Further and Higher Education Students: Cost of Living

I remind Members that they should bob if they wish to be called in the debate.

I beg to move,

That this House has considered the impact of increases in the cost of living on further and higher education students.

I am delighted to see you in the Chair, Sir George. This is a timely debate coming as the new academic year starts. It is based on the two-stage inquiry undertaken during the first half of the year by the all-party parliamentary group for students, which I chair and officers of which are also present. We looked at the impact of the cost of living crisis on higher education students, on which we reported in March, and, in partnership with the all-party parliamentary group on further education and lifelong learning—whose chair, the hon. Member for Waveney (Peter Aldous), I welcome —on FE students, on which we reported in July.

Although many others have been impacted hard by the cost of living crisis, we were concerned that students should not be overlooked. We were not alone in that concern. Petitions Committee staff wrote to me last week to tell me that there have been six petitions to Parliament seeking support for students. It is important that students are not seen as a homogeneous group. In FE and HE, there is enormous diversity of students, including part-time and full-time; distance learners and commuter students; many with families and caring responsibilities, juggling work with study; classroom-based and apprentices; undergraduates and postgraduates; and home and international. Of course, there is the difference in the arrangements and responses across the four nations of the UK.

The current student cohort, though, have one thing in common: the double misfortune of educational disruption from covid and now the cost of living crisis. Our inquiry collated evidence from universities and student unions, and directly from hundreds of students who engaged with us. We drew on the work of others, including the Office for National Statistics, the Sutton Trust, the Institute for Fiscal Studies and Save the Student. I would like to thank Parliament’s Chamber Engagement Team for its work in gathering feedback since the debate was announced. Just over the past couple of days, we have had upwards of 160 students, parents and others contact us.

So what did we hear? First, we heard that the student support system has failed to keep up with rising costs and that it was already unfit for purpose when the cost of living crisis hit, particularly given the decreasing value of student loans. According to the Save the Student survey, the loan fell short of average costs that students face by £439 per month in 2021-22, and that had increased to a shortfall of £582 per month last year. Other factors include the freezing of the lower parental earnings threshold, which means that the proportion studying outside London who receive the maximum student loan fell from 57% in 2012-13 to 38% in 2021-22.

My constituent Elliot is starting his final year at university, and his biggest worry is securing affordable housing. The maximum loan he gets is not keeping up with the prices, and he spends at least two thirds of his loan on rent alone. His family cannot afford to top up his rent. Does my hon. Friend agree that dealing with such financial hardships can be a barrier to excelling at university and that much more financial support is needed to give students the freedom to focus on their education?

I echo the point my hon. Friend makes. Many of the comments that we received reflect the sorts of problems that his constituent faces, and I will come on to some of the wider points that he made.

Another contributory factor, according to the IFS, was the inflation forecast errors used to calculate loan increases, which mean that their real value is lower now than at any time in the past seven years. On top of that, we have had the scrapping of maintenance grants. The cumulative effect has pushed many students to a tipping point. More than a quarter of students were left with less than £50 a month, after paying rent and bills last year. As my hon. Friend points out, rent is accelerating at a significant rate. Our inquiry found 96% facing financial difficulty, with food, rent and energy the biggest pressures, but transport costs were also a key issue and particularly difficult for commuter students, many of whom chose to be home-based precisely to save money. Students have been struggling to get to their classes, access libraries and travel to placements.

The inquiry was a genuine learning exercise for us and we were particularly concerned to hear about the sharp increase in hours of paid employment taken by students. Of our respondents, 61% worked alongside their studies and 37% said that they are working more hours because of cost of living pressures. The Sutton Trust reported that about half of undergraduates missed classes last year due to paid employment. Around a quarter missed a deadline or asked for an extension on a piece of work.

They are often in precarious and insecure jobs. Johanna, one of the respondents to the Chamber Engagement Team survey, said,

“I have had to take several jobs, as the part time job sector is full of zero hours contracts with little stability and no promise of actual work. I am working more than I should have to and my grades are suffering.”

I congratulate the hon. Member on securing this debate. Some of the figures he has given are truly shocking. Does he share my shock that a quarter of universities are now running food banks? The fact that universities are themselves having to provide food banks for students is an indictment of the fact that clearly our young people cannot afford to make ends meet at university. Does he agree we should consider bringing back things such as the maintenance grant so that our young people can focus on learning rather than spend all this time trying to make ends meet?

I thank the hon. Member for her intervention and her support as an officer of the all-party parliamentary group. She is right about the shocking fact she shared about food banks. I will come to that and reflect on some of the recommendations she talks about.

