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5. FURTHER EDUCATION STUDENTS' INCOME, EXPENDITURE, DEBT AND SAVINGS

Introduction

5.1 Although there are some overlaps, on the whole, FE students have different funding arrangements from students studying HE. This chapter presents data covering income, expenditure and debt and savings of students studying FE in FE colleges. The chapter presents data for full-time FE students only. The data is drawn from 114 useable full-time FE student respondents to the main survey. Unlike for the HE students, there is no complementary qualitative data.

5.2 The chapter begins by examining FE students' income, then expenditure, debt and finally savings. For each of the first three sections, the aggregated mean in each case is first presented. These means are further examined to consider variations within them. In the presentation of FE students' income, it should be remembered that students studying further education do not receive student loans.

5.3 As with the HE students, data is presented for the academic term only unless otherwise stated. This term-time is calculated to be 36 weeks or 9 months (see Technical Appendix). This data was then annualised.

5.4 In most cases, the means are calculated across all students i.e. the mean of all students regardless of whether each student had a particular source of income or engaged in a particular form of expenditure. The exceptions are where mean figures are presented; for student loans calculated from information for those students who actually take a student loan; for data on child-related income and expenditure, which is calculated only for those students who have dependent children; for data on disability-related income and expenditure, which is calculated only for those students in receipt of disability related income. Where students live in households which share income and expenditure, they are asked for information on their own contribution to costs and their own sources of income, and it is this data that is presented. Finally, the variables' names are largely self-explanatory but the definition of each variable can be found in the Technical Appendix.

FE Students' Income

Table 5.1: Total and main sources of income ( FTFE)

5.5 Students' total mean income for the year 2007-08 was £4299 (Table 5.1). Sources of income occur from student support (includes bursaries and grants etc), housing and living contributions (from friends/family), paid employment (term-time only), benefits and other sources.

5.6 These other sources comprises £1776 from student support, £262 from living contributions from family/friends, £132 from housing contributions from family/friends, £1566 from term-time paid employment, £414 from benefits and £150 from other sources. Of these sources of income therefore, the most important was student support, which accounted for 41% of total mean income. The other largest source of income - term-time earnings - accounted for 36% of the total mean income.

Table 5.2: Total Income⁷⁰by student characteristics ( FTFE)

5.7 As Table 5.2 highlights, the widest income variation occurs in relation to whether or not students live with parents.

5.8 The table also shows that:

• Male students have a higher income than female students. Female students' income is only 86% that of male students.
• Younger students aged 16-20 years tend to have to lowest total mean income; students aged 21-24 the highest. Mature students, those aged 25 years and over, have a total mean income nearer the highest range.
• Students from middle class backgrounds have higher incomes than those from working class backgrounds. Students from a middle class background have a mean income of £4747; from a working class background £4015 (around 85% of that of middle class students) with a median of £2886 suggesting a wide dispersion of incomes.
• Students who had a family member attend university have higher incomes than those students without a family member who attended university.
• Students with dependent children have higher incomes - almost one third more - than those students without dependent children.
• Students who do not live with their parents have higher incomes than those students who do live with their parents; more than double in fact.

5.9 Thus students with the highest incomes tend to be male, older, from a middle class background, have a family member who has studied at university, have dependent children and do not live with their parents.

Table 5.3: Total and main sources of income by sex ( FTFE)

5.10 As Table 5.3 affirms, male students have a higher mean income than female students. Male students tend to have higher term-time earnings, informal housing and living contributions. Female students receive more income from Student support, benefits and other sources of income.

Table 5.4: Total and main sources of income by age ( FTFE)

5.11 Mid-age range students have most mean income, though there are variations in relation to how much each age group receives in terms of income sources. The youngest students receive most informal housing and living contributions, mid-age students most from term-time earnings, the oldest students the most from student support, benefits and other income. Across all age groups, term-time earnings and student support are the most important sources of income. (It should be noted though that the response rates amongst older students are low.)

