PETITION: increase Student Loans in England to catch up with inflation

Student Loans have fallen massively behind inflation, leaving many unable to even cover the cost of food. We're campaigning for the government to increase funding and save students.

Credit: Michaelpuche (background) – Shutterstock

UPDATE: This petition has now closed. Read more below about how we intend to continue campaigning on this issue.

We can all agree that students should have enough money to keep a roof over their heads and put food on the table. But, for far too many students, this is no longer possible.

Over the past few years, Maintenance Loans in England have fallen well behind inflation. As a result, the maximum loan – which was never really enough to live on in the first place – is now about £1,900 less than it would have been had it kept up with inflation. In effect, the Student Loan has been cut.

And the situation we find ourselves in isn't just bad luck. In Northern Ireland, Scotland and Wales, their governments saw how students were struggling with the cost of living crisis and boosted loans by between 9.4% – 40% in 2023/24.

But in England, the government chose to increase Maintenance Loans by just 2.8% – despite knowing that this would amount to a huge cut in the value* of the funding.

The impact of this has been absolutely devastating, with students from all backgrounds now worse off. Our most recent survey found that 18% of students had used a food bank in 2022/23 (almost double the amount from the previous year), while a shocking 64% told us they skip meals at least some of the time.

The financial struggle that students are facing is getting worse, and this government cannot simply stand by and allow young people to go without food or contemplate dropping out of university.

That's why we relaunched our petition, calling on the government to increase Maintenance Loans in England to catch up with inflation.

What's happened to Maintenance Loans in England?

As you probably know, the rate of inflation (the increase in the cost of goods and services) has been very high over the past couple of years.

In fact, between September 2021 – September 2023, inflation (RPIX) was 21%. This means that, on average, things cost about 21% more in September 2023 than they did two years earlier.

It also means that money is worth less than it was back then. For example, if a loaf of bread cost £1 in September 2021, you could have bought 10 loaves for £10. But if the price increases by 21% to £1.21, you can only buy eight loaves with your £10.

So, unless your Maintenance Loan also increases at the rate of inflation, it will cover the cost of fewer things – in other words, its value falls in real terms.

How does inflation affect Maintenance Loans?

Rocketing inflation would have been problematic enough for students. But crucially, it's also been much higher than economists had 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 been cut in real terms.

According to our 2023 National Student Money Survey, this real-terms cut means that, on average, Maintenance Loans now fall short of living costs by a huge £582 every month. This shortfall has more than doubled since 2020, and the loan now covers less than half of the average cost of living.

When they were setting the 2023/24 Maintenance Loan rates, we believe this government should have increased the value beyond the projected rate of inflation to account for the errors made in the previous few years. But instead, they simply increased it at the projected rate (2.8%).

Worse still, as Maintenance Loans increase as a percentage on top of the previous year's amount, these errors are becoming a permanent feature of the system – even as inflation returns to more normal levels.

Unless this government corrects the mistakes of previous years and ensures Maintenance Loans catch up with inflation, students will continue to be significantly worse off every single year.

Why are we only demanding change in England?

In 2023/24, only the English government set Maintenance Loan rates that left students significantly worse off than in previous years. The 2024/25 rates will do nothing to help this.

In Northern Ireland, Maintenance Loans increased by 40%. This was a huge rise, but it's worth noting that the value of the loans had been frozen since 2010, so it was long overdue. While there's not set to be any change to funding levels in 2024/25, the 40% increase in 2023/24 was still a hugely positive move.

In Scotland, each band of maintenance funding increased by £900 on the 2022/23 levels. This represented an increase of between 11.1% – 17.6%. In 2024/25, all students will receive an extra £2,400 of funding in the form of a Special Support Loan.

Meanwhile, in Wales, where the value of maintenance support is tied to the National Living Wage, loans increased by 9.4% in 2023/24. In 2024/25, loans will increase by 3.7%.

UPDATE: The petition closes, plus our next steps

On 25th January 2024, the government announced that Maintenance Loans would increase by 2.5% in 2024/25.

This was in line with projected inflation, but will do nothing to address the real-terms cuts to the Maintenance Loan seen over the past few years. In fact, analysis by the Russell Group has found that students will now be missing out on up to £1,906 of funding next year, compared to if loans had kept up with inflation since 2020/21.

Shortly afterwards, the government also responded to our petition – something they were obliged to do after it reached 10,000 signatures. The image below contains the shortened response, but you can view the full version by heading to the petition page.

The petition closed after reaching the six-month mark on 8th May 2024. In total, over 15,500 of you put your names to the campaign, sending a strong message to all political parties about the importance of this cause.

And although the petition has not yet led to the change we want to see, the announcement of the General Election has provided another opportunity to make it happen.

Increasing Maintenance Loans to catch up with inflation is the number one ask in our 2024 General Election manifesto, and is something we want to see all political parties commit to.

But should the next government decide not to give students the extra funding they need, we are committed to working with organisations across the university sector to continue raising awareness and putting pressure on politicians.

Check out the other demands in our 2024 General Election manifesto.