Research Findings No.49/2009
Education and Lifelong Learning
Higher and Further Education Students’ Income, Expenditure and Debt in Scotland 2007-08 Chris Warhurst, Andy Furlong, Johanna Commander, Jeanette Findlay, Scott Hurrell, Dennis Nickson, Anna Symeonides and Fiona Wilson Scottish Centre for Employment Research University of Strathclyde
The Scottish Centre for Employment Research (SCER) at the University of Strathclyde was commissioned by the Scottish Government to conduct the second study of higher education (HE) and further education (FE) students’ finances in Scotland in 2007-08. The study was conducted with colleagues from Glasgow University Business School. The aim of the study is to examine Scottish-domiciled HE and FE students’ income, expenditure, debt and savings, and their attitudes to the financing of study in Scotland. Where appropriate this data is compared here to the findings of the previous 2004-05 Scottish survey. Data for the current study was generated through quantitative and qualitative research, with surveys and interviews.
Main Findings ■ Using annualised figures and calculating means, full-time HE students have a total income of £5166 and expenditure of £6339; debt is £4987 and savings £1596. For part-time HE students the figures are £12,057, £10,453, £4278 and £4294 respectively; for full-time FE students, £4299, £5581, £1266 and £482. ■ For full-time HE students, most of this income is generated through term-time paid employment (£1945) and student loans (£1430). The bulk of part-time HE students’ income is derived from paid employment (£9904). Most full-time FE students’ income comes from student support (£1776) and paid employment (£1566). ■ For full-time HE students, most expenditure relates to living costs (£3954); likewise for part-time HE students (£5860) and for full-time FE students (£3741). ■ For full-time HE students, most debt is study-related e.g. from student loans (£3467). By contrast, most debt for part-time HE students comes from commercial sources e.g. bank loans (£3940); likewise for full-time FE students (£1097). ■ Full-time HE students from working class backgrounds have higher levels of debt than those from middle class backgrounds (£5607 versus £4363). Mature students and those students with dependent children have the highest debt (£13,081 and £13,110 respectively). ■ Compared to the previous study of 2004-05, full-time HE students’ income and expenditure have decreased; debt has roughly stayed the same. The decreased income is mainly due to reduced income from informal contributions. Full-time FE students’ income has roughly stayed the same, expenditure increased slightly and debt increased considerably (though caution is needed on this debt comparison).
Background
Research Findings
Participation in HE in Scotland has risen to and levelled at around 50% of young people in recent years, making Scotland the lead country in the UK in terms of participation rates.
HE students’ income, expenditure, debt and savings The total mean income for full-time HE students is £5166, of which the main sources are:
There are now 20 universities in Scotland. In 2006-07 there were 308,085 students in higher education in Scotland, full and part-time. There are also 43 further education colleges in Scotland. In 2006-07 there were 468,155 FE college student enrolments. These colleges also provide some higher education.
■ Student loan £1430 ■ Term-time earnings £1945 ■ Education related grants & bursaries £759 ■ Other £570
The expansion of HE is a cornerstone of Scotland’s economic and social policies as well as its lifelong learning strategy, and is intended to deliver a high skills economy and tackle social exclusion and poverty. FE colleges too are accorded a role in the creation of a Smarter Scotland.
The total mean income for part-time HE students is £12,057, of which the main sources are: ■ Term-time earnings £9904
Debt and the fear of debt can act as deterrents to study and may hinder the widening of access and participation in study, particularly for Scots from less advantaged backgrounds. The aim of this study is to examine student finances across HE and FE.
■ Education related grants & bursaries £130 ■ Other £1712 Income varies by student characteristics and level of study. The main findings reveal that:
Research Methods and Stages
■ Student income varies little by sex.
The study comprised desk-based and empirical research, and employed a mixed methodology in which quantitative data was complemented by qualitative data.
■ Income varies by age and whether the students have dependent children; the latter and mature students have higher incomes amongst both full-time and part-time students.
The research had three stages:
■ Students from working class backgrounds have slightly higher income than their middle class peers.
■ Desk-based research, reviewing previous research and policy literature related to student finances and the funding of HE and FE.
■ Three-quarters of full-time HE students had taken out student loans but only 9% of part-time students had. (It should be noted that not all part-time students are eligible for student loans1).
■ Quantitative data gathering, featuring an online screening survey, an online main survey and postal control group survey. Of those students who participated in the screening survey, over 5000 responded to the main survey on student finance. This response included both full-time and part-time HE students (including students from the Open University), and full-time FE students.
■ The majority (around 60%) of full-time HE students declared earnings from term-time employment; likewise over 70% of part-time students. Full-time students typically work in low wage industries and with paid employment hours longer than recommended by the Cubie Report of 1999 (13 versus 10 hours).
