We can learn more about student hardship when we see how funds are spent

Universities give hundreds of millions of pounds in financial support to tens of thousands of students each year. Peter Gray looks at how students spend the funds

Peter Gray is chief executive and chair of JS Group

Many students are in hardship before their studies have even begun due to, among other things, accommodation deposits and initial course costs.

To better understand the specific requirements and concerns of their students, especially those in receipt of the greatest levels of financial support, universities need to know how students spend the financial support they receive and how quickly and often they draw down these funds.

These were the questions my organisation, JS Group, set out to answer in the first ever analysis of what students spend bursary, scholarship, hardship funds and other such specialist financial investments on. We looked at the spending patterns of more than 53,000 UK students across a wide range of providerss who received more than £19m over the 2022-2023 academic year.

The findings are revealing, and sometimes surprising, but above all can be used to help providers direct these funds into what students really need and when they need it.

At JS Group, we partner with 34 universities to efficiently manage the distribution of bursaries, scholarships, hardship funds and other financial support so that it almost instantly reaches the students who have been allocated it, freeing up resources for the institutions to focus on student experience and participation rates.

Last year, we partnered with Payit, NatWest’s Open Banking service to develop our technology platform, Aspire Cash, and this is transforming the speed at which students receive their funds – it’s now minutes rather than days. This is a factor that is so important to a student’s ability to enjoy a fulfilling university experience. As the number of universities we partner with grows, we will be able to offer deeper insights into the needs of students who receive financial support of any kind.

On average students draw down hardship funds in two instalments across the year

Aspire Cash allocates funds to a student, as opposed to making a singular payment, and our analysis shows that some students are choosing to budget carefully so that their bursary, scholarship and hardship funds last throughout the year.

In 2022-23, there were 118,429 individual cash withdrawals – indicating that, across the year, on average students tend to draw down their cash entitlement in two instalments.

They tend to not transfer the funds into their bank account as a lump sum, perhaps to protect the funds from shared bank accounts. This is particularly important, for example, when students have others with control over certain bank accounts or their current account is in overdraft.

On average, each student who receives additional funding is awarded £360 per year, but 9 per cent of funds aren’t drawn down by the end of the year. Some students of course drop out and their allocation is frozen and can be reallocated to continuing students.

In total, we delivered 134 individual funds to students who need additional support and, on average, each university tended to offer 12 of these funds.

The majority are of funds spent on cost of living needs

Students select the intended use of funds from a menu each time they draw cash. Unsurprisingly, the majority of students spend the funds on ‘cost of living needs’. Some 63 per cent of the funds – about £11m of the total of £19.1m – cover these expenses.

For example, household bills take up 25 per cent – or £4m – of the total, while food and other groceries cover 22 per cent – or £3.7m. Rent takes up 16 per cent or £2.8m.

However, students are also using the funds to cover learning or course-related resources. Some 11 per cent of the funds – or £1.9m – are for course materials, while 9 per cent – £1.5m – go on transport to and from university. A further 5 per cent – £951,000 – go on personal wellbeing or health support.

Sizeable amounts of cash – about 4.5 per cent or £788,000 – are used on course placements, such as nursing students attending hospitals and about 2.5 per cent , or £788,000, are spent on childcare costs.

Some students spend the funds on care home fees for relatives, starting up their own business alongside their studies and paying off overdrafts or other debts.

The highest number of transactions are drawn for food and groceries: over 18,800 students made 35,000+ withdrawals at an average of just over £100 each time.

Slightly fewer students withdraw funds to pay household bills, but the average amount was higher, topping £160. The average amount taken out for rent is over £230 and just under 8,000 students use this an average of 1.5 times in the year.

Regional differences in spending

Although our analysis reveals stark differences in spending between students across the country, the sample size of universities is currently too small to draw specific conclusions.

However, we believe that as the number of institutions grow, we will be able to show variances not only regionally, but also around funding type (hardship, cost of living etc) that we hope prove valuable to the sector.

Above all, our analysis shows the scale of the financial struggle that so many students are under and demonstrates, among many other things, that students need to access these funds easily and quickly.

Our hope is that this will help universities better understand the specific needs and concerns of their students and that, over time, we will provide very rich data to help improve both the deployment of financial support and the outcomes derived from it.

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