With university terms kicking off from this week, new research highlights a growing mental health and academic crisis - as a £2,600 gap between student living costs and maintenance loan allowances hits students hard, according to new research from Starling Bank.

This growing gap is putting students at an emotional, academic, and financial tipping point. Nine in ten (90%) of over 2,000 students and recent graduates surveyed say that financial worries have impacted their mental health while at university, while five in six (83%) say their academic performance has been affected as a result.

The research also reveals that the cost of student living has reached £10,227 per year on average, including living expenses, accommodation, travel, study materials and essential homeware. This cost, which leaves a £2,600 shortfall compared to the average national maintenance loan (£7,600), has surged 47% from 2016, when costs amounted to just £6,966 on average. 

“Everyone in the UK is feeling the impact of inflation, but students are feeling it harder than most, and it’s affecting both their mental health and academic performance as a result.” said Bernadette Smith, Chief Customer and Banking Officer at Starling. “It should not be this way. At Starling, we want to play our part to help students succeed and become the driving force of the economy for years to come.”

Nearly all students cutting back as studentflation squeezes daily life

Rising costs are impacting every aspect of student life, with Starling’s Studentflation Index revealing that the categories hit hardest by price hikes over the past 10 years are  general living costs (+55%), public transport (+51%) and accommodation (+44%).

Many are struggling to cover costs, even with a maintenance loan. Two fifths (41%) say the loan covers the essentials (rent, bills and food), but with nothing leftover, while one in six (16%) say it only covers rent, and 10% said it didn’t even cover that. A further quarter (23%) of current students also say they rely on university hardship funds or bursaries to make ends meet.

Over nine in ten (92%) students have had to make adjustments to manage expenses in the last 12 months. Over half (51%) have cut back on socialising or nights out, while 47% have reduced their food shop spend. A further 22% have rationed heating or electricity at home, while a quarter (27%) have missed out on the student accommodation experience by living at home to save costs.

Beyond living at home or fewer nights out, nearly all (96%) of students surveyed say they’ve taken money saving measures to minimise costs. Two in five (40%) admit to pinching food from their parent’s homes, with the same amount also walking for 30 minutes or more to avoid public transport fares.

Eva Morgan, a 20-year-old second year psychology student at the University of Sussex says, “The cost of student living is really difficult. I have to think about every penny, from the weekly shop to nights out, and I’m really having to make cut backs. Me and my friends rally together to cut costs - we split parking at uni to save on bus fares, batch cook together to save on groceries, and are honest about when we just can’t afford a night out. But it’s still hard - I’ve sacrificed lectures before just to save money on travel. It’s put me off going into further education like a Masters, as another year of living as a student just doesn’t feel do-able financially.”