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7. COMPARATIVE ANALYSIS

Introduction

7.1 In relation to the findings of the current study, this chapter reports two types of comparison. Firstly, it compares the full-time higher education combined students ( FTHE Combined) data with the findings from the control group survey. This control survey was designed so as to make an assessment of differences in patterns of income, debt and expenditure between non-students and students, with the data for the latter providing data triangulation. The data was generated by a postal survey sent randomly to young Scots. The purpose of this survey was to benchmark students' finances against the finances of other young Scots. Secondly, the chapter makes a backward comparison with the FTHE and the further education ( FE) data with findings from the previous Scottish study conducted in 2004-05 by Callender et al. ⁷³ In this second comparison headline data only is compared.

The Control Survey Comparisons

7.2 With transitions from education to work having become more protracted and with many young Scots who decide not to progress to higher education encountering precarious labour market situations and making costly transitions to independent living, it is clear that financial hardship is not the preserve of students but may extend to the young working population. In this first comparison section, we explore the differences between the two groups in relation to the HE findings from the main survey reported over Chapters 2-4 in order to determine the extent to which students encounter greater financial hardships than qualified young people who do not progress to higher education. Given the small size of this sample, some caution needs to be exercised in the interpretation of the comparative analysis. As with the main survey and in the same way, data for the students from the control survey have been annualised where appropriate.

Sample Characteristics

7.3 Ninety responses were received from those reporting themselves as not being students, hereafter called non-student control. Over two-thirds of respondents reported living with their parents while 10% lived in their own home. The vast majority of respondents (89%) had Highers or A levels as their highest qualification, while the remainder had alternative qualifications that would permit progression to higher education (as outlined in the sample specification). Responses were also received from 274 respondents who reported being students (hereafter called student control group). All of these students were studying HE. Over half of the respondents reported living with their parents while 36% lived in rented accommodation with others and 4% lived in their own homes. These figures are not dissimilar from those of FTHE students in the main survey, of whom 43% lived with their parents, 36% in rented accommodation and 6% lived in their own homes.

7.4 Members of the two groups were all in the age range 19-21 (in both groups, 93% were aged 20 and 21). Among both the non-student and student control groups, males made up 45% of the sample and females 55%.

Table 7.1: Hours worked by occupation (non-student control group)

7.5 The vast majority (78%) of the non-student control group reported working full-time with, 14% reporting working part-time and 2% working in both full-time and part-time jobs. Of those who reported their occupation and hours, administrative and sales and customer service occupations were the most popular occupations, with most full-time employees working between 38-41 hours per week (Table 7.1). This profile broadly fits the distribution of employee jobs by industry within the Scottish economy as indicated in the Scottish Government's (2008) Scottish Economics Statistics 2008.

Table 7.2: Hours worked by occupation (student control group)

7.6 Of the student control group, 53% reported having paid employment, of this figure 83% worked part-time and 17% full-time (Table 7.2). Of all students therefore almost one in ten (9%) reported working full-time. Clearly the students who are working full-time are working more hours than recommended by the Cubie Report of 1999 as an acceptable level of hours for students to work whilst pursuing full-time study. However, so too, at 16 hours on average, are those students who work part-time.

7.7 The distribution of employee jobs by industry for the student control group is different from that indicated in the Scottish Economics Statistics 2008. The industries that are most popular with these students are retail and hospitality (37% of these students work in the former, 16% in the latter). However, this pattern is in line with numerous studies on student labour. These studies have consistently reported that students are most likely to work in retail and hospitality, in sales and customer service and elementary occupations (Warhurst and Nickson 2007).

7.8 In the main survey of FTHE combined students, only 39% of respondents reported not working during term-time i.e. 61% of the HE students from the main survey were working in paid employment during term-time (Chapter 2, Table 2.31). This 'in-work' figure is slightly higher than that for the student control group. However, the average part-time hours reported as being worked in the student control group are higher that those reported in the main survey for all full-time HE students - 16 versus 12 hours. (Although 16 hours were also worked by FE students in the main survey, Chapter 5, Table 5.15). In the main survey, the most popular industry was also retail, with strong presence in hotels and other services (Chapter 2, Table 2.35).