Table 5.5: Total income by social class ( FTFE)

5.12 Table 5.5 summarises total income by class, comparing students from working class and middle class backgrounds. Students from working class backgrounds had lower income than those students from middle class backgrounds (£4015 versus £4747). Students from working class backgrounds report receiving more informal housing and living contributions; students from middle class backgrounds more term-time earnings, student support and other income. In terms of paid employment during term-time, students from middle class backgrounds earn around double that of students from working class backgrounds.

Table 5.6: Total and main sources of income by whether a family member has attended HE ( FTFE)

5.13 Less than one-third of students had a family member who had studied at university (Table 5.6). It is striking that compared to the two-thirds of students who did not have a family member who had studied at university; this one-third of students had considerably higher mean income (£5757 versus £3619). The advantage for these students lies in significantly higher term-time earnings and high income from student support, benefits and housing contribution.

Table 5.7: Total and main sources of income by dependent children ( FTFE)

5.14 As Table 5.7 indicates, students with dependent children have around 33% more income of students without dependent children; their main sources of income being student support and benefits. Indeed, students with dependent children receive 17 times the amount of benefits received by students without dependent children. The latter students though receive much more, relatively, in informal housing and living contributions than students with dependent children; though students without dependent children also have much more income from term-time paid employment. (It should be noted though that the response rates amongst students with dependent children are low.)

Table 5.8: Total and main sources of income by accommodation status ( FTFE)

5.15 Most students, 60%, live with their parents; nearly 17% live in rented accommodation.

5.16 Table 5.8 shows that students who live in a rented flat or house that is shared with others have the highest mean income compared to those who live with their parents (£6356 versus £2888) or more than double. These FE students also have more income from term-time earnings, student support and benefits than students who live with their parents.

Table 5.9: Total and main sources of income by year of study ( FTFE)

5.17 Most students answering the question related to the data in Table 5.9 were students in the first year of their study. FE students in their first year of study have a total mean income of £4363. The two largest sources of income for these students came from student support and term-time earnings. Income from student support comprised almost 40% of total mean income and term-time income just less than 40%. The differences within this year of study are large. Students in the first quartile earn only just over a quarter of the income of students in the third quartile. However, because responses from 2 ^nd and 3 ^rd year FE students are so few, it would be unwise to comment on the data from these students.

Table 5.10: Total and main sources of income by final year of study ( FTFE)

5.18 Most respondents to this question were final year students (101 versus 13) and comparisons should therefore be treated with caution (Table 5.10). Overall, non-final year students had more mean income than final year students, which might not be surprising given that it might be expected that final year students would be more inclined to concentrate on their studies. However, this assumption is undermined by the finding that final year students have significantly larger term-time earnings. The comparative deficit appears to occur because non-final year students receive significantly more income from housing and living contributions and student support.

Table 5.11: Main sources of student support ( FTFE)

Note: FE students do not contribute to the Graduate Endowment Scheme.

5.19 Table 5.11 outlines all sources of income derived from dedicated student support. FE Bursaries provide the source of most of this student support. Only five other sources of student support feature. The most significant of these other sources was the Mature Students Bursary, followed by the Education Maintenance Allowance, Young Student Bursary and Hardship Fund.

Table 5.12: Total and main sources of income by term-time employment ( FTFE)

5.20 Just less than half (49%) of FE students have paid employment during term-time (Table 5.12). For those students who had paid employment during term-time, term-time earnings were the largest source of income, providing a mean of £3178 and contributing over half of their total mean income. Student support was the second main source of income, contributing almost a third. For those students reporting having no paid employment during term-time, most income is derived from student support, which comprises over half of all income. These students also receive more incomes from benefits than students with paid employment.

