COVID-19 financial crisis fuels university drop-out worries for students

Nearly half of students (48%) have considered dropping out of university, or deferring a year, due to the financial fall-out of COVID-19, a new report from Blackbullion has found. Money and mental health: how financial wellbeing impacts students shows that 75% of students surveyed worry about finances, with 67% of those saying financial anxiety negatively impacts their mental health.

Blackbullion commissioned the report ahead of National Student Money Week.

Bank of Mum and Dad keeps students in studies

44% of those who have previously considered dropping out or deferring a year due to money constraints received financial support from their parent(s)/guardian(s), meaning they could stay on at university or avoid deferring their studies. 20% of respondents received additional funding from their university.

62% of respondents said they would turn to their parent(s)/guardian(s) for advice and support if they had financial difficulties. The reliance on the ‘Bank of Mum and Dad’ suggests university inclusion strategies will be worryingly impacted over the longer-term, as students from lower income homes emerge as the hardest hit; 29% of university students surveyed whose financial situation has been affected by COVID-19 have not felt able to ask their parent(s)/guardian(s) for financial support.

Surveyed students identified a monthly gap of £329 to confidently complete their degree and cover all expenses. Shockingly, 22% of the students surveyed have £100 or less per month to live on and 9% of students are surviving on less than £50.

Over a fifth (23%) of the university students surveyed have had to move home with parent(s)/guardian(s) or stay with friends as a result of the impact of COVID-19 on their financial situation. And, when asked what students had to do due to a lack of money, 35% of respondents have had to skip a meal, 25% of students have been unable to purchase books for their course and 21% of students have had to turn off their heating due to finances.

Gender gap already in play in finances

Blackbullion’s report also identifies a gap in female students’ relationship to money compared to their male counterparts. The trend starts when deciding whether to go to university; 86% of female students factored the cost of living into their decision, compared to 78% of males.

What’s more, the female students surveyed have a monthly budget of £562, compared to £622 for male students. Moreover, 66% of female students feel they wouldn’t be able to complete their degree without the additional financial help they currently receive outside of the loans and grants system, compared to 51% of male students.

Nearly 70% of students say finances negatively impact mental health

Money concerns engulf all elements of student wellbeing for the current cohort of undergraduates. 67% of students surveyed, who worry about their financial situation, feel their mental health has been negatively affected by this worry. Other affected areas include optimism about the future (54%), motivation or productivity (47%) and the ability to focus and study (46%). Sleep (45%) and confidence (42%) were also areas suffering as a result of students worrying about their finances.

Again, Blackbullion found female students feel more exposed to the mental health impact of financial wellbeing; 78% of female students worry about finances, compared to 66% of male students. Of the students whose mental health was negatively impacted due to worrying about finances, 57% of female students regularly experience anxiety (compared to 30% of males) and 66% of female students found financial worries regularly trigger stress (compared to 43% of male students).

“It’s well reported that the pandemic has hugely impacted women in terms of employment and finances,” says Vivi Friedgut, CEO and founder of Blackbullion. “We’re now seeing that it reaches educational opportunities too.”

She adds, “Our research shows COVID-19’s impact goes far beyond the evident financial pressures, impacting the entire student experience, with students’ mental health at risk. We’re working closely with universities to take a holistic view of how we can better support students’ financial wellbeing. What’s clear is that despite the challenges, young people have the tenacity and resilience to create a better future for themselves and their communities.”

National Student Money Week, the UK’s largest financial awareness initiative for students, is run by NASMA (National Association of Money Advisers) and supported by Blackbullion, in partnership with Barclays.

Kelly McAlonan, NASMA Chair, comments,

“NASMA is proud to deliver our annual National Student Money Week campaign, supported by Blackbullion. National Student Money Week is even more important this year at a time when students across the country are feeling added financial strain and are struggling to balance budgets in an increasingly unsettled environment.”

“Coupled with the challenges of living and learning in a global pandemic, even those with the best laid plans can be easily thrown off balance. It’s more important than ever to focus on the financial wellbeing and resilience of our students, and help them develop the skills needed to future proof their finances.”

A full copy of Blackbullion’s report is available here.

Methodology

The research was conducted by Censuswide on behalf of Blackbullion, and completed by 1,000 university students across the UK between 12th-19th January 2021. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles

When referring to males and females, these are people who have chosen to identify as either male or female at the beginning of the survey.