Research conducted by The Guardian has revealed that vice-chancellors across the UK are paid significantly more than others in executive positions across the public sector, including senior figures of NHS hospital trusts and local authorities in several cities.Written by Thom Dent on 21st March 2018
Majority of Students Spend Over Half Loan on Rent
Students nationwide are spending up to 65% of their student loan on rent according to research by Studenttenant.com
A ‘critical shortage’ of student accommodation has led to an increased demand for high- quality housing, which is causing landlords to either increase rents or leave the student housing market altogether. Rent has risen as high as 18% over a year in some areas and students are up to £600 poorer as a result.
According to The Complete University Guide’s 2017 data, Birmingham is the 16th cheapest university city to live in the UK. However, this is down 11 places in just one year, reflecting a comparatively steep increase in student accommodation costs in the city.
The amount of loan that students are entitled to varies according to the financial circumstances of the student. Students on average face £45,000 of debt on graduating, in addition to £5,800 in interest payments. Students from the lowest income families will leave with the highest debt levels - reaching over £57,000 on average - following the replacement of maintenance grants with loans. Three quarters of students will never repay these loans according to the Institute for Fiscal Studies (IFS).
The increasing share of loans being allocated to housing costs in student budgets reflects the national picture of the UK’s current housing crisis. Shelter last week released research showing that around 300,000 or 1 in 200 people are now homeless in the UK.
Student living costs have been squeezed further by increasing food price inflation in 2017.
Student loans are the chief source of income for the majority of students. Only 28% of students work part-time according to the Office for National Statistics (ONS). Furthermore, students working part-time who are aged under receive a minimum wage that is lower than the so-called ‘National Living Wage’ rate. The IFS has found that average incomes are 25 times lower in the West Midlands than the South East.
The ONS shows that ‘private rental costs paid by tenants in Great Britain rose by 1.6% in the 12 months to September 2017’. The index of private housing rental price percentage change has been increasing in the West Midlands in the years following the 2008 global financial crisis.
Rent for University of Birmingham-owned accommodation costs on average £100 per week for a private house, £140 for self-catered halls and £175 for catered halls. Median private rent in Birmingham is £700 per month according to home.co.uk.
Ross, 23, a second-year Medicine student at the University of Birmingham will have to move house again following news that his rent is due to increase next year: ‘my landlord has increased my rent for the following year but my student loan has stayed the same. I think rent is already too high and students shouldn’t be in a position where they are struggling to pay their rent’.
If the current high demand for student accommodation increases or stays at its current levels, more students like Ross will likely find themselves spending even more of a proportion of their loans on increasing rents.
Article by Miki Leigh