Table 5.13: Total and main sources of income by vacation employment ( FTFE)

5.21 Just less than half of the sample (49%) worked in paid employment during vacations (Table 5.13). These students have around double the total mean income of those students without vacation paid employment. As Table 5.13 shows, term-time earnings were also a more important source of income for these students. For those students who reported not having paid employment during vacations, most income (almost 80%) is derived from student support and benefits

Table 5.14: Paid income by industry ( FTFE)

5.22 Table 5.14 shows income from paid employment during term-time and vacations. As might be expected, it reveals that the two main sources of paid employment were the retail and hospitality industries. These two industries provided paid employment for over 60 per cent who answered this question. However, these industries did not provide the highest mean incomes. The highest mean income instead was provided for students working in the transport, storage and communication industries as well as other services. Note, however, that the number of respondents working in most industries except retail, hospitality and other services is low and so data from these respondents should be treated with caution.

Table 5.15: Number of hours worked and hourly wages ( FTFE)

5.23 At 16 hours, the average number of hours worked in paid employment during term-time is higher than the recommendation by the Cubie Report of 1999 at 10 hours. The number of hours worked by students in paid employment during vacations obviously rises. Given that students typically work in jobs with low entry and exit barriers, and in industries in which low pay is prevalent (Lloyd et al. 2008), that hourly wage rates for students in paid employment hovers around the national minimum wage should not be of any surprise. Indeed, all pay indicated in Table 5.15 is below the low pay threshold.

FE Students' Expenditure

Table 5.16: Total and main types of expenditure ( FTFE)

5.24 The mean total expenditure for FE students was £5,581 (Table 5.16). Most of this expenditure is accounted for by living costs, which amounts to two thirds of total expenditure. The other main types of expenditure are housing costs followed by participation costs, both of which account for just over 10% of total expenditure. There is a huge difference, however, between expenditure for students in the bottom and third quartiles. Those students in the third quartile have an expenditure of more than two and a half times the amount of students on the first quartile.

Table 5.17: Total expenditure by student characteristics ( FTFE)

5.25 As Table 5.17 reveals, those students with the highest mean expenditure are those with dependent children with £9952. Those students with the lowest mean expenditure are those who live with their parents with £3783.

5.26 The table also shows that:

• Female students have a much higher total expenditure than male students (£6044 versus £4998). Indeed the average female student's expenditure is more than 20% higher than that of male students.
• In terms of age, students aged 21-24 years have the highest expenditure, although mature students' expenditure is also high compared to the youngest students.
• Students from a middle class background have a larger mean expenditure of £6612 than students from a working class background whose expenditure is £5425 (with a median figure of £4230).
• Those students with a family member having studied at university have a higher expenditure than those students with no family member having studied at university (£5994 versus £5388).
• Those students with dependent children have around double the level of expenditure of those students with no dependent children.
• Those students who do not live with their parents have more than double (117%) the expenditure of those students who do live with their parents.

5.27 Generally, therefore, female students have higher mean expenditure than male students. Expenditure is least amongst youngest students, peaking with students aged 21-24 years, though both this group and mature students have considerably more expenditure than the youngest age group. Students from middle class backgrounds, those students with a family member having studied at university, with dependent children and who do not live with their parents have higher mean expenditure.

Table 5.18: Total and main types of expenditure by sex ( FTFE)

5.28 Female FE students have a higher total mean expenditure than male FE students, 20% higher (Table 5.18). Whilst female and male living costs are similar, female students have significantly higher mean expenditure on almost all other types of expenditure: housing costs, participation costs and child costs.

Table 5.19: Total and main types of expenditure by age ( FTFE)

5.29 As Table 5.19 indicates, older students generally have higher mean expenditure, though it is the mid-age range students who have the highest housing, living and, perhaps surprisingly, child-related costs. Housing costs are considerably lower for the youngest student group, less than one-third of that for the mid-age and less than a half of that for the oldest students.

Table 5.20: Total and main types of expenditure by social class ( FTFE)

5.30 Students from a middle class background have a higher total expenditure than students from working class backgrounds (Table 5.20). The former's total mean expenditure is more than 20% higher than that of the latter. Whilst students from a working class background spend more on child-related costs, students from middle class backgrounds spend significantly more on participation costs, living costs and housing costs.

