The size of student loans must increase to compensate for the increasingly high rents charged by landlords, Hybr chief executive Hannah Chappatte has urged.
Rents on new tenancies rose by 10.2% year-on-year across Great Britain in November, research by Hamptons shows. What’s more things could worsen over the years ahead, as Bloomberg has predicted that UK rents will rise by over 25% in the next four years.
While employed people have the potential to earn more to compensate for these rate rises, students are stuck with the same levels of student loans – meaning more are feeling the pinch.
Chappatte said: “Students are feeling squeezed, which is putting people off from continuing with higher education.
“Student loans should increase at the same rate as the Consumer Price Index, like pensions; or the regional rent increase per city.”
As it stands students have to pay rent from July onwards, even though they don’t receive their student loan until October, meaning they have to pay out of their own pocket.
Chappatte added: “When you start paying it off, they should also make it fairer, by cancelling out payments quicker if you have struggled to find a secure income.
“They should also help students understand the risk they take when they take out a large student loan, how interest rates can impact their debt, and think through this decision, as it has long-term implications.”
According to Chappatte it’s the poorer families that are feeling the pinch the most, as they’re more reliant on student loans to live.
She said students attending York, Bristol, Glasgow and Manchester universities are especially affected by the UK’s soaring rent increases.
