Student Finance and Wellbeing Study (SFWS) Scotland 2023-2024: main report

17. Conclusions and potential policy considerations

The Student Finance and Wellbeing Study consisted of a representative survey of 2429 students from 16 Scottish colleges and 16 Scottish universities, combined with follow-up qualitative interviews (n=27) and focus groups (n=23) with survey respondents.

The findings provide insight into the financial experiences of students across Scotland at FE, HN/undergraduate and postgraduate level, as well as exploring the experiences of both full-time and part-time students.

This section seeks to draw out some of the key findings from the survey and the qualitative research, as well as considering the possible implications for policy.

Overarching findings

Overall, while the findings from the research show there were students who were reasonably comfortable financially, the data found the majority of students from all backgrounds were struggling financially. In the survey, half or more of students reported that they had experienced financial difficulty, ranging from 50% of postgraduates, 56% of HN/undergraduate to 61% of FE students. Two-thirds (66%) of students from under-represented groups reported that they were experiencing financial difficulties.

The financial difficulties experienced, and the resulting impacts, reported by students varied. In line with findings from other research, many were making behavioural changes to reduce their costs, such as shopping around or cutting back on social activities or holidays. Others were experiencing considerable levels of financial hardship. For example, 36% of FE students and 59% of postgraduate students said they used less fuel such as gas or electricity in their home, while 25% of postgraduates and 47% of FE students reported skipping meals. About one in six (15%) FE students and one in ten (11%) students from under-represented groups had accessed support from foodbanks as a result of their financial difficulties, which aligned with the findings of NUS Scotland's 2023 Cost of Survival report. It should be noted that this is a higher percentage reporting access to foodbanks compared with the general population. The Trussell Trust found 3% of all individuals in the UK reported using a foodbank in the previous 12 months in 2022/23. The qualitative research also showed that some students could not afford to heat their homes during winter or were skipping meals on the days when they were on campus as a result of not having enough income to cover all their costs. This echoes findings of other surveys with students which outline a wide range of students' cost-cutting behaviours in response to the rapidly increasing cost of living.

While financial struggles affected students from a wide range of backgrounds, this was particularly stark among those who were not able to access financial support from others (e.g. parents, partners, family or employers). The qualitative interviews and focus groups showed how estranged students, care experienced students and those from families whose parents could not afford to provide financial support tended to face additional financial challenges in meeting the cost of their basic needs whilst studying. The precarious financial positions of estranged and care experienced students has been highlighted in previous research with students from these backgrounds in Scotland. Research undertaken for NUS Scotland has similarly highlighted the challenges faced by students whose household incomes are such that they are not entitled to higher loans/bursary, but whose parents are either unable or unwilling to help support them financially. As the findings in this report illustrate, those who were able to draw upon regular financial support from parents, a partner or a full-time employer reported coping better financially. Students with additional costs, such as student parents experiencing childcare costs and those who had to fund the cost of their accommodation, experienced greater financial difficulties.

Student support

Scotland's system of student support differs to the rest of the UK. Tuition is free for the majority of FE and HN/undergraduate students, with the Scottish Government funding tuition for eligible Scottish-domiciled students enrolled on courses in Scotland. FE and HN/undergraduate students who took part in the qualitative research spoke of their relief at having their fees paid. This research is unusual in that it has begun to explore through qualitative research the financial experiences of postgraduate students in Scotland – something which few studies have done to date. Among postgraduate students, paying fees could be a source of worry for some, in light of the fact that some Masters course fees were higher than the tuition fee loans available. Similarly, those paying HN/undergraduate and postgraduate fees shared that meeting the cost of their fees required careful budgeting and often paid employment.

