Personal finance campaigner slams government’s 2.5 per cent loan increase for England
Savings guru Martin Lewis has told the chancellor of the exchequer that his plan to increase maintenance loans for students in England by just 2.5 per cent will mean the payments “are not enough for some to live on”.
The government said last week that maintenance loans for disadvantaged students in England would increase by 2.5 per cent in 2024-25, following a 2.8 per cent rise last year. Inflation is currently running at 4 per cent and was around 8 per cent on average last year.
Lewis, a high-profile financial journalist, wrote to chancellor Jeremy Hunt expressing concern that the real-terms cut to payments could prevent some students from attending university.
“English student living loans have been cut in real terms and are not enough for some to live on,” he said in the letter.
“As this has happened during a time when rents have rocketed, the shortfall in funding risks depriving those students of the ability to go to courses, and risks increasing drop-out rates while there.”
In a statement, Lewis said the 2.5 per cent increase was “another nail in the coffin of student finance”.
“Having enough money to pay the rent and bills is a problem for students,” he said. “The system has long been creaking. I hope this latest cut doesn’t make it finally crack.”
Following the announcement of the increase, minister for skills, apprenticeships and higher education, Robert Halfon, said the rise “follows standard procedure to base annual increases in support on forecasted inflation”.
Meanwhile, the National Union of Students (NUS) has launched its manifesto for the next general election, which is expected to take place later this year.
It calls for the uprating and backdating of maintenance loans in line with actual—as opposed to predicted—rates of inflation, as well as a commitment to bring back fairly funded maintenance grants for disadvantaged students.
NUS vice-president for higher education Chloe Field said: “Students have become the crisis generation. We need real action from politicians to break the cycle of crises, including the reintroduction of grants and abolishing tuition fees.”