The end of the academic year is in sight for many students; essays need to be finished, lectures need to be attended and summer holidays need to be booked. Which is why their second loan drop of year is such significant moment when it lands in their back accounts, for UK students and brands alike. Today we look at what it is and, most importantly, why your brand needs to pay attention.
What is the April loan drop?
UK students are eligible to receive two different loans during their time in higher education: one for their tuition fees, and one for the living expenses (called a maintenance loan). The former goes directly to their uni, but the latter, their maintenance loan, goes directly into their bank accounts. Some students can receive as much as £4,222 in one drop.
Who receives the April loan drop?
These ‘drops’ happen three times a year – January, April and September. All students are eligible for these loans, but the amount they receive is impacted by where they live, what they study, what their family situation is, how old they are, etc. However, all receivers of the maintenance payment from the April loan drop can spend it how they wish, whether that’s on rent, socialising or shopping.
Why is the April loan drop a big deal for students?
Let’s be honest, this is a large amount of money to be landing in students’ bank accounts (we for one, wouldn’t say no!). For many, these drops are the largest amount of money they’ve ever received in one go. The rare nature of these drops coupled with the excitement of receiving such a large amount of money (as well as the anticipation leading up to it) means that these events are steep learning curves for many young people.
The April loan drop has to last students from April to September – this may sound like a long time, but many students finish for their summer break in May/June. Many use these loans for bills, rent, food and educational supplies, with any disposable cash being used to socialise, travel and shop (summer necessities!).
What does the drop mean for brands?
Loan drops are challenging times for students because whilst the money burns a hole in their pocket, they need to budget their cash to last. This means it’s a great time for brands to step up, make a good impression and save students some precious pennies with awesome student discounts. And these positive brand experiences last way beyond a young person’s time at university, with a huge 78% of students saying they’d stay loyal to a brand if they offered student discounts.
Price cuts such as this are more important than ever before thanks to the rising cost of living. It’s student discounts that are making all the difference for young people who are trying to navigate financial uncertainty and their own bank balances for the first time. And the value of student discounts is backed up by the stats – over the past few months, Student Beans’ brand partners have seen a 22% increase in revenue from our student base. If that’s not an incentive to get involved with helping students save money, we don’t know what is!
So, ahead of April’s loan drop, make sure you’re aware of how students are spending their money and what they’re spending it on (our insights agency, Voxburner, have created this handy infographic to help you out). This will be invaluable when it comes to building relationships with young people who are navigating tricky financial waters.
Want to know more about the April loan drop? Why not get in touch with our team for further guidance.