
- Budgeting is an essential part when it comes to keeping your financial house in order. You can use it to plan how much you spend or save each month and track your spending habits. There are plenty of budgeting templates available online for free, as well as apps to help you with this. The rising cost of living means we are saving less to maintain current spending levels. So be prepared to optimize your budget if inflation continues to rise.
- There are tons of offers available exclusively for students to make money. Available student discounts aren’t always made obvious by companies, so ask the question.
- Save on grocery bills by searching for the best deals — especially on high-ticket items. Even simple things like opting to purchase a private label that matches traditional pantry produce can help lower the cost of groceries. It’s also worth taking advantage of supermarket loyalty schemes – like the Tesco Clubcard and Nectar Card – which can unlock big discounts and other exclusive rewards.
- You won’t know if you’re overpaying unless you’re looking for the best deals. For example, if you’ve been with a broadband provider for a while, it’s likely that all of the introductory offers have expired and you might end up paying more than you have to. The same applies to mobile phone contracts. Look around to see if you can get a better deal.
- Students struggling financially don’t have to suffer in silence. Don’t be afraid to ask for support. Most colleges have advisory and hardship funds, as well as additional funds for those who need additional financial help, students with children or dependent adults, and students with disabilities. Students can also access living allowance funds, which are distributed by local governments to help residents in financial difficulty.