March 2nd, 2020
Whilst university can be one of the most memorable and enjoyable times of life it can also be extremely stressful for young people.
For most it’s the first time they’ve ever lived away from home and initially can struggle with meeting brand new people, learning new skills like cooking and, ultimately, how to budget and manage their own money and bills.
With the cost of living for students increasing and bursaries and maintenance loans being cut, this task has become more crucial for today’s students and helps give us insight into their financial behaviours.
With privately provided accommodation now dominating the student accommodation market, it’s also become more expensive to rent too. The quality has increased dramatically but there is also a recognition that the government needs to review how students sustain themselves whilst at university.
Purpose Built Student Accommodation (PBSA) has exploded in popularity thanks to a number of factors such as universities scaling down their own provisions, better facilities and better locations. This does now take a significant proportion of a student’s income, however, and there is a growing consensus that students need better financial support through education and funding.
The research was performed by Save The Student and surveyed over 3,000 students across the UK to ask them questions about how they manage their money and what stresses them out.
Apparently the average monthly cost of rent for students is £431, which is the number one outgoing. Groceries is second at £92 per month, with going out third at £49 and travel at £44.
With students happier to pay for better accommodation, the risk is that a normal maintenance loan would only cover about two-thirds of even a reasonable budget. 74% of students said they also needed money from their parents and 67% said they had a part-time job to be able to afford to live.
With that in mind, it’s shocking that 1 in 6 students still don’t budget their money month-to-month, instead improvising as they go. Not just that, a huge 77% of respondents said that they had never been shown how to manage their money before going to university.
It was also found that 44% felt that they hadn’t been told about grants or funding that they were entitled to and missed out on. This appears to be an easy issue to address for the government and universities, by doing some promotion about the schemes that students are eligible for.
Student accommodation is big money for investors and provides some of the best yields on the market, and it’s only going to grow over time, but pressure needs to come from everybody in the industry to recognise the true cost of living for students.
It’s true that for now, students are just about able to manage but that won’t last forever with rising costs. If nearly three quarters of students are relying on parents for financial support, then bursaries and maintenance loans need to be increased.
Similarly, there is scope to provide tax incentives to employers for taking on students and paying them better wages. High earning part-time jobs would certainly allow students to live more stress-free and relive the pressure from parents too.
Ultimately, more research needs to be performed to find the true cost of living for students and provide them with the support they require, which also includes financial education which could easily be provided by the universities themselves.
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