- Students have seen their cost of living rise by 12.3% in the past year, according to new research from TechnologyOne, outpacing headline inflation of 10.25%.
- Seven in ten students have considered dropping out of university since the start of their degree, with the rising cost of living cited as a major reason.
- With student wellbeing vital to retention rates, universities must respond to support students through this difficult period, while also under inflationary and staffing pressure.
Seven in ten (70%) UK students have considered dropping out of university as their rising cost of living outpaces the general public, according to new research from higher education software provider TechnologyOne.
Students returning to campus this month are facing a bleak 2023, having seen their cost of living rise by 12.3% over the past year, about a fifth more than the price rises felt by the general public. Nearly two fifths (37%) of students who have considered quitting their degrees gave rising living costs as the main reason, while 69% of all students admitted to adjusting their spending over the last term because of the rising cost of living. Half of students reported having to cut back on eating out and nights out (54% and 50%), more than a third are cutting back on heating (36%), while a third are reducing their spending on basic groceries.
Overall, more than half of students (54%) claimed that rising costs are “ruining” their university experience.
To measure the price increases, TechnologyOne created an inflation basket tailored to students, which included categories such as food and drink, clothing and footwear, and study materials. The biggest price increases included pasta (61%), milk (50%), and frozen vegetables (32%), while books and study materials saw a 13% increase. The cost of leisure activities has also surged. The price of a ticket to Glastonbury Festival has gone up by 26%, while takeaways are on average 13% more expensive than the previous year.
It means that in addition to maintenance loans, more than half of students (52%) now report having a full or part-time job to fund their “basic lifestyle” at university and afford their rent, utilities and food. This financial insecurity is also leaving some students feeling less like they belonged at university, and are potentially missing out on university activities beyond the classroom.
Leo Hanna, Executive Vice President at TechnologyOne in the UK, said the findings were a wakeup call for the higher education sector already under inflationary and staffing pressure.
“After so many students have already missed out on much of the traditional university experience during the pandemic, they are now really feeling the pinch heading into 2023 as the cost of living spirals. Worryingly, it is causing such a huge proportion to rethink their degrees entirely. Universities will increasingly need to step in before students walk away from their academic studies,” Mr Hanna said.
“We speak with university leaders every day, all of whom are concerned about student wellbeing and retention. And with universities facing considerable financial strain themselves, the challenge is how they can be doing more with less. Modernising the way universities communicate and interact with their students is therefore critical to being able to offer stronger support mechanisms and to spot the warning signs earlier. Investing in smart technology and analysing the right timely data can be transformative in helping universities identify and intervene when students are struggling – financially and emotionally – and ultimately helping them stay the course.”
“We know the last few years have had a profound impact on the higher education sector, but innovation often thrives under pressure, and now is the time for universities to be agile and embrace smart new technologies to gain an edge.”
Chloe Field, Vice President for Higher Education at the National Union of Students, said:
“These statistics are extremely disheartening, but unsurprising. Despite these rising expenses, already scant maintenance support has not kept pace with inflation, leaving students struggling to make ends meet. With the colder months upon us, many students have had to make difficult choices between heating and eating.
“While the Government has offered some financial support, it hasn’t gone nearly far enough, and we urgently need them to link student support to current rates of inflation whilst also providing additional money for grants to provide sufficient support for students in the long term.”
TechnologyOne is helping higher education institutions such as Coventry and Lincoln Universities do more with less, by providing a simple and engaging experience for students and staff all the while reducing their administrative burden.
John Latham, Vice-Chancellor at Coventry University, commented:
“It’s not just students feeling the cost of living squeeze – universities are dealing with the threat of further industrial action from staff, spiralling energy bills, and the ongoing tuition fee freeze. It’s a difficult backdrop against which they also need to be thinking about how to maintain and enhance their service to students, and prevent drop-out rates from rising. We know digital transformation will make a real difference in reducing costs, at the same time as providing students with more effective support.”
One of the positives highlighted in the research was a large majority of students (69%) were happy with the split of online vs in-person classes they have scheduled this year, showing universities’ approach to blended learning in a post pandemic era is hitting the mark.