HEPI Report Warns of Growing Gap Between Student Support and Living Costs

International Students Under Financial Strain Despite Visa Requirements

A new report jointly published by the Higher Education Policy Institute (HEPI), TechnologyOne, and the Centre for Research in Social Policy (CRSP) at Loughborough University highlights the intensifying financial pressures faced by first-year university students, with international students particularly affected. The study emphasises that a minimum socially acceptable income is essential not only to meet basic needs but also to enable meaningful participation in university life.

The issue is especially acute for international students, many of whom arrive in the UK underfunded despite meeting visa requirements that demand proof of financial readiness. It is increasingly common for students to borrow funds temporarily to satisfy entry conditions, only to struggle with living costs once enrolled. The report draws attention to the inadequacy of current government guidance on expected monthly expenses,£1,334 in London and £1,023 elsewhere, which fails to reflect the actual cost of student living.

HEPI, established in 2002 as an independent and non-partisan think tank, continues to shape higher education policy through evidence-based analysis. It is funded by universities and organisations committed to robust policy debate. TechnologyOne, a global Software as a Service (SaaS) provider, supports financial sustainability in the sector by offering integrated enterprise solutions that streamline operations and reduce risk. Their collaboration with CRSP underscores the urgent need for universities to reassess student support systems, particularly for international cohorts who contribute significantly to institutional income yet face disproportionate financial hardship.

The report recommends that universities expand hardship funds, improve financial transparency, and adopt technology-driven solutions to better manage student support. With international enrolments declining due to policy changes and cost-of-living pressures, the sector must act decisively to ensure financial barriers do not undermine access, wellbeing, or academic success.

The Minimum Income Standard for Students was calculated using focus groups drawn from various university cities to determine the cost of a basic basket of goods and services required for student life. Researchers focused on first-year students living in Purpose-Built Student Accommodation, such as halls of residence, and found that, excluding rent, a student would require an average of £260 per week for living expenses. Including rent, this figure rose to £418 per week.

First-year students often face higher weekly costs due to a “first-year premium,” which includes set-up costs such as purchasing a laptop, kitchen utensils, and bedding, as well as settling-in costs linked to freshers’ week and adjusting to independent living. Costs also vary by location, with annual living expenses estimated at £21,126 in England, £18,244 in Northern Ireland, £19,836 in Scotland, £20,208 in Wales, and £24,900 in London, where rent accounts for nearly half (46%) of total costs.

For students domiciled and studying in England, the maximum maintenance loan of £10,544, available only to those from low-income households, covers just 50% of a first-year student’s living costs. In Scotland, maximum support covers 59% of costs, while in Wales the figure is 63%. Students from Scotland studying in London face the largest shortfall, as they do not receive London weighting; their maximum support covers only 46% of costs, leaving an annual gap of approximately £13,500. The authors estimate that a three-year course in England (outside London) requires around £61,000 for a minimum socially acceptable standard of living. For London students, the figure rises to £77,000.

These estimates exclude tuition fees, which stand at £9,250 per year in England and Wales for 2024/25, increasing to £9,535 in 2025/26. Including tuition fees, a three-year degree in England could cost around £90,000, and more than £100,000 in London. Four-year degrees would cost proportionately more. Home students are typically eligible for tuition fee loans covering the full fee. The report also examines the hours of part-time work needed to meet minimum living standards. Even with maximum maintenance support, students in England would need to work over 20 hours per week during term time and vacations at the National Minimum Wage to cover basic costs. The authors recommend redesigning student maintenance support to prioritise simplicity, transparency, independence, sufficiency, and fiscal neutrality.

In the concluding section, co-author Josh Freeman identifies three major risks for UK higher education: growing inequality in access, declining quality of the student experience, and threats to sector sustainability. He stresses that the harm faced by students cannot be overstated, with many struggling to afford necessities and unable to fully engage with university life. He argues that beyond sound policy, there is a moral responsibility to ensure students have a fair chance to succeed.

Nick Hillman OBE, Director of HEPI, notes that it is regrettable that such calculations are necessary, as ideally the government would already understand the true costs of student life. He suggests that if policymakers had this understanding, maintenance support would more accurately reflect financial realities. He reiterates that living costs for a degree now exceed £60,000 in England and £90,000 with tuition fees, rising above £100,000 in London. He warns that inadequate support is forcing students into substandard living conditions, excessive paid work, or high-interest debt.