Almost half (49%) of HN/undergraduates, 29% of those from under-represented groups, and 25% of postgraduates received income from student loans. In the qualitative research, eligible students tended to view student loans for living costs as a necessary part of being a student, with loans perceived as critical to cover living costs, particularly for those who had accommodation costs. However, student loans were also a source of worry, with students in both the survey and qualitative research expressing fear at the prospect of repaying their student loan debt. Similar findings can be found in other Scottish studies on attitudes to student loan debt, with students from both lower and higher income backgrounds displaying a reluctance to take out student loans. This led some eligible students to decide not to take on living cost loans, instead relying on parental financial support (where available) and/or paid work. As found in other research, estranged, care experienced and low income students were particularly worried about student loan debt. By contrast, as this report and the research outlined above show, some students who rely on regular financial contributions from their parents are able to reduce student loan debt or avoid it entirely.

In contrast to England, bursaries and grants continue to exist alongside student loans in Scotland, and a wide selection of bursaries are offered to students, based on their status (care experienced, estranged etc.), financial background or course of study. These were viewed positively by students in receipt of bursaries who highlighted the ways in which they had impacted on their experiences. The impacts were greatest for those funded entirely through bursaries (e.g. maximum FEB, CESB and PNMSB). Those receiving lower levels of non-repayable support (e.g. estranged students, and those receiving YSB and ISB) noted their greater reliance on student loans. At FE level, the reduction in, or in some cases removal of, FEB and EMA, due to attendance requirements, worsened the already precarious finances of vulnerable students. Some noted that they could not afford to travel to college. Others, including estranged students, highlighted mental health issues which prevented them from attending. This issue was raised in a previous Scottish Government study with estranged students. However, more broadly, there remains a gap in the literature around the financial experiences of FE students.

In the survey, around half (52%) of FE students reported that the financial support available to them was sufficient, compared with less than half of HN/undergraduate (45%), postgraduate (40%) and under-represented group (41%) students. This meant that many students who participated in this study reported that the financial support available to them (via student loans for tuition fees and/or living costs, bursaries, grants, allowances etc.) was not sufficient. The qualitative research found that even amongst those students receiving the highest levels of non-repayable education-related income (including those receiving maximum bursaries via FEB, CESB and PNMSB) this was often deemed insufficient to cover their financial needs. Similar findings have been highlighted by recent NUS Scotland surveys of students.

The Scottish Government has announced the provision of increased financial support for students from the start of the 2024-2025 academic year. The new Special Support Loans will see total funding (including loans and bursaries combined) for HN/undergraduate rise by £2,400 to £11,400 for those students with a household income of less than £21,000. The Special Support Loan of £2,400 will also be provided in addition to the £9,000 Care Experienced Student Bursary, but will not apply to Paramedic, Nursing or Midwifery students (who access a separate student support package), part-time HN/undergraduates or FE students. For postgraduates, the uplift will raise the total package available for full-time students to £13,900 (comprising £7,000 tuition fee loan and £6,900 living cost loan).

The loan uplift means the funding for these students is in line with the Living Wage. However, the fact that so much of this funding is in the form of a student loan is likely to be a cause for concern among students. In the survey for this study, 65% of FE and HN/undergraduate students, and 70% of students from under-represented groups and postgraduate students were 'very' or 'fairly concerned' about taking out a loan as an additional form of student support, over and above any loan they were already entitled to. Estranged students who took part in the qualitative research noted the majority of their funding came from student loans and highlighted the additional stress associated with their repayment and the ways it may impact on their future plans in terms of planning to enter employment rather than progress on to more advanced study.

Other approaches to boost income

In an attempt to further boost their incomes, the majority of students undertook some form of paid work. Almost half (46%) of FE students were in some form of paid employment, compared with 76% of HN/undergraduates, 83% of postgraduates and 64% of students from under-represented groups. The most recent SIES research from England in 2021-2022 found that lower proportions of full-time HE students in England undertook paid work alongside their studies (58%). Data illustrating that Scottish students work more hours in paid work than their counterparts in the rest of the UK appear to be a long-standing feature, having been noted in the last SIES report for Scotland in 2007-2008. In this research, paid work was viewed by students as being essential to fund living costs. However, some groups, such as student parents, disabled students and students who were carers, noted the challenges of combining paid work with their studies. The median number of hours worked in paid employment by FE students was 22 hours per week, and full-time HN/undergraduate students reported working for 16 hours per week. These are higher weekly totals than the recommended 10 to 15 hours of paid work per week recommended by Student Information Scotland.

