7 ways the cost of living crisis is impacting students

Based on a survey of 1,000 students, the Student Money & Wellbeing Report has always been a way to see how economic events impact students’ everyday lives. 

Year after year, the events that are most pronounced change, and this year it was the cost of living crisis that had shifted from the periphery into full focus. 

Students now live in a world where everything, from their monthly bills to daily necessities, has risen significantly in price. But sometimes, simply looking at rising costs and inflation figures isn’t enough to appreciate the full impact of large-scale economic events on the ground level. 

That’s why the findings in this year’s report aimed to shed light on the real ‘cost’ of the cost of living for students, including:

• What is the reality of student finances in 2023? 
• How has the cost of living crisis compromised financial support from parent(s) and guardian(s)?
• How is the cost of living impacting students’ health and wellbeing?
• What are students having to do to cope with the rising cost of living?
• To what extent are students working to fund their studies? 
• How is the cost of living crisis impacting students’ academic attainment? 
• How do students feel about their financial future?

Overall, this year’s findings presented a very different picture from our reports over the last couple of years. Here’s an overview of the seven main areas of student life the cost of living crisis is impacting most. 

(Download this year’s report for detailed findings and suggestions of next steps for universities, colleges and the HE sector as a whole.)

1. What is the reality of student finances in 2023?

The gap between what students need and have has widened considerably in the past 12 months. On average, students say they need £548 extra a month to feel confident they will be able to complete their degree. 

That means the shortfall between what students need and have has increased by more than a third (39%) from 2022’s gap of £395 and by 67% since 2021’s gap of £329.

Consistent with our 2022 findings, the financial disparity between genders also continues to grow. Female students* have significantly less to spend than their male counterparts and are short an extra £120 each month (£607 compared to £487 for males).

The financial gap between the genders has grown 20% since last year. Throughout the report, we see that female students have been hit harder by the cost of living crisis than their male peers.

2. How has the cost of living crisis compromised financial support from parent(s) and guardian(s)?

The ‘Bank of Mum and Dad’ has long been a resource that students turn to when money is running low. But when households are struggling so much with rising living costs caused by the cost of living crisis, this support may not be as readily available. 

Of the students who are aware of the cost of living crisis having an impact on their parent(s)’/guardian(s)’ finances, 65% say the cost of living crisis has impacted how much their parent(s)/guardian(s) can help financially. A further 32% from this group are unable to get as much financial support from these sources.

This has led to almost a quarter (23%) of the total 1,000 students surveyed being reluctant to ask their parent(s)/guardian(s) for help because they’re aware their caregivers are struggling financially themselves.

As a result, students are becoming isolated by their money worries and, understandably, this is having a significant emotional impact. Of the students who say the cost of living crisis has had an impact on how much their family are able to support them financially:

• 42% feel stressed
• 37% feel worried
• 37% feel guilty 
• 30% feel sad

3. How is the cost of living crisis impacting students’ health and wellbeing?

Almost 9 in 10 students (87%) worry about their finances, an increase from 75% in both 2022 and 2021. 

Previously unmoved by the financial pressures of Covid and multiple lockdowns, it’s the cost of living that has now shifted this figure. 

58% of students who worry about money say it negatively impacts their mental health. From this group, a further 94% say it triggers stress and 77% say it can lead to feeling hopeless. 

Of the students who say they worry about their finances, this growing sense of financial worry has impacted critical areas of their wellbeing, including:

• Sleep – Almost half (46%) say money worries affect their sleep
• Physical health – 30% say this is impacted

Also, of the original survey sample of 1,000 students there are additional areas of wellbeing being impacted by money stress, including:

• Hunger – Over a third (34%) have gone or considered going hungry or cutting down on their daily meals due to a lack of money caused by the cost of living crisis 
• Personal hygiene – 1 in 6 (16%) of the students surveyed have cut back/considered cutting back on personal hygiene and 9% of female students have had to go without period products

4. What are students having to do to cope with the rising cost of living?

Students are having to make difficult choices about everyday necessities, with money-saving measures cutting deep into their standard of living. 

The most common action taken by students to try and combat the cost of living crisis is cancelling or missing out on social plans (46% have or have considered in the last 12 months), as maintaining a social life becomes more expensive. 

For other students, there seem to be three main approaches when it comes to coping with the cost of living:

1. Cutting back on basic needs to save money – 39% avoid turning the heating on, 34% are going hungry/eating less than their usual number of meals a day
2. Accruing new debt just to afford what they used to be able to – 23% of students surveyed reported that they have considered using Buy Now Pay Later. 16% have taken on or considered taking on a new overdraft (excluding a free student overdraft) and 15% have taken on or considered taking on a new credit card
3. Compromising their academic attainment – 56% received a lower grade in an exam or assignment as they avoided purchasing the necessary books or equipment required

5. To what extent are students working to fund their studies?

Some say that students struggling with money should simply ‘get a job’, but 78% of students surveyed already have one. 

Further to this, 1 in 5 students has had to get a second or additional job as a result of the cost of living crisis. 

Just under 1 in 3 (31%) students are working more than 15 hours a week – which is the amount most typically recommended as a maximum by universities before work commitments start impacting studies. 

However, our findings show the types of work female and male students are using to support themselves financially differ:

• Male students – have taken on more hours at work (30% of males vs 25% of females) and 70% more males than females have taken on a new job in addition to one way they were already working 
• Female students – Whereas, over the last 12 months, 55% more females than males have found other, perhaps ad-hoc, ways of making money to cope with the cost of living crisis

Ultimately, our findings debunk the myth that students aren’t working. In fact, many are trying to find any additional revenue streams so they can cope with rising costs.

6. How is the cost of living crisis impacting students’ academic attainment?

The cost of living crisis is providing a very real challenge for students and, for many, detracting their focus from the very reason they’re in higher education in the first place – to earn a degree or qualification. 

76% of students are worried that the rising cost of living will have a negative effect on their final degree result, while 60% of students have received a lower grade than expected on an exam or assignment in the last 12 months because of job commitments. For first in family students, this figure rises to 67%.

The hardest-hitting findings

• 60% of students have received a lower grade than expected because they were too cold to study as a result of avoiding turning the heating on 
• 60% have received a lower grade due to spending too many hours working to earn money and so not having enough time to study
• 55% have received a lower grade because they were too hungry to study or focus

For students to be distracted by part-time work is one thing. But to be distracted from their studies by coldness or hunger really shows how serious the impact of the cost of living crisis is for students. 

Download the report for more on this.

7. How do students feel about their financial future?

2 in 5 students say that worrying about money negatively impacts their optimism about the future. 

Their biggest concern is the rising cost of living, with 78% of students worried about it. 

As bleak as these findings may be, many students still manage to maintain some optimism for the future, especially when looking further ahead to 5+ years after graduation. 

This indicates that – on a positive note – for these students, the value of a degree-level education is still a worthwhile investment for their futures.

Learn more about the findings

This overview has only skimmed the surface of some of the key findings in this year’s Student Money & Wellbeing Report. 

The full report goes much deeper into how the cost of living is being etched into the student experience, permeating almost every area of student life and therefore demanding an urgent response to support students.

Get your copy now and discover suggestions for university and college support staff, leadership and the HE community as a whole, with contributions from Lee Elliot Major OBE and Lynne Condell MBE.

*When referring to males and females throughout this report, this is in reference to people who chose to identify as either male or female at the beginning of the survey

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