7.9 Members of the non-student control group were asked if they had ever considered going to college or university but had decided against it for financial reasons. Over 40% of all non-students reported that they had. The group were also asked if they had failed to complete a course for financial reasons, with 13% reporting that they had.

Table 7.3: Total income by characteristics (non-student and student control groups)

7.10 Irrespective of age and sex, the mean income of members of the non-student control group was more than twice that of the student control. Among the non-students, mean female income was around 10% lower than male income, while among the student control group mean income was slightly higher for females (Table 7.3). For students as well as non-students, those respondents from the working classes tend to receive a higher mean income. For those in employment, it is recognised that workers entering working class occupations tend to reach an earnings plateau fairly quickly, while middle class occupations can involve low initial training wages but experience steady wage increases thereafter. If members of our non-student sample are failing to enjoy significant patterns of occupational mobility, these explanations could help explain this variance.

7.11 Respondents from the non-student control have a mean income covering both full-time and part-time employment of £9241; respondents to the student control £4708. The mean income for FTHE combined students in the main survey is £5,166. As might be expected, compared to the non-student control group, the main survey FTHE students also have a much lower income. Compared to the main survey for FTHE students, the student control group's income is slightly lower, despite all students working in the same industries typically. However, it is a difference that has no significance given the sample size for the student control group.

Table 7.4: Sources of income (non-student and student control groups)

7.12 The vast bulk of non-students income is derived from paid employment. Despite students' high levels of engagement in paid employment, the work-related income of the non-students is around four times higher (Table 7.4). With some of the non-students being out of work, this group also received more in benefits. While students received an average of £1444 in informal contributions, non-students received around a third of that sum but which still represented an outlay for their parents. In addition and unlike the non-students of course, the students received study-related income from grants, bursaries and loans etc.

7.13 The median income received from paid work for the non-student control is broadly comparable to published data on the general UK population with the 2008 Annual Survey of Hours and Earnings ( ASHE) noting that the median income for the 18-21 year age group is £9,744.

7.14 Whilst there are some specific item differences, perhaps accounted for by the small size of the student control, the income pattern for the student control group and main survey HE students is similar. Income from paid employment is similar for the student control group and the FTHE students in the main survey (£1945 versus £2167). Study-related loans, grants and bursaries etc. amount to £1575 for the student control group and just over £2000 for the main survey students (Chapter 2, Table 2.4).

Table 7.5: Total expenditure by characteristics (non-student and student control groups)

7.15 Not only do the non-students have a higher income, they also have a higher expenditure than the student control (Table 7.5). Likewise the non-student group has considerably more expenditure that of the FTHE students in the main survey (£7764 versus £6339) (Chapter 3, Table 3.4).

7.16 Both male and female students in the student control group spent around 30% less than non-students. These differentials were similar whether or not students and non-students lived at home. Of particular note is that while for non-students mean income exceeds expenditure, for the students, expenditure exceeds income (for males by around 30% and for females by around 20%). This pattern is similar to that for the FTHE students in the main survey (£6339 versus £5166). It may be a basic point, but it confirms that, for this age group, studying incurs debts. By contrast, non-students have some capacity to save.

Table 7.6: Total and types of expenditure (non-student and student control groups)

7.17 Both students and non-students report spending most of their income on living costs (Table 7.6), followed by housing costs. None of the student control group had childcare costs, though some were incurred for the non-student group. ⁷⁴ Housing costs were similar for both student and non-student populations, although living costs were about 35% higher for non-students, perhaps suggesting that discretionary spending among students was limited.

7.18 The respondents from the non-student control spend more than the FTHE combined students in the main survey. The data for FTHE students from the main survey resonates with that of student control data (£6339 versus £5943).

