The increasing expense of attending university in England puts direction on charging students for their education, leaving many students feeling overwhelmed by their financial obligations. New evidence from the Higher Education Policy Institute (Hepi) lays bare a stark truth. The maintenance loans provided to students in England do not even cover the average rent, leaving many students on the edge of survival after housing costs. This tuition burden represents a major hardship for students who lack a family safety net or the opportunity to take on part-time employment.
With the rising cost of living and tuition growing every year, that financial landscape is growing more unstable for students. Starting in August 2025, the yearly price tag for an undergraduate degree in England and Wales will nearly double. It will instead increase it from £9,250 to £9,535. Average annual rent in the top ten university towns and cities has increased nearly 647%. It increased from £6,520 in 2021-22 to £7,475 in 2023-24. In London, the crisis is deepening. For the 2024-25 academic year, the average rent for purpose-built student accommodation has increased to £13,595.
With inflationary pressures taking their toll, we know the maximum maintenance loan for students from England living away from home and outside of London is set to rise. It will increase from £10,227 to £10,544 a year. Needless to say, this is not the first time we’ve heard that an increase of funding. It fails to fully bridge the gap between students’ income and their needs. Martin Lewis, the U.K.’s most well-known financial advisor, cautions against the danger of longer loan terms for student debt. He claims that this will lead to thousands of pounds in additional expenses for lower and middle-class earners.
Even disparities in educational attainment background affects the earning potential of graduates. Statistics reveal that 46% of those graduates in the highest quintile of earners at age 30 graduated private school. By comparison, just 22% of graduates in this same category were eligible to receive free school meals. Alarmingly, just one in five graduates who were formerly eligible for free school meals went on to take up roles in the highest-earning fifth of professions. In comparison, almost half of graduates who attended private schools made it into this upper-income tier.
More broadly, the consequences of these findings underscore the persistent barriers to social mobility within higher education. With selective universities—such as those in the elite Russell Group—Sutton Trust says attended by young people increases their prospects for social mobility. This gives them much better chances for success later in life. That points to the conclusion that access to a high-quality education is key to achieving financial success post-graduation.
These financial pressures on students are only exacerbated by employment trends. Instead, full-time undergraduates are placing more and more importance on paid, term-time work. Three years ago only half of them were employed and that share is projected to soar to 68% by 2025. This change comes in part from an increasing demand among students for more flexibility as they juggle academic responsibilities with the pursuit of earning more money.
The Office for Students, the higher education regulator in England, has sounded the alarm. They are right to be concerned about the financial sustainability of our universities’ business model. Nationally, reports suggest that over 40 percent of colleges and universities expect to face financial shortfalls by the summer of 2025. This alarming state of affairs is deeply troubling. Otherwise, institutions will find it increasingly harder to deliver a high-quality education while fighting against growing costs of operations in perpetuity.
