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English student living loans to rise by 2.5% in September – a real-terms CUT that will leave many struggling, warns Martin Lewis

English student living loans will rise by 2.5% from September, the Government has announced. But with inflation currently at 4%, it means students will see ANOTHER real-terms cut in the amount they get to help them with living costs. MoneySavingExpert.com (MSE) founder Martin Lewis has warned that this is one of the biggest practical problems for students, with some not having enough money to live on.

For the 2024/25 academic year, both new and existing English students, regardless of where in the UK they study, will see a 2.5% increase in the amount they receive from a loan designed to help with living costs – called a maintenance loan. This uplift falls well short of the current rate of inflation, which stands at 4% – so the purchasing power and affordability of students relying on the loan will again see a real-terms cut.

This is just the latest in a series of cuts to maintenance loans, since inflation started to spike in 2021. For the 2023/24 academic year, students got a 2.8% rise even though inflation was in double digits at 10.7%. Overall, as the table below shows, since 2021 student living loans have been running around 11% behind inflation:

English student living loan increases since 2021 vs inflation (figures for those who get the full student living loan – it's means-tested)

Academic year Living with parents Living away from home – outside of London Living away from home – in London
Loan amount 2021/22 £7,987 £9,488 £12,382
Loan amount 2024/25 £8,610 £10,227 £13,348
2024/25 loan had it risen with inflation (1) £9,674 £11,492 £14,998
Real-terms cut in loan £1,064 (11%) £1,265 (11%) £1,650 (11%)

(1) Based on Consumer Prices Index measure for each December since 2021. Source: Office for National Statistics.

The Government's own figures show the living loan would need to rise by 15.5% this year to maintain the value of the support in real terms, as compared with the 2020/21 academic year.

The issue of student maintenance loans not keeping pace with inflation is something Martin has campaigned on since inflation started to spike above 5% in 2021, following more than a decade of much lower inflation. 

The announcement comes just after Martin wrote to Chancellor Jeremy Hunt on a number of subjects, after Hunt had requested that he do so during an interview on Martin's ITV show. Within that letter he wrote this on student loans:

Martin Lewis, MSE founder.

"English student living loans have been cut in real terms and are not enough for some to live on

"As you know, I have for many years tried to help clear up confusion about the student loan system and explain how it operates in practice. The most important tenet to boost social mobility is that UK students do not need to pay for university at the point of entry, only afterwards and then only in proportion to what they earn.

"That 'no need to have funds upfront' principle is under threat right now because the living loan for students in England has been substantially cut in real terms. This is especially detrimental to those from low-income and non-traditional university backgrounds who rely on the full loan (which is means-tested based on parental income) as there are no parental funds to support them. 

"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 dropout rates while there.

"Last year, your government only uprated student maintenance loans in England by 2.8%, while inflation was running at double digits.

"There is an inconsistency here: the student maintenance loan is a seemingly arbitrary figure, yet the interest on student loans is pegged to inflation.

"This causes a problem both in actual terms, as the uprating does not keep up with the cost of living, and due to the inconsistency itself, which denies students and parents a locked-in expectation of their funding over a three-year course."

On the back of the latest rise announcement, Martin added: "This is another nail in the coffin of student finance. Too much of the media and political focus is on tuition fees. In fact, they're not a problem for students; they're an issue for graduates once they leave. Having enough money to pay the rent and bills is a problem for students. The system has long been creaking. I hope this latest cut doesn't make it finally crack."

'Hall fees exceed my son's total maintenance loan'

We've already heard from many students and parents that these loans are too low for students to live on...

If you're under 25, the amount of living loan you get is based on your parents' income

In England, the maximum loan amount depends on whether you live at home or go away to study. Within that, for most under-25s the amount is means-tested based on annual family income – the higher the income, the lower the loan.

The loan amount starts reducing with family income of just £25,000 a year – and many parents are unaware that the system implies that they should make up the shortfall, which can be £1,000s.

For full info on what this means and how it works in practice, see our Student loans in England guide, plus use our Parental Contribution Calculator to work out the proportion of the maximum loan you can expect (we don't yet have the full 2024/25 info, so see the numbers as a ballpark estimate).

Does it work the same in Northern Ireland, Scotland and Wales?

In these UK nations, the support available is a mix of loan and non-repayable grant. Previously, there's been a far higher rise in total living support in Northern Ireland, Scotland and Wales – though in some cases the amounts available are still lower than in England.

Here are the devolved governments' plans for the 2024/25 academic year:

  • Northern Ireland has confirmed it will not be increasing its maintenance support amount for the 2024/25 academic year, after raising it by 27% the previous year. It means the maximum amount available for students will remain at £8,136.

  • Scotland has confirmed there will be NO increase to the maintenance loan or grant for the 2024/25 academic year. However, it has said it will introduce a new £2,400 'special support' loan for 2024/25. This will be available on top of maintenance loans and grants to all full-time undergraduate and postgraduate students to help with general study, travel and childcare costs. 

    This means that the total amount of support available – which is now a combination of a maintenance grant, loan and the new 'special support loan' – for students in 2024/25 will rise from £9,000 to £11,400 (a 27% rise).
  • Wales will increase its undergraduate maintenance loan by 3.7% for new students, as well as for those who started their course on or after 1 August 2018.

    This means the maximum amount an average student can claim will increase from £11,720 to £12,150. This is made up of the maintenance loan and a non-repayable grant – the split between the two is based on household income.

Read more on how student finance works more generally in Northern IrelandScotland and Wales.

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