Diving into debt: How price surges are impacting UK students

 Aditya Singh and Jyoutir Raj

Inflation, the rise in the general price level of goods and services, has recently emerged as a pressing concern for university students in the United Kingdom. In the UK, inflation has been soaring, with an increase of 8.7 per cent in the year leading up to April 2023. In the past several decades, it has never been this expensive for a student to pay for their needs and necessities.

Other demographics, such as working adults, have stable incomes and decades of financial experience – including understanding of financial matters and informed decision-making ability, such as investing, borrowing, retirement planning and other long-term goals. In contrast, many younger students lack this experience and knowledge.

For income, students primarily resort to loans and part-time jobs in labour markets that don’t require extensive prior work experience, with 43 per cent of students seeking part-time work. This means that the majority of students depend on loans to cover most of their expenses. Currently, the national outstanding student loan total stands at £182 billion in March 2022, and it is projected only to escalate. Comparatively, 40 per cent of individuals aged 35 to 44 borrow money, underscoring that students face a heavier impact and increased vulnerability. 

There are several major expenses that burden younger students as they assume newfound adult responsibilities. Tuition costs, rent, food, and miscellaneous bills account for the majority of their expenditures. Research conducted by NUS indicates that 42 per cent of students live on less than £100 per month. Students juggle these obligations concurrently with their academic work, aggravating existing inequalities and limiting opportunities for disadvantaged students. In extreme cases, while making ends meet, some even sacrifice on more expensive necessities such as heating and main meals.

For those who commute to university, a significant cost is transportation. Considering the price of fuel as a proxy of the cost of travel from home to university, the average cost is 27 per cent more than what it was three years ago. Conversely, maintenance loans only increased by 2.8 per cent until the recent change in 2023. Clearly, inflation has outpaced the remedies provided by the UK government.

In a public statement, the UK Government recently outlined the actions it will take towards reducing the financial burden on students, announcing that tuition fees are frozen until 2025 at £9,250. However, with universities in the UK facing a cost-side pressure, it would be expensive to abide by this cap. Tuition fees have been frozen for 10 years, whereas the cost of maintaining the level of education at university has increased. As a result of inflation, the revenue obtained from tuition fees no longer has the same real value and purchasing impact as it had in the past. Sir David Bell, Vice-chancellor of the University of Sunderland told The Times

“You cannot expect to run universities on a fee level of £9,250 a year, which by 2025 will be worth around £6,000 in real terms because of inflation.”


Evidence strongly supports the notion that universities cannot maintain their current level of education without making compromises and seeking more financially sustainable solutions. This situation may explain why certain measures are taken, such as keeping academic staff wages stagnant or even decreasing them. Despite the University and College Union (UCU) advocating for higher salaries through recent strike action and marking boycotts, prevailing financial challenges necessitate difficult choices.

Moreover, the UK government has increased the maximum loans available by 2.8 per cent to allow for more leeway for students in financial decision-making, and also made an additional £15 million available for universities to top up their hardship funds to assist students in need. 

Some long-term measures that universities could take is increasing the synergies between student support networks and universities, such as dedicated helplines for financial queries. Similarly, more knowledge of specific financial topics is bound to be beneficial for students in the long run, for example personal finance courses that educate students in areas such as savings, debt management, credit scores, taxes and more – topics that are often not covered in depth in secondary education in the UK. 

Lastly, research shows that increasing financial hardship is directly linked to rising stress and anxiety, exacerbated with high depression rates among the 18-21 age group. This could potentially be improved by providing free counselling services for students. Pure Mental NI which, a charity based in Northern Ireland, collaborates with schools and other educational entities to raise awareness on mental health. 


Inflation has a profound impact on UK university students, creating financial burdens and hindering their independence. Students face unique challenges that other demographics do not, often having fewer financial resources and experience. Universities can play an important role by improving long-term sustainable solutions such as support schemes, providing education on financial literacy, and prioritising mental health support. In conjunction with present remedies, the aforementioned suggestions could contribute to addressing long-term financial challenges and ensure students’ well-being in the midst of the current cost-of-living crisis in the UK.


Jyoutir Raj is a Mathematics and Finance student at Queen’s University Belfast. Aditya Singh is a Research Analyst at KPMG.