Hillman hopes the findings will prompt deeper discussions on the adequacy of current support packages, the scale of expected parental contributions, and the reasonableness of expecting full-time students to undertake significant paid work during term time. He believes the research will be valuable for policymakers, academics, and parents seeking to understand the financial pressures faced by young people.

The research highlights a growing disconnect between student expectations and the reality of university life. Rising living costs and limited financial support are placing students under increasing strain, while institutions face mounting pressure to deliver on their commitment to student success. It is acknowledged that universities are working hard within complex and resource-limited environments, and that staff remain dedicated to supporting students. However, without appropriate tools and insights, it is difficult for institutions to intervene early or achieve meaningful outcomes. Outdated systems limit both visibility and responsiveness, and supporting student success now requires more than incremental improvements. Modern, integrated technology is needed to provide a comprehensive understanding of the student journey and enable timely, data-driven action.

The authors argue that technology should be viewed not merely as a back-office function but as a strategic driver of student success. Such tools can help universities strengthen engagement, well-being, and performance at scale. In a rapidly evolving higher education landscape, where the student experience is being redefined, institutions have a significant opportunity to lead through innovation. Professor Matt Padley, Co-Director of CRSP and co-author of the report, states that the research offers a clear view of what students require to meet their basic needs while participating fully in university life. He emphasises that participation, through socialising, joining clubs, and engaging in societies, is essential, particularly during the first year when students are building connections and adjusting to independence. He notes that the challenge of finding one’s footing is compounded when students must weigh the costs of “settling in” against essential expenses such as rent and food.

Padley concludes that this evidence should form the basis for an urgent conversation about the financial support available to students. He stresses that addressing non-tuition costs is not only about increasing financial aid but also about reducing living expenses. HEPI and TechnologyOne have announced a free webinar on student living costs and maintenance support levels, scheduled for 10 September 2025, at 12.30 pm. The report calls for immediate action to ensure that financial hardship does not compromise student wellbeing, access, or success in UK higher education.

Editor’s Note:

The latest report from HEPI, TechnologyOne, and CRSP offers a sobering view of the financial realities facing university students in the UK, particularly those in their first year and international cohorts. The findings reveal that the cost of a socially acceptable student life now exceeds £90,000 for a three-year degree in England, and over £100,000 in London when tuition fees are included. These figures are not merely statistical; they represent a growing disconnect between policy assumptions and lived student experience. International students, crucial for institutional revenue, face disproportionate financial hardship despite meeting visa requirements. Many arrive under-financed, burdened by high living costs, limited work access, and insufficient support. Government expense guidance (£1,334 in London, £1,023 elsewhere) is unrealistic, with rent often consuming nearly half a student's budget. Maintenance loans in England cover only 50% of first-year student living costs, and even less (46%) for Scottish students in London. This forces students into excessive work, poor living conditions, or high-interest debt, harming their academic focus and well-being. Other countries offer better models: Germany has free undergraduate education, Scandinavian countries fund tuition and living costs, and Australia/UK use flexible income-contingent loans. The US, however, is a warning with over $1.5 trillion in student debt, often disconnected from earnings. To address these challenges, UK policymakers and institutions must adopt a multi-pronged approach that ensures both fairness and sustainability in higher education. Maintenance support should be redesigned to reflect actual living costs, incorporating regional weighting and simplified eligibility criteria to make the system more transparent and accessible. 

Hardship funds and emergency grants must be expanded, with particular attention to the needs of international and disadvantaged students. Investment in integrated technology systems is also essential, enabling universities to monitor student wellbeing effectively and intervene at an early stage. At the same time, reforms in the accommodation market, especially in high-cost cities, are needed to promote affordability and transparency. Finally, cross-sector dialogue should be encouraged, drawing on best practices from global models that view education as a public good and a driver of societal progress.

Skoobuzz asserts that urgent action is needed to protect student wellbeing and ensure the sustainability of UK higher education. Financial hardship must not hinder learning or compromise the student experience.