7.19 In terms of the distribution of expenditure the student control and the main survey students have similar living and housing costs. The housing costs for the non-students groups are also similar to those of students. However, the non-students living costs are much higher.

Table 7.7: Percentage of respondents who reported having to go without various items (non-student and student control groups)

7.20 Respondents were asked to indicate if they had had to go without a range of items due to lack of funds (Table 7.7). On every item, the students were more likely to report having to go without, often by a substantial margin. Yet perceived hardship was widespread; only 7% of students and 12% of non-students saying that money was never tight. Almost one in 5 students and one in 10 non-students had gone without essentials such as food at home or heating. Around 6 in 10 students and 4 in 10 non-students had gone without alcoholic drinks or forms of entertainment. Among the students, one in 4 had gone without books, while one in 10 had been unable to afford a trip related to study.

7.21 As with the control group, in terms of going without, FTHE students in the main survey also reported that they went without clothes, shoes, alcoholic drinks, going out/entertainment and holidays.

Table 7.8: Respondents who reported being unable to pay for various items due to financial constraints (non-student and student control groups)

7.22 Students were more likely than non-students to find themselves in a position where they were unable to pay for essential goods and services (Table 7.8). Food, travel to college or work, utility bills, rent and credit cards were all mentioned by between 10 and 15% of the students. Non-students were equally likely to have problems with credit card payments, but were far less likely to have problems with other essential goods and services.

7.23 Similar proportions of FTHE combined students in the main survey reported being unable to pay for various items because of financial constraints. The percentage of FTHE combined students unable to pay for travel to work or college was marginally higher (19%). They were also substantially more likely to be unable to pay for food (23%) (Chapter 6, Table 6.12).

Table 7.9: Respondents description of the extent to which their money was sufficient for their current needs (non-student and student control groups)

7.24 Respondents were asked to indicate the extent to which their current income was sufficient to meet their current needs (Table 7.9). Just under half of the students and well over half of the non-students indicated that they had about the right amount or had more than they needed. However, slightly more than half of the students and just over 40% of the non-students had less than they needed, with 15% of students indicating they had a lot less than they needed.

7.25 In terms of income sufficiency, around 40% the FTHE students in the main survey felt that they had about the right amount or had more than they needed; around 60% felt that they had less that they needed (Chapter 6, Table 6.9). As with the control students, a large minority of main survey students, around 20% in this case, said that they had a lot less money than they needed.

Table 7.10: Total debt (non-student and student control groups)

7.26 Mean total debt for non-students in the control group is £2940 and for the student control £3520 (Table 7.10). The students therefore have more debt than non-students. The overall margins here are not great though given the relatively high sums reported by non-students, but obviously levels of debt among the students would be far higher if student loans were included.

7.27 Mean total debt for FTHE students in the main survey is £4987 (Chapter 4, Table 4.4). This is substantially higher than that of non-students and students in the control group.

7.28 What is significant in both cases of students is that they have more debt than non-students.

Table 7.11: Total savings (non-student and student control groups)

7.29 Perhaps surprisingly, the level of savings held by the student sample was higher than for the non-students (Table 7.11). We suspect that this points towards the habits of those students who work and save during vacations to help meet term-time expenses.

7.30 Among the students, 56% claimed to have some savings, compared to 62% of the non-students. 49% of the FTHE students in the main survey claimed to have some savings.

Summary

7.31 Our survey suggests that both students and non-students encounter significant levels of hardship and have relatively low levels of discretionary spending. Students, though, clearly faced greater financial hardships with lower income and expenditure than those who were not studying. Indeed, for students, expenditure tends to exceed income by a substantial margin. Despite the extensive engagement of students in paid employment (far greater, on average, than that regarded as acceptable in the Cubie Report of 1999), it is not uncommon for students to encounter severe hardship, having to go without essentials, as well as having to reduce course related expenditure.

7.32 Comparing the data for student control group and the FTHE Combined students from the main survey reveals similar levels of income (£4708 versus £5166) and expenditure (£6058 versus £6339), though the latter students have more debt (£3520 versus £4987) and lower savings (£4745 versus £1596).

