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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

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.

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.

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.

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.

Research Methods and Stages

The study comprised desk-based and empirical research, and employed a mixed methodology in which quantitative data was complemented by qualitative data.

The research had three stages:

• Desk-based research, reviewing previous research and policy literature related to student finances and the funding of HE and FE.
• 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.

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.

Research Findings

HE students' income, expenditure, debt and savings

The total mean income for full-time HE students is £5166, of which the main sources are:

• Student loan £1430
• Term-time earnings £1945
• Education related grants & bursaries £759
• Other £570

The total mean income for part-time HE students is £12,057, of which the main sources are:

• Term-time earnings £9904
• Education related grants & bursaries £130
• Other £1712

Income varies by student characteristics and level of study. The main findings reveal that:

• Student income varies little by sex.
• 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.
• Students from working class backgrounds have slightly higher income than their middle class peers.
• 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 loans ¹).
• 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).

The total mean expenditure for full-time HE students is £6339, of which the main types are:

• Housing costs £1116
• Living costs £3954
• Participation costs £957

The total mean expenditure for part-time HE students is £10,453, of which the main types are:

• Housing costs £2023
• Living costs £5860
• Participation costs £850
• Child-specific costs ² £1261

Expenditure varies by student characteristics and level of study. The main findings reveal that:

• 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.
• 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.
• 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.
• Amongst full-timers and part-timers, highest expenditure is borne by mature students and students with dependent children.

The total mean debt for full-time HE students is £4987, of which the main sources are:

• Study-related credit £3467
• Commercial credit £1284

The total mean debt for part-time HE students is £4278, of which the main sources are:

• Study-related credit £277
• Commercial credit £3940

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 part-timers.

Total debt and savings vary by student characteristics and level of study. The main findings reveal that:

• 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.
• Among full-time and part-time students, mature students and students with dependent children have the highest debt.
• Full-time students from working class families have higher debt than their middle class peers.
• 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.
• 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.
• 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.
• 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.

FE students' income, expenditure, debt and savings

The total mean income of full-time FE students is £4299, of which the main sources are:

• Student support £1776
• Term-time earnings £1566
• Benefits £414

Total income varied by student characteristics. The main findings are:

• Male students have higher income than female students.
• 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.
• Students with dependent children have higher incomes.
• Students who do not live with their parents have higher incomes than those students who do live with their parents.

The total mean expenditure for full-time FE students is £5581; of which the main types of expenditure are:

• Housing costs £771
• Living costs £3741
• Participation costs £750

Full-time FE expenditure varies by student characteristics. The main findings reveal that:

• Those students with the highest mean expenditure are those with dependent children.
• Female students have much higher expenditure than male students.
• In terms of age, students aged 21-24 years have higher expenditure, although mature students' expenditure is also high compared to the youngest students.
• Students from middle class backgrounds have higher expenditure than students from working class backgrounds.
• 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

Debt varies by student characteristics. The main findings reveal that:

• Highest debt occurs amongst mature students and students with dependent children.
• Female students have considerably higher debt than male students.
• Debt increases with age.
• Debt is only slightly higher for students from middle class backgrounds compared to those from working class backgrounds.
• Students who do not live with parents have higher debt than students who do live with parents.
• 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.
• 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.

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.

Responses from the main survey indicate that:

• 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.
• 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.
• Over 80% of students reporting financial difficulties said this had caused them worry and stress during their studies.
• 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.
• Students indicated strong support (around 70%) for targeted support from government towards students from less well-off families.

Amongst the student interviewees from the working class backgrounds:

• There was concern about the accumulation of debt as a consequence of studying, but also some resignation about its inevitability.
• 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.
• 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.
• Paid employment was perceived to have a detrimental effect on the process and outcomes of study.
• 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.

Comparisons with the previous Scottish survey of students

Where comparisons are possible between the current and previous Scottish studies, the data reveals that for HE students:

• Income has decreased (£5166 versus £5795).
• Expenditure has decreased (£6339 versus £6604).
• Debt has roughly stayed the same (£4987 versus £5099).

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.

Where comparisons are possible between the current and previous Scottish studies for FE students, the data shows that:

• Income has stayed roughly the same (£4299 versus £4377).
• Expenditure has increased slightly (£5581 versus £5320.
• Debt has increased considerably (£1266 versus £261).

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 term-time 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.

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:

• 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.

Amongst FE students:

• For students with dependent children, income is down, expenditure has risen and debt risen.
• For mature students, income is down, expenditure has risen and debt has risen.

Conclusion

The summary pattern of findings for HE students shows that:

• Male and female students have roughly the same income, expenditure and debt but males have higher savings.
• 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.

For full-time FE students:

• Male students have higher income and savings; female students higher expenditure and debts.
• Mature students have high but not the highest income and expenditure; and the highest debt and savings.
• Students with dependent children have higher income, expenditure and debt and lower savings than students with no dependent children.
• 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.

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.

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.

If you wish further copies of this Research Findings or have any enquiries about social research, please contact us at:

Dissemination Officer

Email: recs.admin@scotland.gsi.gov.uk
Website: www.scotland.gov.uk/socialresearch

Online copies

The research findings is web only and can be downloaded from the publications section of The Scottish Government website: http://www.scotland.gov.uk

This document, along with full research report of the project, and further information about social and policy research commissioned and published on behalf of the Scottish Government, can be viewed on the Internet at: http://www.scotland.gov.uk/socialresearch. If you have any further queries about social research, or would like further copies of this research findings summary document or the full research report, please contact us at socialresearch@scotland.gsi.gov.uk or on 0131-244 7560.

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