How is the cost of living crisis affecting school leavers?

Research from The Student Room finds the majority of school leavers are concerned about the cost of living and their employment prospects, writes Katie Hale

For decades, higher education has been heralded as the leading pathway for students after they have finished their A-levels. However, today's school leavers are making decisions amidst a UK recession and a cost of living crisis. Recent research conducted by The Student Room (TSR) throws light on how the economic climate is shaping post-18 pathway choices.

In September, TSR's cost of living survey1 revealed that:

• 92% were concerned about the rising cost of living.
• Three quarters believed that the cost of living was a concern for their parents.
• 47% were more worried about the cost of living than university tuition fees.
• 43% were worried about whether they could afford to go to university at all.
• Nearly a third (30%) thought their parents were worried about university costs.
• A quarter of respondents were worried as their parents were not able/willing to help with their university living costs.
• 12% said their parents had encouraged them to defer or not go to university.

So how might the cost of living crisis impact school leavers' choices? Well, for one thing, concerns about the affordability of going to university may encourage more school leavers to consider other pathways.

On A-level results day alone (18 August 2022), The Student Room's apprenticeships and alternatives to universities forum saw 26% year-on-year growth in pageviews.

Degree apprenticeships are an increasingly attractive option because they offer young people the chance to earn while they learn, avoid accumulating student debt, and still achieve an undergraduate or Masters degree. Given that 43% of the survey respondents were worried about whether they could afford to go to university, the opportunity to build skills while earning a salary could be a powerful incentive.

Nearly a third of apprenticeship starts in the 2021/22 academic year were higher apprenticeships (31%).2 Since 2018/19, the number of higher apprenticeships has grown by 47% (52% in the 19 to 24 age bracket).

Low confidence in the graduate labour market is another factor driving school leavers towards apprenticeships. In July, The Student Room surveyed 2,693 students (aged 16+) and found that 54% were concerned about finding a job when they finish their studies.

Degree apprenticeships are often provided by employers, so not only do these schemes help young people develop skills that employers need, they can also lead to long-term career opportunities.

School-leavers' perceptions about apprenticeships

While degree apprenticeships undoubtedly offer great benefits for school leavers, universities may not be in danger just yet.  Another survey conducted by The Student Room in March 2022 (on Year 13s) found that only 24% of respondents had considered doing a degree apprenticeship.

The responses to perception-based questions about degree apprenticeships also revealed that a large percentage of school leavers were not confident about the outcomes of this pathway:

• 51% agreed there was a stigma around degree apprenticeships.
• 26% agreed a degree apprenticeship would help them achieve their career goals.
• 27% agreed that a degree apprenticeship would lead to high-income employment.

In The Student Room's July 2022 Navigating Changing Options survey, 'high salary' came out as the top criterion that over-16s are looking for in their ideal career. As employers hiring for the highest paying jobs still largely require applicants to have a degree, we think the university route will remain a core choice.

Impact on university choices and applicant demographics

Returning to TSR's cost of living survey, 47% of respondents said they planned to change their university plans. A third were more likely to live at home and commute to university, while 40% were more likely to choose a university nearer home. 56% also planned to look for cheaper accommodation options.

Many of the respondents had concerns about funding their studies. Nearly half (48%) were worried about the financial impact that going to university would have on their families. Furthermore, as referenced above, a quarter of respondents are worried their parents cannot or will not help with living costs.

There is still an implicit expectation that parents will contribute factored into the maintenance loan allowance. When parents can't offer support, students must either go without or make up the shortfall by finding find alternative sources of income. If students are forced to work more hours to fund their studies this could have a negative impact on academic performance.

In addition to this, maintenance loans have not kept pace with inflation, so incoming undergraduates have less money to spend in real terms than previous cohorts. Steve West of Universities UK reported that even those eligible for the maximum loan available will now be £1,000 worse off than if they worked for the national minimum wage.3

Students are already thinking about how they can manage their finances. 37% of TSR's cost of living survey respondents said that they planned to look for universities offering bursaries or scholarships, though 41% believed they would not be eligible. 69% wanted universities to help them find work or paid opportunities and 65% wanted universities to advise them on managing their budgets.

Of course, it is individuals from disadvantaged backgrounds who are hit the hardest by financial pressures. Therefore, rising costs could also undermine widening participation initiatives. 

Without further support for prospective students from low-income families, we could see the attainment gap increase, with young people from more affluent backgrounds having greater access to higher education and the highest-paid graduate opportunities.

To find out more about how the cost of living is affecting students, download the cost of living survey results.

Notes

1. Data by TSR Insight (The Student Room's in-house market research consultancy). September Cost of Living survey: TSR Asks omnibus: respondents were 642 2023 and 2024 entry prospective undergraduates.
2. Academic Year 2021/22: Apprenticeships and traineeships, Explore Education Statistics, GOV.UK, January 2022.
3. Universities call for return of maintenance grants for students in England, The Guardian, September 2022.

Written by

Katie Hale

Senior commercial marketing executive

The Student Room