English university students will be nearly £2,000 worse off next academic year if maintenance loans rise only by the projected rate of inflation, the Russell Group has warned.
New rates for what undergraduates can borrow to cover their living costs are expected to be announced by the government in the coming weeks, but the group of research-intensive universities said any rise was unlikely to offset the below-inflation increases seen in recent years.
The loans are set using inflation forecasts – rather than the actual current rate of inflation – and last year’s increase was worth 2.8 per cent, which is what the government’s Office for Budget Responsibility (OBR) was predicting inflation would be in the first quarter of 2024.
In fact, inflation – as measured by the retail price index excluding mortgages (RPIx) used by the government to set the loans – stands at 4.1 per cent, and there is no mechanism in place to correct the loan amount if forecasts turn out to be wrong.
