This week Rachel Reeves announced the Autumn Budget, only shortly after it was leaked by the OBR. While the Chancellor outlined measures aimed at supporting both students and universities, questions remain about whether these changes will ultimately help or hinder participation in Higher Education. 

Cost of Living as a Student 

Several headline announcements will directly affect students' daily finances. The minimum wage is set to rise, with under-18s and apprentices seeing a 45p uplift to £8 an hour, while over-21s will get a rise of 50p per hour to £12.71. Given that most university students work paid jobs, and most of those are minimum wage positions, this could provide some relief. However, the increase may not be significant enough to reduce the hours students must work alongside demanding degrees—and with job opportunities becoming increasingly scarce, some worry that further economic changes could make employment even harder to secure. 

Our health education inquiry has highlighted the real-world impact of these pressures. Students have told us about the challenges of balancing financial difficulties, part-time work, and clinical placements. For some, this has put them at risk of not completing required competencies or placement hours, forcing them to take on additional terms of study and delaying graduation. 

Another concern is the 2% tax increase on income from rental properties. With many students living in private accommodation during later years of their degrees, there's a risk this policy will contribute to already rising rent prices. The cost-of-living crisis has already pushed increasing numbers of students to live at home during university, raising concerns about a two-tier student experience where 'commuter students' have less time for studying and engaging in university life. 

Changes to Student Loans 

The budget confirmed further changes to student loans. Universities will be able to charge more in fees, with the tuition fee loan caps rising to £9,790 in 2026-27 and up to £10,050 in 2027-28. While the Chancellor has presented this as evidence of government support for financially struggling universities, critics argue it could further dissuade students from taking out loans and entering Higher Education altogether. Meanwhile, universities have questioned whether the increases are sufficient given their precarious financial situation. 

Equally significant is the freeze to student loan repayment thresholds from 2027-28. The threshold currently stands at £28,470 for those with loans taken out from September 2012 onwards in England or Wales. This freeze means workers earning above that amount will face larger repayments than they would if thresholds rose with inflation—another potential deterrent for prospective students. 

On a more positive note, the budget confirmed new maintenance grants for students from low-income families. Students from households earning at or below £25,000 will receive the maximum support (£1,000 in years one and two, £750 from year three onwards), tapering to £500/£375 for household incomes up to £30,000. However, the means-tested system has drawn criticism, particularly as minimum wage increases mean fewer students will qualify for maximum support. There are also concerns about how the system accounts for families with multiple children at university—under the Lifelong Learning Entitlement, Student Finance will assess each child as if they're the only one at university, resulting in lower maintenance loans and greater financial pressure on families. 

International Student Levy 

The budget also provided clarity on the controversial international student levy. From August 2028, universities will be charged £925 per overseas student per year, with an exemption for the first 220 students. Universities have repeatedly called for the policy to be scrapped, arguing that it undermines the very students who pay significantly higher fees than their UK counterparts. Combined with broader migration policy changes, there are fears this could deter international students from choosing UK universities. 

The levy's structure also raises equity concerns. Because the first 220 students are exempt, it will fall disproportionately on universities that recruit large numbers of international students but charge lower fees—institutions that often attract more students from disadvantaged backgrounds, both UK and international. There's a real risk that universities will respond by raising fees or cutting places, ultimately reducing access for the students who need it most. 

Research and Development: A Bright Spot 

Not all the news was discouraging. The budget reiterated the Government's commitment to invest over £22 billion per year in R&D by 2029-30. UKRI's investment in core quality-related block grants and Higher Education Innovation Funding in England will be protected in real terms over the Spending Review period—a cumulative cash increase of over £425 million. UKRI will receive £38.6bn overall, including £9bn for government priority sectors such as AI, quantum computing, and engineering biology. 

However, even this positive development comes with caveats. Many institutions have warned that the increases may not be enough to match real-terms value, and research funding continues to fall short of covering the overheads that are driving redundancies and course closures across the sector. 

Conclusion 

The Autumn Budget presents a mixed picture for Higher Education. While measures like minimum wage increases and maintenance grants offer some support, concerns about student debt, rising living costs, and the international student levy suggest the sector faces continued challenges. Whether these changes will encourage or discourage participation in Higher Education remains to be seen—but for many students and institutions, the financial pressures are mounting.