Loans are set to increase by just 2.8% next year, leaving you £1,500/year worse off than if they’d kept up with inflation. Sign our petition to fix this devastating, unjustified decision.
We’ve launched a petition calling on the government to review its decision to increase Student Loans by just 2.8% next year, and instead promise a much larger rise.
At a time when the cost of living crisis is squeezing us all, and when Universal Credit and pension payments have both risen with inflation, this decision from the government is neglectful at best, and downright cruel at worst.
If left unchallenged, the 2023/24 Maintenance Loan rates for students from England could leave you £1,500/year worse off than if loans had actually increased in line with inflation.
This will only increase the extreme financial pressure that students are under, with many unable to seek support from their parents who are also struggling.
Please sign and share our petition to #FixStudentLoans, forcing the government to increase the 2023/24 Maintenance Loan rates, and avoid embedding these catastrophic errors into the system for years to come.
What’s happening to Maintenance Loans in England?
As you’ll probably know, the rate of inflation (the increase in the cost of goods and services over the past 12 months) is currently very high, at around 10%. This means that, on average, things cost about 10% more than they did a year ago.
It also means that money is worth less than it was 12 months ago. For example, if a loaf of bread cost £1 a year ago, you could have bought 10 loaves for £10. But if the price increases by 10% to £1.10, you can only buy nine loaves with your £10.
As such, unless your Maintenance Loan increases at the rate of inflation, its value falls in real terms.
How does inflation affect Maintenance Loans?
Over the past two years, the rate of inflation has been much higher than predicted. This is an issue for students, as Maintenance Loan rates are always decided in advance based on projections of what inflation will be in the next academic year.
But as inflation has exceeded predictions (and by a huge margin, too), the value of your Maintenance Loan has effectively been cut in real terms.
According to our 2022 National Student Money Survey, this cut means that, on average, Maintenance Loans now fall short of living costs by a huge £439 every month. That’s up £99 on 2021, and £216 on 2020.
So, when they were setting the 2023/24 Maintenance Loan rates, what we needed was for the government to increase the value beyond the projected rate of inflation to account for the errors made in the previous two years.
Using figures from the Institute for Fiscal Studies, this would mean an increase of around 18.5%. This sounds big – and, to be fair, it is. But remember, it’s only fixing past errors and bringing your loan back to where it should be. Had the government’s forecasts been accurate, we would never have been in this situation.
Will Maintenance Loans keep up with inflation?
In case you missed it, the government recently announced that Maintenance Loans in England will increase by 2.8% in 2023/24. Experts say that this is roughly in line with current projections of inflation, but that’s all it is – there’s no extra increase to make up for years of real-terms cuts.
As the graph below shows, the maximum Maintenance Loan on offer will now be a massive £1,500 less than if it had kept up with inflation.
During a cost of living crisis, this is utterly unacceptable and a devastating blow to students.
Worse still, as Maintenance Loans increase as a percentage on top of the previous year’s amount, these errors will become a permanent feature of the system. Unless the government corrects the mistakes of previous years, students will be significantly worse off every single year.
Why are we only demanding change in England?
At the time of starting this petition, only the English government has announced Maintenance Loan rates that leave students significantly worse off.
In Northern Ireland, maintenance funding will increase by 40% in 2023/24. This is a huge rise, but it’s worth noting that the value of the loans had been frozen since 2010, so it’s long overdue.
Meanwhile in Wales, where the value of maintenance support is tied to the National Living Wage, funding will increase by 9.4% next year.
Scotland is yet to publish its 2023/24 loan rates, but should they amount to a significant real-terms cut, we will absolutely call on the Scottish government to improve its offer.
Why should you sign this petition?
Still unsure if you should sign the petition? Here are just a few of the reasons to help us #FixStudentLoans:
- Universal Credit and pension payments have risen with inflation – There was public outcry at the prospect of these funds rising below the rate of inflation and, as a result, the government committed to increasing both in line with inflation. As the equivalent form of support for students, it’s only fair that Maintenance Loans increase at the same rate.
- Parents can’t afford to subsidise their children – Reducing the value of the loan in real terms means more students will rely on their families for help, and to a greater degree than ever before. But parents are being squeezed by the cost of living crisis too, and many can’t afford to sacrifice £100s more every month to help their children.
- The Maintenance Loan was never enough in the first place – We’ve long argued that the loan isn’t enough to live on, so these real-terms cuts are diminishing the value of what was already a pittance.
- Students have had almost no cost of living support – With the exception of the £400 energy grant, most students couldn’t claim support from any of the government’s extra cost of living support funds, despite being among the lowest-income groups in the country. In fact, even the energy grant was inaccessible to many, including all students living in halls.
- Universities are less able to help – The government has frozen tuition fees in England yet again, meaning universities have also seen a real-terms cut to their income from UK students. The government has repeatedly passed the responsibility of helping students onto unis, but many are now facing financial struggles of their own and unable to do so.
What else can you do to help?
Signing our petition is super helpful, and sharing it with your friends and family (and anyone else, really!) is better still.
We’d also encourage you to write to your MP, asking them to put pressure on the government to review this decision and increase Maintenance Loans to an adequate amount in 2023/24.
We have published a template letter to MPs for you to use, which includes instructions on how to find their contact details.
Finally, please encourage your SU to back this campaign if they haven’t done so already. The 2023/24 Maintenance Loan rates affect all students from England, and everyone will suffer if the government doesn’t bridge the shortfall that’s emerged over the past two years.