£5k Cost of Living Allowance | News | University College Birmingham

November 2024

University launches £5k Cost of Living Allowance for UK undergraduates

By Melanie Hall

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University College Birmingham is delighted to announce the launch of a £5,000 Cost of Living Allowance aimed at financially supporting students during their studies as they face the rising costs of higher education and living expenses.

The University, located in the heart of the thriving city centre of Birmingham, is incredibly proud of the breadth and diversity of its student body, with a significant number of students joining from socio-economic groups that experience the highest rates of deprivation and are often underrepresented in the broader higher education sector.

Recognising the financial pressures students are increasingly experiencing, the new scheme underscores the University’s commitment to social inclusion and supporting students’ wellbeing and academic success.

This initiative is a timely one, given the recent news that home UK undergraduate tuition fees will rise to £9,535 from September 2025. Although tuition fees require adjustment following a seven-year freeze - with much of the increase offset by recent rises in employers' National Insurance contributions - there are significant concerns about the impact of higher fees during the ongoing cost-of-living challenges.

The increased costs risk deterring applicants from key target demographics: students from low-participation neighbourhoods, areas of high deprivation, those with non-traditional qualifications and individuals from ethnically diverse backgrounds. These groups remain central to the University's mission of widening participation in higher education.

The University is keen to ensure alignment to the government’s Higher Education and Skills agenda. In particular, the new Labour government has adopted the theme of ‘opportunity’ as one of its five core missions and the structuring theme of its education policy. This is also at the heart of our mission in creating the opportunity for students to access higher education in an affordable way.

The Cost of Living Allowance is part of the University’s response to growing concerns about affordability and the challenges students encounter due to increasing costs in daily living and educational expenses.

It will be available to first year UK undergraduate students who are eligible for funding under the terms of Student Finance England and who will pay their fees via a UK student loan. The £5,000 grant will help ease the financial burden for those who might otherwise struggle to complete their studies.

"At University College Birmingham, we are committed to supporting our students’ academic and personal journeys, and this scheme is a reflection of that commitment,” said Professor Michael Harkin, Vice-Chancellor and Principal.

"By easing the financial strain for our students, we’re ensuring they can focus on what matters most – their education and their future careers. We recognise that there has been some press speculation that the new government will, at a later date, consider the reintroduction of the student maintenance grant for students from low income backgrounds and the University strongly encourages the government to implement such a move across the sector.

"Should the government reintroduce a student maintenance grant, that initiative would take priority and supersede our own. In the interim period, the University feels it must act, while it is in a position to do so, to ensure our students do not feel discouraged by the cost of everyday life. We continue to hear that message from our student community and from applicants and that is what has prompted our intervention now.”

Commitment to social inclusion and student welfare

The Cost of Living Allowance aligns with values the University has always held around social inclusion and with its longstanding commitment to supporting and responding to student needs as they develop.

The University’s recent surveys show that many prospective students are concerned about balancing educational expenses alongside the cost-of-living, and that students are increasingly struggling to balance their academic aspirations and commitments with excessive amounts of part-time work to supplement their maintenance loans.

Professor Harkin said: “We feel passionately that more must be done to ease this pressure on students and guarantee that those with the ability and aptitude to succeed in higher education do not see the cost of entry as a barrier. Those who wish to use higher education as a stepping stone to improve their skills and opportunities throughout life must not feel that they cannot afford to access it.

"To that end, we strongly endorse the Secretary of State for Education’s recent comments around the need for universities to do more to expand access to higher education and to play a greater civic role in their communities, ensuring more is done to deliver the economic and social change that is needed.

“Through the scheme, and despite the significant costs to the University of several million pounds that this will entail, we are responding directly as a civic institution to the challenges of the current pressures which will be created for future members of the student body.

“We have always recognised that students who are among the first in their family to go to university face other obstacles to navigate over the course of their studies. In addition to the Cost of Living Allowance, students will be comprehensively supported by our extensive student support and wellbeing services.

“This infrastructure requires significant investment in staffing and other dedicated resources, but it is central to our mission in enabling access and successful participation.”

This is a new initiative from September 2025. In addition to this scheme, the University already offers all home UK undergraduate students a bursary of £300 per year, with the award of an additional £500 available to students who meet eligibility criteria through the Kick-Start scheme and, to many, funded international trips as part of their courses.

How to apply

There is no need to apply for the Cost of Living Allowance and it is not means-tested. It will automatically be applied to all eligible first year home undergraduate students who enrol onto their course in the 2025/26 academic year, starting in September 2025.

To be eligible, students must also be eligible for funding under the terms of Student Finance England and who pay their full fees of £9,535 to the University using a student loan.

The allowance will be paid in eight monthly instalments of £250 between October and May in the first two years of the course. A further £1,000 will be paid in two instalments of £500 each in the final year. Clearly, strong attendance, engagement, progression and successful completion of studies are at the heart of the grant and underpinning eligibility criteria. Most importantly, the money does not need to be paid back.

When the Cost of Living Allowance launches for year 1 students in September 2025, year 2 and 3 students will have access to a new student hardship fund of up to £1 million. This will be made available for those who are facing genuine, significant cost pressures which could otherwise impact on their ability to complete their studies successfully.