Vice-chancellors have called for maintenance grants to be brought back for undergraduates in England, warning that otherwise there will be a “significant” impact on student health and wellbeing as well as their education.

Steve West, vice-chancellor of the University of the West of England, told the Universities UK annual conference in Leicester that the new government “needs to face up to the cost of living crisis now faced by students and staff. It is hitting them hard”.

West, the UUK president, said the maximum maintenance loan available to students in England this year would be £1,000 less than a job paying the national minimum wage – the biggest gap between the two since 2004 – putting higher education further out of reach for those from deprived backgrounds.

The maximum support loan for studying outside London and living away from home is now £9,706 for students from households earning up to £25,000 a year.

While universities “have once again stepped up to support students,” West said that emergency aid was not a replacement for long-term backing.

“We also need government to take action. In our conversations with new cabinet members and ministers in the coming weeks, we will urge them to provide additional government money for hardship funding and reinstate maintenance grants for those most in need,” West said.

“Failure to engage with this will lead to significant health and wellbeing challenges as well as educational impacts.”

West said university leaders also needed to make a case for sustainable financing in order to teach their students, as inflation eroded their income from tuition fees.

“Universities are already doing more with less. We have all invested significantly in rising pay and pensions costs, digital innovations to enhance learning and modernised facilities to meet student demand. We have all also invested significantly in support for student mental health and wellbeing to keep pace with demand,” West said.

“I, of course, recognise that this government has many spending priorities that are urgent and pressing. But it is vital that we start to move forward on this issue.”

Vivienne Stern, UUK’s incoming chief executive, told the assembled vice-chancellors that they currently faced “serried ranks” of policy challenges.

“I could list them, but I’d just depress you,” Stern said.

Warning that the Treasury is “not particularly worried” about universities, Stern said the new government’s spending review was a potential risk for research budgets, especially funding a replacement for the UK’s membership of the EU’s £80bn Horizon Europe research programme.

The conference heard results of new research into attitudes towards UK universities. The survey of more than 2,000 adults found that concerns about universities “were not front of mind”, with the public more worried by lack of funding for schools.

Holly Wicks of BritainThinks, which carried out polling and focus groups for the study, said “debt” was the word most associated with higher education by the public. Earlier research in 2018 found that “expensive” was the word most commonly identified.

The survey found that 61% of parents would encourage their children to go to university, down from 66% in 2018.