■ Qualitative data gathering through semi-structured interviews. Given the concern about potential financial barriers to HE participation, the interviewees were full-time HE students from working class backgrounds voluntarily drawn from the main survey.
The total mean expenditure for full-time HE students is £6339, of which the main types are: ■ Housing costs £1116
1 Loans for part-time HE students have been replaced with a part-time grant from academic session 2008-09.
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■ Living costs £3954
Total debt and savings vary by student characteristics and level of study. The main findings reveal that:
■ Participation costs £957
■ Although commercial debt is significant, debts to the Student Loan Company represent the majority of borrowing for full-time students. Part-time students rely much more on commercial loans.
The total mean expenditure for part-time HE students is £10,453, of which the main types are: ■ Housing costs £2023
■ Among full-time and part-time students, mature students and students with dependent children have the highest debt.
■ Living costs £5860 ■ Participation costs £850 ■ Child-specific costs2 £1261
■ Full-time students from working class families have higher debt than their middle class peers.
Expenditure varies by student characteristics and level of study. The main findings reveal that:
■ For full-timers, commercial debt is higher for students who are older, working class, have dependent children and do not live with their parents. A similar pattern exists amongst part-time students.
■ There is a wide variation in expenditure within and between the main student groups. ■ The biggest costs facing most students are living costs followed by housing costs.
■ Debt-free full-time students tend to be younger, middle class, living with parents, and without dependent children. Debt-free part-time students are more likely to be female, over 25 years old, from working class families, without dependents and not living with their parents.
■ Child-related costs are significant for those students who have dependent children. ■ Child-related costs are mostly incurred by part-time HE students and mostly by female students.
■ Amongst full-timers, students from middle class backgrounds have higher savings than those from working class backgrounds; amongst part-timers the levels of savings are roughly the same by social class.
■ Expenditures for most students rise slightly throughout their period of study and then dip in their final year. ■ Working class students are spending more in almost every expenditure category.
■ For full-timers, savings tend to be higher amongst male students and students without dependent children. A similar pattern exists for part-timers, with the addition of higher savings for students not living with their parents.
■ Amongst full-timers and part-timers, highest expenditure is borne by mature students and students with dependent children.
FE students’ income, expenditure, debt and savings
The total mean debt for full-time HE students is £4987, of which the main sources are: ■ Study-related credit £3467
The total mean income of full-time FE students is £4299, of which the main sources are:
■ Commercial credit £1284
■ Student support £1776
The total mean debt for part-time HE students is £4278, of which the main sources are:
■ Term-time earnings £1566 ■ Benefits £414
■ Study-related credit £277
Total income varied by student characteristics. The main findings are:
■ Commercial credit £3940
■ Male students have higher income than female students.
The total mean savings of full-time HE students is £1596; part-time HE students £4294. However, not all students report having savings; of those who do, the figures are £3326 and £9303 respectively for full-timers and parttimers.
■ Younger students aged 16-20 have lowest income; students aged 21-24 the highest. ■ Students from middle class backgrounds have higher incomes than those from working class backgrounds.
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Child specific costs include: packed lunches, school travel, toys/books, presents, clothes, shoes, entertainment; pocket money; school uniform, school outings, tuition fees, baby equipment and childcare.
■ Students with dependent children have higher incomes.
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■ Students who do not live with their parents have higher incomes than those students who do live with their parents.
■ Again, not all FE students reported having savings. Of those students who do, the level of mean total savings is higher, £1964; and mature students have the highest £6218.
The total mean expenditure for full-time FE students is £5581; of which the main types of expenditure are:
Students’ Attitudes and Behaviour Students’ attitudes and behaviour were analysed through a series of questions in the main survey plus data from the interviews with students from working class backgrounds. Whilst the first set of data below reports the attitudes and behaviours of all students, the second set reports only the attitudes and behaviour of students from working class backgrounds.
■ Housing costs £771 ■ Living costs £3741 ■ Participation costs £750 Full-time FE expenditure varies by student characteristics. The main findings reveal that:
Responses from the main survey indicate that:
■ Those students with the highest mean expenditure are those with dependent children.
■ Prior to starting their studies students appear to have mixed experiences as to the extent and usefulness of the provision of information about the costs of studying.
■ Female students have much higher expenditure than male students.
■ Although only an issue for a minority of students, the main reason indicated for considering leaving their course early centred on concerns about their finances.
■ In terms of age, students aged 21-24 years have higher expenditure, although mature students’ expenditure is also high compared to the youngest students.
■ Over 80% of students reporting financial difficulties said this had caused them worry and stress during their studies.
■ Students from middle class backgrounds have higher expenditure than students from working class backgrounds.