Table 5.21: Total and main types of expenditure by whether or not a family member has attended HE ( FTFE)

5.31 One-third of students had a family member who has studied at university. This one-third of students had a higher total mean expenditure than the two-thirds of students who had not had a family member who had not studied at university (£5,994 versus £5,388). Approximately, such students have a total mean expenditure that is 10% higher. Their expenditure tends to be higher for child-related costs and significantly, housing costs. Students who have had a family member who has studied at university spend approximately 40% more on housing costs.

Table 5.22: Total and main types of expenditure by dependent children ( FTFE)

5.32 Not surprisingly, those FE students with dependent children have much higher expenditure than students without dependent children - almost double (Table 5.22). Much of the difference for this small number of respondents, again unsurprisingly, is made up of child-related costs. Living costs though are also considerably higher for these students as are housing costs and participation costs. (It should be noted though that the response rates amongst students with dependent children are low.)

Table 5.23: Total and main types of expenditure by accommodation status ( FTFE)

5.33 Most students, almost 60%, live with their parents (Table 5.23). Students who do not live with parents have considerably higher mean expenditure than students who do live with parents - more than double.

5.34 It is not surprising that students who do not live with their parents have higher mean housing costs but these students also have higher mean living, participation and child-related costs.

5.35 With mean FE student expenditure being £5581 (Table 5.16), students who do not live with parents, rent a house or flat with others and live in a house or flat self-owned all have above average expenditure. Students who live with their parents have expenditure considerably lower than the average.

Table 5.24: Total and main types of expenditure by year of study ( FTFE)

5.36 The number of student answers related to second and third years of study in Table 5.24 are low and do not enable analysis. Students in their first year of study have a slightly higher total mean expenditure from that for all students in Table 5.16 (£5682 versus £5581). Most other types of expenditure are also slightly higher than the average for all students, but not significantly so.

Table 5.25: Total and main types of expenditure by final year of study ( FTFE)

5.37 The number of answers to this question from non-final year students is low and should be treated with caution. Compared to final year of study students, non-final year students have a slightly higher total mean expenditure (£5,529 versus £5,984). This higher expenditure features most in living costs (£4,257 versus £3,676) and slightly higher housing costs.

Table 5.26: Total and main types of expenditure by child-specific costs ( FTFE)

5.38 Of the small number of FE students paying child-related costs, these students have considerably higher expenditure than students not paying such costs (Table 5.26). For these students, in fact, all costs are much higher relatively.

Table 5.27: Total and main types of expenditure by term-time employment ( FTFE)

5.39 Of those students who have term-time paid employment, their mean total expenditure is higher than for those students without paid term-time employment (£6,426 versus £4759). Their housing costs are also significantly higher and living costs are higher too. Participation costs are, however, slightly lower.

FE Students' Debt

Table 5.28: Total and main types of debt ( FTFE)

5.40 The average total debt of full-time FE students is £1266. This debt comprises £41 from study-related debt, £1097 from commercial sources and £128 from informal sources. The largest source of debt is therefore commercial debt, comprising 87% of the total. The other sources of debt - study and informal - comprise 3% and 10% respectively.

Table 5.29: Total and main sources of debt by those who have debt ( FTFE)

5.41 Fifty-five students reported having debt (Table 5.29). Of these FE students, most of their debt is from commercial sources - almost 87% of their total debt in fact.

Table 5.30: Total debt by student characteristics ( FTFE)

5.42 Table 5.30 reveals that for all FE students, those with the lowest mean total debt are those who live with their parents; those with the highest mean debt have dependent children.