7.33 Comparing the students in the control survey and FTHE students in the main survey across a range of measure, the data reveals that the latter students:

• Work in similar industries
• Work slightly less part-time hours in paid employment.
• Have similar levels of income
• Have similar levels of expenditure
• Have higher levels of debt (but this finding should be treated with caution)
• Have perceived similar hardships
• Have lower levels of savings

7.34 The student control therefore provides a useful source of data triangulation. Whilst there are some differences, there is enough consistency for the data to offer some validation for the data presented for all FTHE students from the main survey.

7.35 The data from the non-student control group revealed that a large percentage had been deterred from further study at college or university for financial reasons. This finding is important. More generally, comparing the non-students in the control survey and the FTHE students in the main survey, the data reveals that the latter:

• Work in different industries; the students tend to be more concentrated in particular industries, non-students spread more across all industries.
• Work less hours in paid employment, even when working part-time
• Have lower levels of income
• Have lower expenditure
• Have higher levels of debt
• Have lower levels of savings

36. This comparison thus demonstrates the utility of having a non-student control group. More importantly it confirms that students have higher levels of debt than non-students. Whilst non-students have a higher level of commercial debt, debt related to study over-shadows the total debt of non-students. Total mean debt for non-students is £3000; the study-related mean debt alone of students is £3467. In addition, these students also have commercial debts. Overall, the mean total debt for FTHE students is £4987.

Comparisons with the Previous Scottish Study

7.37 This comparative section has two tasks. Firstly, it integrates the current Scottish study's findings from the FTHE ( FTHE Combined) data with similar data from the previous studies of students in Scotland (Callender et al. 2005). Secondly, it integrates the FE data from the current Scottish survey with similar data from the previous Scottish study.

7.38 It should be noted, however, that there are differences in the research design of the previous Scottish study. The 2004-05 Scottish study of income, expenditure and debt for HE and FE was based on a nationally representative sample drawn from 15 Higher Education Institutions ( HEIs) and 20 Further Education Colleges ( FECs). Across the institutions a total of 1,317 face-to face-interviews were conducted. The vast majority of these interviewees (832) were under-graduates studying at both HEIs and FECs. The remainder (485) were students studying in a FEC, undertaking a variety of non-advanced courses.

7.39 For both the HE and FE comparisons, data is presented on total income, expenditure and debt, the distribution of income, expenditure and debt by type or source and then by the personal characteristics of the students.

Higher Education Comparisons

7.40 The section compares, where possible, FTHE data from the current Scottish study with that of the previous study of Scotland.

Table 7.12: Mean total income

7.41 Table 7.12 indicates that mean total income for students in Scotland has decreased in recent years. The main reason appears to lie with students receiving significantly less informal contributions, as Table 7.13 highlights. This development requires further analysis. Students also now have lower student loans, which resonates with the point made in Chapter 1 in relation to current data from the Student Loan Company. It should be noted, however, that income from other student support has risen slightly, indicating a slight shift in income sources for students within that which is study-related. Some of the detail on the sources of this income is indicated Table 7.13 below.

Table 7.13: Sources of mean income

Notes: * 'Other' income for the 2007-08 survey includes all other sources of income not already listed in the table, including income derived from benefits. The definition of 'Other' income for the 2004-05 survey does not include income derived from benefits as this income source was documented separately. Mean income derived from Social Security Benefits in 2004-05 was £265.

7.42 From Table 7.13, the level of informal income appears to have decreased though may have been artificially inflated in the previous study with the inclusion of a 'share of partner's income' in the previous Scottish study. What has increased is students' income from paid employment, up 15% since the last Scottish study.

Sources of income from government related to study i.e. from student loans and education-related grants and bursaries has roughly stayed the same if combined. From the table the key difference relates to sources of informal income, which appear to have decreased considerably since 2004-05, but should be treated with caution because the methodology used to calculate the previous figure for informal sources may not be comparable.

