The influence of cost of living on student decision making

This blog has been kindly written for HEPI by Jo Richards, Senior Insight Lead at UCAS. 

The cost of living is the topic at the top of everyone’s minds over the past year, and it is likely to be with us for a while. Students are one group that have been particularly affected by rises in the cost of living, as rent and the price of food have gone up against a backdrop of maintenance loans being lower in real terms compared with 2021.

Universities UK issued a stark warning in December 2022 that students ‘risk becoming the “forgotten group” in the cost of living crisis.’ But what about students who have recently submitted their UCAS application for September 2023 entry – what impact has the cost of living had on the decisions they have made over the past year?

We surveyed and listened to students to find out how cost of living factors were influencing the decisions they had made, and those they were about to make. 

On-going consistency in student decision making factors 

Here at UCAS, unsurprisingly, we saw high levels of awareness and concern about the cost of living among applicants for 2022 entry, and what it means to them regarding their student experience. But despite seeing more confirmed applicants using their ‘Decline my place’ option at the end of the cycle to study at institutions closer to home, which may have been prompted by cost considerations, decision making in general remained quite static, with no real change from what you would see in a normal year. 

As we moved into the 2023 entry cycle, and the rising costs of living have had more time to take hold, with many prospective applicants experiencing the effects on their daily lives, understandably these concerns continued. While this blog looks to add to the debate around the impact of cost of living on progression to higher education, it is important to note there may be a cohort of individuals who have chosen not to engage with higher education or training (and therefore with UCAS and our surveys) because of increasing living costs for them or their family before this point.

Indeed, main scheme UK applications for deferred entry represented 3.4% of all applications at the January equal consideration deadline – the highest at this point for many years – with the main reasons being taking a gap year to travel, needing to earn some money to support themselves before they start, and wanting to get work experience. While those needing to earn to support themselves hasn’t increased substantially since last year (+2%), it does demonstrate financial concerns are a motivator for many of those who choose to defer. 

Among those who did engage, which is over 6,800 prospective students, the findings highlighted changing expectations. Many were thinking ahead to a student experience that might be very different to the one they had originally expected; whether that is preparing for part time work, and the knock-on effect on time available for study, or making the most of the extra-curricular opportunities available to them, over half had lowered their expectations about student life. Our research with students suggests that is with good reason. Financial concerns on campus are high: 43% told us they were working part time because of the cost of living.

But asking students what will impact conversion, and how they will make their choices throughout the coming months, shows long-term consistency in those core decision-making factors. Despite an increased focus on the cost of living, students are telling us they will be looking for the course that best suits their ambitions and needs, they will be listening to other students and reading reviews and they will be thinking about their longer term outcomes by looking at graduate opportunities and what future their study will lead to. That is no surprise – having spoken to thousands of students over the years, we know the move to university often evokes excitement about a move to independence and to studying a subject you love and are passionate about, but that also stokes nervousness as people step up to studying at a different level and with a worry about whether they will settle in and make new friends.

Ruling out options earlier

Despite this consistency across student decision-making factors, the full picture is less black and white, as  focus group research highlights how some students are ruling out places earlier in the discovery, decide and application cycle due to the cost of living.

One striking example of this was seen when discussing attendance at physical Open Days, an activity that’s seen by many students, teachers, parents and universities as a vital component of their university research, with one student sharing that they only attended one university open day because it was too expensive for them to visit all of their choices due to the prices of train fares.

Others stated that they’d instantly discounted universities in certain cities and regions because they knew it would cost too much, despite considering them before. By restricting their opportunity to explore the different potential environments, they have reduced the options available to them before they even apply. This was particularly seen among widening participation students, with those living within POLAR quintile 1 and 2 neighbourhoods less likely to have attended open days due to the cost. Previous research has also shown that these students are more likely to agree the cost of living is likely to impact their student experience, and to plan to apply for financial support.

We have a duty as a sector to make sure that we are putting support and interventions in place to ensure widening participation students are not more greatly affected than their advantaged peers. 

Communication is key

Improving the communication we deliver to prospective 2023 entry students is therefore essential if we are to minimise the indirect influence the cost of living is having on their decisions. One outcome from COVID has been that university communications have become more important within student decision making, with the cost-of-living emphasising this even further. Many students could not recall seeing any cost-of-living related information in communications from chosen universities, but as we enter the conversion period there’s an opportunity to share information that helps students to prepare and allay their fears and concerns over a ‘missed’ student experience.

There is a desire from students to gain practical tips on how to live day to day at university and areas where they can reduce costs to help prepare them for September. While many are imagining a different student experience, they still want to know that they can take advantages of benefits such as networking and societies, and are looking for mitigation strategies to ensure they can still experience their personal ‘non-negotiables’ of student life; often planning to get a part-time job as soon as possible to help pay for them. Universities therefore may need to consider pivoting their conversion communications to include part-time work, both preparing students to find a job but also offering strategies to effectively balance work and their studies, as well as a maintaining a consistent drum beat of reassuring information as students navigate their choices.

UCAS offers a range of support for students, including our cost of living support hub.  UCAS will continue to talk and listen to students throughout the cycle to understand the impact the cost of living is having on them and where best, as a sector, we can help them.