5.43 The table also shows that:

• Female students have a considerably higher mean total debt than male students; more than three times higher.
• Debt increases with age. Students aged 16-20 years have low debt at £624, whilst the mean total debt of mature students is more than 5 times higher at £3487.
• Although mean total debt is higher for students from middle class backgrounds, it is not markedly higher than that for students from working class backgrounds (£1536 versus £1342).
• Students with a family member who has studied at university have a higher mean total debt than those students who do not, although again the difference is not dramatic (£1394 versus £1206).
• There is a very big difference in mean total debt arising from having dependent children. Students with dependant children have a mean total debt level 3.5 times higher than students with no dependant children (£3475 versus £989). (With a low response from students with dependent children, these figures should be treated with caution.)
• Similarly, there is a large difference in debt levels for students with different living arrangements. Those students who do not live with parents have a mean total debt level three times higher than that of students who live with parents (£2107 versus £689).

5.44 Generally therefore, higher mean total debt arises for female students, older students, middle class students, students with a family member having studied at university, students who have dependent children and students who do not live with parents.

Table 5.31: Characteristics of those who do not have debt ( FTFE)

5.45 As Table 5.31 shows, around half of the sample of FE students reported having debt. Of those FE students who do not have debt, that lack of debt is more prevalent amongst male and younger students, students from working class backgrounds, and those students who do not have a family member who has studied at university, do not have dependent children and live with their parents.

Table 5.32: Study-related credit by student characteristics ( FTFE)

5.46 Table 5.32 reveals that study-related debt is generally low for FE students. As an average, the highest such debt is born by mid-age range students and is £202. Note the lack of study-related debt reported by students from working class backgrounds.

Table 5.33: Study-related debt by year of study ( FTFE)

5.47 Data in Table 5.33 again relates to study-related debt. The number of student answers related to 2 ^nd and 3 ^rd years of study are low and do not enable analysis. For those students for which data is meaningful, 1 ^st year students, the table reveals that such debt is low per student, on average only £43.

Table 5.34: Commercial credit by student characteristics ( FTFE)

5.48 Students with the highest mean debt resulting from commercial credit are mature students, closely followed by those students with dependent children (£3400 and £3272 respective). These categories of course are not mutually exclusive. Students with the lowest mean debt resulting from commercial credit are the youngest students (£454).

5.49 As Table 5.34 highlights:

• Female students' mean commercially derived debt is just less than four times that of male students.
• Mean commercially derived debt rises with age. Young students aged 16-20 years have a debt level 7.5 times lower than that of mature students aged 25 and older (£454 versus £3400).
• Middle class students' mean commercially derived debt is lower, by one quarter, than that of working class students (£950 versus £1282).
• Students with a family member who has studied at university have a higher mean commercially derived debt than that of students without a family having studied at university (£1237 versus £1031).

• The biggest gap in levels of mean commercially derived debt occurs because of dependent children. Students with dependent children have debt almost 4 times higher than that of students with no dependent children. (Though again, with a low response from students with dependent children, these figures should be treated with caution.)

• Not living with parents also results in higher mean commercially derived debts. Students who do not live with parents have a debt level more than three times higher than that of students who live with parents (£1878 versus £561).

5.50 In general, students with the highest mean debt resulting from commercial credit are female, older, from a working class background, have family members who have studied at university, have dependent children and do not live with parents.

Table 5.35: Commercial credit by year of study ( FTFE)

5.51 Table 5.35 relates to debt derived from commercial sources, for example credit cards and bank loans. The number of student answers related to 2 ^nd and 3 ^rd years of study are low and do not enable analysis. For those students for which data is meaningful, 1 ^st year students, the table reveals that the mean debt per student is £1142.

Table 5.36: Total debt by year of study ( FTFE)

5.52 Students in their 1 ^st year of study have a slightly higher mean total debt at £1308. Because responses from 2 ^nd and 3 ^rd year FE students are so few, it would be unwise to comment on the data from these students.

FE Students' Savings

5.53 These tables present data on FTFE students' savings. It should be noted that the data relates directly to answers provided to dedicated answers to savings in the main survey questionnaire i.e. the data is not derived from inferences about income and expenditure differences. It should also be noted that when these savings were amassed by the students is not known; they might have been prior to or during study. It is also not clear whether these savings are being drawn down over the period of study.