Table 7.14: Mean total income by student characteristics

7.43 Overall, income has decreased or stayed roughly the same in relation to the personal characteristics of Scottish students over the past few years. Income for female students has decreased (down nearly 14%) as has that for students living with and without parents as well as with and without dependent children. (These figures should perhaps be seen in relation to the sources of income outlined above in table 7.13.)

Table 7.15: Mean total expenditure

44. Overall, mean total expenditure has stayed roughly the same for Scottish FTHE students, Table 7.15 reveals. Within this headline figure, however, there has been a decrease in living costs, as Table 7.16 below reveals.

Table 7.16: Types of mean expenditure

7.45 Housing costs have stayed roughly the same for Scottish FTHE students, though living costs have fallen by about 12%. Child-specific costs appear to have risen, which is an important development given that such costs can be important for particular students e.g. mature students.

Table 7.17: Mean total expenditure by student characteristics

7.46 Expenditure appears to have risen in Scotland for mature FTHE students (up just over 30%) and those students with dependent children (up nearly 80%). Of course these two types of student are often the same. Expenditure for younger, male and students living with parents and without dependent children appear to have decreased in Scotland.

7.47 The table shows that expenditure for students with dependent children is now much higher. A large part of the difference probably relates to child-related costs. The previous study reported child costs as £618 compared with £3815 reported by students in the current survey. One explanation for this difference is that the previous survey calculated child costs differently, subsuming these costs within participation costs. However, participation costs were lower in the previous survey (see Table 7.17) and this therefore requires further analysis. This comparative result therefore should be treated with caution.

Table 7.18: Total mean debt

7.48 In Scotland debt has stayed roughly the same over recent years, Table 7.18 suggests.

Table 7.19: Types of mean debt

7.49 Study-related debt appears to have dropped in recent years in Scotland for FTHE students (Table 7.19). This finding would resonate with figures highlighted in the introduction of this report from the Student Loan Company ( SLC) that reveal that the amounts owed by Scottish students was less in 2006-07 than in 2005-06. Commercially-derived debt, however, has risen considerably. Pooling commercial debt and overdrafts for the 2004-05 students, this type of debt has risen by just over 60% for Scottish FTHE students in recent years. Informal debt has also risen and is now more than 10 times higher, though the starting figure for 2004-5 was low.

Table 7.20: Mean total debt by student characteristics

50. Table 7.21 highlights that since the previous Scottish study, some debt has stayed roughly the same e.g. for female students while that for younger students has decreased. Some students are now incurring more debt e.g. those students living with and not living with parents. Most debt increase has occurred though for mature students and those students with dependent children (both have more than doubled).

Further Education Comparisons

7.51 The section compares FE data from the current Scottish study with that of the previous study of Scotland.

Table 7.21: Mean total income

7.52 Mean total income for FE students has stayed roughly the same in Scotland over recent years (Table 7.21).

Table 7.22: Sources of mean income

7.53 Income through study-related sources has stayed roughly the same for FE students in Scotland over recent years (Table 7.22). Income received from paid employment though has increased greatly (up 65%). Income from informal sources has also increased, up by about a quarter.

Table 7.23: Mean total income by student characteristics

7.54 Income increases and decreases over recent years vary by type of FE student (Table 7.23). It has decreased for mature and female students (down 15% and 13% respectively), those students living with parents and with dependent children (the latter down 15%). It has increased for male students (up 15%) and stayed roughly the same for students with no dependent children.

Table 7.24: Mean total expenditure

7.55 Table 7.24 reveals that mean total expenditure for FE students has increased slightly in Scotland over recent years.

Table 7.25: Types of mean expenditure

7.56 Most large expenditure types have remained roughly the same in Scotland in recent years for FE students, Table 7.25 shows. Child-specific costs, however, have risen - more than three-fold - and participation costs have risen by 17%.

