Freshers’ Week, Christmas, Black Friday and graduations are all events in the student calendar that hold significant weight, but what about the three near-equal payments that arrive into their bank accounts every year?! The January Loan Drop is a significant time for students and brands alike, and today we look at what it is and why your brand should be paying attention.
What is the January 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 their living expenses. The former goes directly to their university, 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 January 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 and how old they are, amongst other things. However, one thing all receivers of the January drop have in common: it’s up to them how they spend it, whether that’s on rent, socialising or bills.
Why is the January Loan Drop a big deal for students?
Let’s be honest, the January Loan Drop is a huge amount of money to be landing in students’ bank accounts. For many, this will be the largest sum 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 January Loan Drop has to last students from January to April, and many use it for bills, rent, food and educational supplies, with any disposable cash being used to socialise, travel and shop.
What does the drop mean for brands?
Loan drops are challenging times for students because of resulting budgeting issues, which means it’s a great time for brands to step up, make a good first impression and save them some precious pennies with awesome student discounts. And these positive brand experiences last way beyond a young person’s time at uni, with a huge 78% of students saying they’d stay loyal to a brand if they offered student discounts.
However, price cuts such as this are more important than ever when it comes to January’s loan drop thanks to the rising cost of living. Voxburner, the Student Beans insights agency, recently reported that 80% of students will be cutting down on non-essential spending in the next six months due to the cost of living, whilst 73% said they feel concerned about the issue and 68% are anxious. January will be a time when students are more aware than ever before about what money is leaving their bank accounts, as well as what’s going in it. And it’s discounts that are making all the difference here – in 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 January’s loan drop, make sure you’re aware of how students are spending their money and what they’re spending it on; this will be invaluable for you when it comes to building relationships with students who are navigating tricky financial waters.
Want to know more about the January loan drop? Why not get in touch with our team for further guidance.