As well as affecting academic work, paid employment also affects involvement in extracurricular activities. People might ask why that matters so much, but it matters enormously because volunteering roles involve networking, team working, leadership skills and wider opportunities. Those experiences give graduates that extra edge in the job market.

Hitting grades, weakening skills development and limiting CVs—this all means that those from poorer backgrounds, who are the ones relying on ever increasing paid employment, are particularly disadvantaged, reversing the efforts of successive Governments to widen opportunities and ensure that those who take advantage of higher education go on to succeed. Since our inquiry, we are beginning to see the impact on retention, with rising drop-out rates. The sector group, MillionPlus, has estimated that as many as 90,000 to 108,000 students might find it too difficult financially to continue to study.

Responding to all of those challenges, most universities have put more money into hardship funds. Others have developed initiatives to offset the pressures faced by students, though not uniformly. The sector probably could do more. Just last week, the Higher Education Policy Institute published a report saying that those initiatives included supporting students with food costs, providing both means-tested and unconditional hardship funding, and subsidising student activities. And, as the hon. Member for Brighton, Pavilion (Caroline Lucas) pointed out, a quarter now have food banks on campus.

University support services have substantially increased their workload, extending the criteria for hardship funds, drawing in more eligibility, and working with their student unions. Our survey found that many students have not always accessed the funds available, either because they were not aware of them, which is a challenge for the sector, or because they did not think they qualified for additional help.

Order. In view of the number of people hoping to speak in the debate, I am afraid I must impose a time limit of three minutes on Back-Bench speeches. I am sorry, but otherwise the number of people able to take part would be even more limited.

It is a pleasure to serve under your chairmanship, Sir George. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate and opening it in such a comprehensive and diligent way. As he said, I chair the APPG for further education and lifelong learning, and I would like to thank the Association of Colleges, which provides our secretariat, for all the work it did in supporting the second stage of the inquiry, focusing on the challenges faced by further education students.

An online evidence session was held, during which we heard harrowing feedback from FE students about the experiences they are facing. Many of those in further education come from less well-off backgrounds and are already making enormous sacrifices to go to college. They are working long hours in part-time jobs, and many are supporting members of their wider family. The cost of living crisis has piled further pressure on them; for some, the burden has become intolerable and they have had no choice but to give up their studies.

Colleges are provided with funding to support students, but this is inadequate, and in many respects the crisis is deepening. East Coast College, with campuses in Lowestoft and Great Yarmouth, has been providing bursaries and free school meals. Two years ago, it was supporting 1,400 16 to 18-year-olds. Last year the number rose to 1,842, and this year the college has already received 2,200 applications, which represents two thirds of its student cohort. The situation is intolerable, and the negative knock-on effects are far-reaching. Many people are being placed under intolerable pressure and are making enormous sacrifices. Colleges themselves find their budgets stretched to breaking point, and that in turn leads to the ever-widening skills gap that affects our economic performance so dramatically.

As we have heard, the July report put forward six recommendations. I would like to highlight one that we speak about a great deal in FE debates: the need for additional core revenue funding for the sector. I acknowledge that in recent years, particularly with regard to capital funding, the situation has improved, but FE gets a raw deal. I urge the Chancellor to address that at the forthcoming autumn statement by providing £400 million additional revenue funding that can address the problems that the sector faces and also alleviate the particular challenge that FE students face.

It is a pleasure to follow the hon. Member for Waveney (Peter Aldous); I profoundly agree with the last point that he made. It is an even greater pleasure, Sir George, to serve under your chairmanship and to be able to congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate and also on the work done by the all-party parliamentary group for students, which provides material to underpin the debate today.

My own constituency in Newcastle upon Tyne East has a very large student population. Perhaps we are more famous for shipbuilding, heavy engineering and manufacturing cigarettes—all industries that have gone—but we are still famous for having a large student population.

Inflation is an evil that must be exterminated. Mrs Thatcher told us that in 1987 and it made its way into the Conservative manifesto. She might have added that once exterminated, it ought to stay exterminated. For reasons we all understand, it has broken out again and makes us face a series of challenges—some much more easily borne by the rich than by the poor. That is the core point that I want to make in my short address to this debate.

A number of funding authorities have had to address this question. In Northern Ireland, the maximum maintenance awards have been increased by 40%. In Wales the increase is 9.4% and in Scotland, although the support is provided in a different formula, it is a rise of £900 a year, which, depending on circumstances, is an increase between 11.1% and 17.6%. That is the devolved Administrations.