Table 7.26: Mean total expenditure by student characteristics

7.57 Expenditure appears to have risen in Scotland for FE students who are mature (up over 20%), female (up 15%), not living with parents (up 21%) and have dependent children (up a considerable 52%). Expenditure for FE students who are male or living with parents has fallen. Expenditure for students with no dependent children has stayed roughly the same.

Table 7.27: Mean total debt

7.58 FE students' debt has increased considerably since the last study, up nearly five-fold, Table 7.27 reveals. This finding is worth further investigation.

Table 7.28: Types of mean debt

7.59 The increase in the overall debt level identified in Table 7.28 above appears to be due to considerable increase in commercially-derived debt, up four-fold. Informal debt too has risen 16-fold, though the starting figure cited in 200-05 was low.

Table 7.29: Mean total debt by student characteristics

7.60 Noting the need for caution signalled earlier with regard to the previous study's methodology, it appears that debt for all students has risen in recent years. For mature FTFE students the rise has been considerable (almost five-fold); likewise nearly eight-fold for female students and almost five-fold again for students with dependent children.

Summary

7.61 There are some differences in financial calculations across the two Scottish studies that limit comparisons. Where comparisons are possible, the data shows that for FTHE students in Scotland:

• Mean total income in Scotland has decreased slightly in recent years.
• Mean total expenditure in Scotland has decreased slightly in recent years.
• Mean total debt in Scotland has stayed roughly the same in recent years.

7.62 Where comparisons are possible for FE students in Scotland, the data shows that:

• Mean total income in Scotland has stayed roughly the same in recent years.
• Mean total expenditure in Scotland has increased slightly in recent years.
• Mean total debt in Scotland has increased considerably in recent years.

7.63 Although there are increases and decreases for different types of income, expenditure and debt and variations by type of student - both FTHE and FE - considerable change has occurred for mature students and those students with dependent children.

Conclusions

7.64 Making comparisons both with other contemporary data and that from previous studies is useful. It provides benchmarks plus enables developments to be identified. Moreover, the student control group data comparison offers some confidence in the robustness of the current study's data for FTHE students. Across all of the comparisons though, it should be remembered that there were some sampling, definitional and reporting differences. Nevertheless, the comparative data is useful.

7.65 In Scotland, non-students have higher levels of income, expenditure and savings, and lower debt than FTHE students in the main survey. Moreover, as the HE student control indicates, students are more likely to report going without particular items such as clothes and food. Despite having the qualifications that would enable them to do so, it is perhaps not surprising then that a large proportion of the non-student group reports being deterred from post-compulsory education because of costs.

7.66 The student control group confirmed that students are working more hours in paid employment than was recommended in the Cubie Report of 1999. Income from this employment is rising and without it, it might be speculated that debt levels would be higher if expenditure remains constant.

7.67 Over recent years the income of FTHE students has slightly decreased - and, given the credit crunch and consequent recession in Scotland, the impact of both of which were unlikely to have been picked up in the current project, this situation will require monitoring. However, income has stayed roughly the same, though decreased for students with dependent children. Expenditure overall has decreased slightly; though has risen for mature students and risen considerably for students with dependent children. Overall, debt amongst FTHE students has stayed roughly the same though there have been shifts in the pattern of this debt driven by more money from commercial and informal sources. However, debt has risen considerably for both mature students and students with dependent children. These results should be treated with some caution though given that only 7% of our sample had dependent children and only 18% of our sample were above 25.

7.68 FE students' income has stayed roughly the same, though decreased for mature students and students with dependent children. Overall, expenditure has increased slightly for FE students, though much more for mature students and students with dependent children. Overall, debt has increased considerably for all FE students, though particularly so again for mature students and students with dependent children. The debt figure for FE students requires further investigation but seemingly driven again by commercial and informal credit - the same pattern as for HE students.

7.69 Notwithstanding the note of caution in 7.67 regarding sample size, an area of concern that emerges from the comparisons are the rising costs during study being borne by mature students and those students with dependent children. Widening access to post-compulsory education means encouraging participation from more 'non-traditional' students of which these two types are government priorities.

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