■ When questioned about current funding policy there was a degree of discontent with the current arrangements, with a significant minority of students (around 40%) disagreeing with the view that current funding policies are fair.
■ Those students who do not live with their parents have much higher expenditure than students who do live with their parents. The total mean debt of full-time FE students is £1266; of which the main source is: ■ Commercial credit £1097
■ Students indicated strong support (around 70%) for targeted support from government towards students from less well-off families.
Debt varies by student characteristics. The main findings reveal that:
Amongst the student interviewees from the working class backgrounds:
■ Highest debt occurs amongst mature students and students with dependent children.
■ There was concern about the accumulation of debt as a consequence of studying, but also some resignation about its inevitability.
■ Female students have considerably higher debt than male students.
■ Having a student loan was perceived as normal, inevitable and also different from other types of debt, particularly debt derived from commercial sources such as banks.
■ Debt increases with age. ■ Debt is only slightly higher for students from middle class backgrounds compared to those from working class backgrounds.
■ To help ease their financial difficulties, most students had paid employment. This employment often involves long working hours – more than recommended within the Cubie Report.
■ Students who do not live with parents have higher debt than students who do live with parents.
■ Paid employment was perceived to have a detrimental effect on the process and outcomes of study.
■ Mean total savings for full-time FE students is £482. The highest savings are held by those students who are male, oldest, from working class backgrounds and have no dependent children.
■ Most students hoped, and indeed expected, that the financial hardships being experienced now would be ameliorated by future benefits, particular through the acquiring of better jobs.
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Amongst FE students:
Comparisons with the previous Scottish survey of students
■ For students with dependent children, income is down, expenditure has risen and debt risen.
Where comparisons are possible between the current and previous Scottish studies, the data reveals that for HE students:
■ For mature students, income is down, expenditure has risen and debt has risen.
■ Income has decreased (£5166 versus £5795).
Conclusion
■ Expenditure has decreased (£6339 versus £6604).
The summary pattern of findings for HE students shows that:
■ Debt has roughly stayed the same (£4987 versus £5099).
■ Male and female students have roughly the same income, expenditure and debt but males have higher savings.
The decrease in income reflects a slightly lower take-up of student loans but mainly a large drop in informal income. It also masks a rise in income from term-time employment. In terms of expenditure, housing costs have stayed roughly the same but lower living costs are now reported. The debt comparison is difficult but seems to show a drop in debt resulting from study-related credit e.g. student loans, and a rise in debt from commercial sources e.g. from banks.
■ Mature students have the highest income, expenditure and debt, and lowest savings. ■ Students with dependent children have higher income, expenditure and debt, and lower savings than students with no dependent children. ■ Working class students have higher income, expenditure and debt, and lower savings than middle class students.
Where comparisons are possible between the current and previous Scottish studies for FE students, the data shows that:
For full-time FE students: ■ Male students have higher income and savings; female students higher expenditure and debts.
■ Income has stayed roughly the same (£4299 versus £4377).
■ Mature students have high but not the highest income and expenditure; and the highest debt and savings.
■ Expenditure has increased slightly (£5581 versus £5320. ■ Debt has increased considerably (£1266 versus £261).
■ Students with dependent children have higher income, expenditure and debt and lower savings than students with no dependent children.
The income figures mask some changes: informal income and income from state benefits have dropped but income from education-related grants and bursaries and from termtime employment have risen. In terms of expenditure, most costs have remained roughly the same, though child-specific costs and participation costs have risen slightly. The rise in debt is related to a large increase in debt from commercial sources e.g. banks.
■ Working class students have lower income, expenditure and debt, but higher savings, than middle class students. These summary findings reveal that in Scotland the financial situation of male and female students is mixed for FE students but fairly similar for HE students. In terms of social class, there is a disparity between the financial situation of working class students in HE and FE, almost a polarisation of experience.
Although there are increases and decreases for different types of income, expenditure and debt and variations by type of student – both full-time HE and FE – considerable change has occurred for mature students and those students with dependent children. Accepting the need for caution with this comparative data, it appears that amongst HE students:
Of emergent salience is the financial situation of mature students and those students with dependent children. Whilst both have high income across HE and FE, their expenditure falls short of this income, resulting in the highest debt; in HE they also have the lower savings. The comparative findings also apparently signal considerable change in the financial situation of these students over recent years. Generally, therefore, more investigation of the financial situation of these students from the current study’s data is required.
■ For students with dependent children, income is down, expenditure has risen considerably and debt has risen considerably. ■ For mature students, income is roughly the same, expenditure has risen and debt risen considerably.
Pending this further investigation and in respect to the methodology for any future study of student finances in Scotland, consideration might also be given to qualitative research to analyse in more depth the experience of mature students and those students with dependent children.
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