Maintenance loans in England are due to rise, as my hon. Friend the Member for Sheffield Central told us, by just 2.8%. That cannot possibly meet the general challenges of inflation. When we look at the factors that make up the specific pressures on students, such as rent increases, the cost of food, which has been particularly affected by the arable sector price increases, and transport costs as well, we see that students are disproportionately affected. Yet their interests have not been addressed, so they find themselves working longer hours to earn more money to keep themselves and become subject to an enormous amount of stress and anxiety. That could be a separate debate in itself.

It is a pleasure to speak in this debate, Sir George; I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing it. He and I have worked together over many years. His careful stewardship of the APPG inquiries is typical of his attention to detail and his passion—shared, I know, by the Minister, my right hon. Friend the Member for Harlow (Robert Halfon)—for education as an engine for social mobility.

I was very pleased, both as Chair of the Education Committee and as a local MP with a large university and many excellent colleges in my patch, to be able to serve on the inquiry and contribute to it. There are a number of strong recommendations, which I want to endorse, including more targeted bursary funding and an increase in the earnings threshold for the first time since 2018. I hope my right hon. Friend on the Front Bench will be able take some of those up.

The two reports from the all-party group highlight several concerning trends for students, which look set to fundamentally alter how young people see the comparative value of different further and higher education routes. Where that increases the attractiveness of earn-while-you-learn approaches such as apprenticeships, it might in some senses be welcome, but where it reduces students’ ability to complete their courses or participate in the wider life of universities, including clubs, volunteering and community engagement, and where it risks increasing drop-out rates or requires students to spend so much time working that their studies and mental health suffer, it is a concern.

Local students at the University of Worcester wrote to me with a number of concerns that they wanted to be raised in this debate. They point out that the cost of living is acutely affecting those who live on their maintenance loans and feel that a number of the existing schemes to support people with the cost of living specifically exclude students. They say that student accommodation costs have risen 60% in our area in the last decade, and 68% of students who responded to their survey say that they can no longer afford course materials. One third of students have considered dropping out because of finances, and one third—compared with the quarter highlighted in the all-party group’s report—have been left at the end of the month with less than £50 after rent and bills. They call for an increased student finance package and tailored cost of living support for students. In that respect, the recommendations of the all-party group are very welcome.

The Education Committee has also heard concerns that students taking T-levels find that they cannot complete their courses because of cost of living pressures on their families; in many cases, they are transferring to apprenticeships to earn while they learn. I highlight the recommendation, which echoes the point made by my hon. Friend the Member for Waveney (Peter Aldous), about FE funding in our report “The future of post-16 qualifications”; I gently say to my right hon. Friend the Minister that the figure cited in the Government’s response—that there is an increase of 2.2% for the FE sector—is clearly not enough. I know that he will want to make the case to the Treasury for more, and I hope that he will use the reports from the all-party group to strengthen that case.

It is an honour to serve under your chairship, Sir George. I thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) for securing this important debate.

Further and higher education students in my constituency of Liverpool, West Derby and across the country are facing immense pressure from the cost of living crisis, with rising bills, inflation and the Government’s real-term cuts to students’ maintenance loans. The maintenance loan simply does not allow students to cover basic costs or to live and study in dignity. The National Union of Students reports that more than a quarter of higher education students are left with less than £50 a month after covering rent and bills, and that 42% are surviving on less than £100. The impact on students’ health, wellbeing and education is devastating. Some 22% of surveyed students say that they often skip meals to save money, and, shamefully, a quarter of universities now have food banks.

A staggering 90% of students say that the rising cost of living is negatively impacting their mental health. Students are the very future of our country, and they are being driven into poverty simply for wanting to go to college and university to study. Surely higher education should be seen as a right accessible to all who want to go—an investment in a public good that is essential to the future success of this nation.

At a recent talk in Parliament with a superb class of sixth-form students from St John Bosco, in West Derby, about their plans for the future, it absolutely broke my heart to hear that many of the students felt that higher education was simply not an option for them because of the cost involved. I often hear talk about glass ceilings in politics; listening to the class that day reinforced my view that the cost of higher education for the working class was now becoming one of the biggest glass ceilings of all.

For over a decade in power, the Government have completely failed to support students in Liverpool, West Derby and right across the country. The coalition Government scrapped the education maintenance allowance, and the bursary fund that replaced it has less than a third of the EMA’s budget and stricter eligibility criteria that have excluded many who desperately need that support. That simply cannot go on. We need systemic change. We need an end to the underfunding of our entire education system, an end to under-investment in students and an end to the failed free market experiment in higher education.