Table 5.37: Total savings ( FTFE)

5.54 Table 5.37 shows that FTFE students have total mean savings of £482.

Table 5.38: Total savings for those who have savings ( FE)

5.55 Not all FE students have savings; only 28 or around a quarter of the sample reported having savings, as Table 5.38 reveals. Examining the data for these students only generates a very different picture of the level of savings. Of those who do have savings, the mean amount is much higher than the mean across all students (£1964 versus £482).

Table 5.39: Total savings by student characteristics ( FE)

5.56 Across all FE students, as Table 5.39 highlights, those with the highest mean total savings are males (£854); those with the lowest the mid-age range students (£22).

5.57 The table also reveals that:

• Male FE students have, on average, significantly more savings that female students - almost four and half times the level of savings of female students.
• Students from a working class background have, on average, more than double the savings of students from middle class backgrounds.
• Mature students, those aged 25 years and over, have significantly more savings than younger students; nearly four times the level of savings of the youngest students aged 16-20 years. Students aged 21-24 have virtually no savings.
• FE students with dependent children have less savings than students with no dependent children.
• FE students with a family member who has studied at university have more savings than students with no family members who have studied at university.
• FE students who live and do not live with their parents have a similar level of savings.

5.58 Comparatively, those FE students with the highest savings therefore tend to be male, from working class backgrounds, among the oldest students, with no dependent children and who have had a family member who has studied at university.

Table 5.40: Total savings by student characteristics for those who have savings ( FE)

5.59 Not all FE students have savings. Only 28 or just less than one quarter of the sample reported having savings.

5.60 Of those students who do have savings, Table 5.40 shows that:

• Male students have a level of savings almost six times higher than that of female students.
• It also shows that that the oldest students have more savings; almost 18 times higher than the savings level of the mid-age range status and 5 times higher than the youngest students.
• Those students from working class backgrounds have more than double the level of savings of students from middle class backgrounds.
• Those students who have a family member who has studied at university have higher savings levels than students who do not have a family member who has studied at university.
• There is not a large difference in the levels of savings between students who have dependent children and those who do not.
• Those students who do not live with their parents tend to have roughly double the level of savings of students who do live with their parents.

5.61 Thus, of those FE students who do have savings, comparatively, highest savings are held by those who are male, oldest, from working class backgrounds, have a family member who has studied at university, and do not live with their parents.

Table 5.41: Total savings by year of study ( FTFE)

5.62 The number of student answers related to 2 ^nd and 3 ^rd years of study are low and do not enable analysis. For those students for which data is meaningful, Table 5.41 reveals that students in their first year of study have mean savings of £503.

Summary

5.63 The data on full-time FE students' total income, expenditure, and debt and savings is summarised in Table 5.42 below. These figures represent the means (and where appropriate medians) for all students.

Table 5.42: Summary of finances ( FTFE)

5.64 It should be noted that that this table does not represent a simple adding and subtraction exercise, rather the figures presented by the students from the tables above.

5.65 The most important sources of income for FTFE students are student support and term-time earnings. Students with the highest incomes tend to be male, older, from a middle class background, have a family member who had studied at university, have dependent children and do not live with their parents.

5.66 Most of expenditure is accounted for by living costs. Students with the highest expenditure tend to be female, older, from middle class backgrounds, with a family member having studied at university, with dependent children and who do not live with their parents.

5.67 Around half of all FTFE students have debt. A lack of debt is more prevalent amongst male and younger students, students from working class backgrounds, and those students who do not have a family member who has studied at university, do not have dependent children and live with their parents.

5.68 Not all FTFE students have savings. Of the quarter of students who do report having savings, the highest savings are held by those who are male, oldest, from working class backgrounds, have a family member who has studied at university, and do not live with their parents.

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