The findings also show that some students relied on discretionary funding to be able to get by. Around 1 in 10 (9%) of FE students had received discretionary funding during this academic year (5% for HN/undergraduates; 8% among students from under-represented groups and 4% among postgraduates). In the interviews and focus groups, students applied for discretionary funding to cover a range of costs including rent, tuition fees, travel to university or college, and other living costs whilst studying or during the summer break when loan and bursary instalments ceased. The survey and qualitative data also highlighted how awareness of the availability of discretionary funding varied, with some students stating that they had not heard of discretionary funding until they participated in the qualitative research, whilst others were accessing it. Elsewhere, students responding to the survey and the qualitative research pointed to the challenges associated with accessing discretionary funding including a lack of awareness, the complexity of the application process and the sometimes intrusive nature of evidence required. These findings add to those of previous Scottish Government research with estranged students showing that students from a wide range of backgrounds experience challenges accessing discretionary funding.

The qualitative research found that in cases in which students were just about managing to fund their basic living essentials, an unexpected payment, such as that for a broken boiler or car maintenance, could lead some to have to turn to commercial credit. Others reported using commercial debt to fund essentials such as bills or furniture. Two fifths (41%) of postgraduates had taken out commercial credit, compared with 34% of students from under-represented groups, 28% of HN/undergraduate students and 21% of FE students. This compares with NUS Scotland's 2022 finding that 31% of students had accessed commercial credit. Some students who took part in the qualitative research reported using door-to-door lenders as well as more formal commercial credit and spoke of the challenges and stress associated with repaying high interest loans.

There were particular times of year when students were likely to face additional financial challenges and had to find other means to cover their costs. The summer months were viewed by many as a difficult period. This was particularly the case for estranged students, student parents, and those who were unable to rely on their family or partners for additional financial support when student funding payments ceased. As the research was conducted prior to the announcement that payment of student financial support for eligible HE students could be spread over the duration of the year rather than term time, it is not possible to know from this study how students felt about this option.

Student wellbeing and decision-making

A key aim of this research was to explore the relationship between finances and students' overall wellbeing. The findings show student wellbeing is heavily linked to their financial circumstances. The most commonly reported impact of experiencing financial difficulties was the worry and stress it caused; this was the case for nine out of ten students. Fifty-nine per cent of students from under-represented groups, compared with between 45% and 52% of FE, HN/undergraduate and postgraduates, reported that financial difficulties had affected their mental health and wellbeing either 'a great deal' or 'a fair amount'. This compares with NUS Scotland student surveys which found that 69% of students indicated their mental health had suffered as a result of financial worries, and the Student Money Survey reported that 82% of students had concerns about making ends meet. Similarly, surveys of college and university students in Scotland by the Mental Health Foundation in partnership with Universities Scotland and Colleges Scotland found 74% of university students, and 64% of college students, reported low mental wellbeing. Three-quarters of college students who reported low mental wellbeing had experienced food insecurity or had a long-term health condition, and half had a disability.

Finance influenced students' decision-making about where and what to study, where to live while studying and whether to progress to a higher qualification level. Almost a third of HN/undergraduate students said the finance available had affected their decision as to which college or university to attend (29%) and whether to study at a nearby college or university (29%).

Worrying about money impacted on students' ability to engage in their studies, and to make the most of the opportunities associated with wider student life. Between half and two-thirds of all student groups reported that financial difficulties had affected their studies 'a great deal' or 'a fair amount'. Qualitative data illustrated the ways that financial concerns affected students' abilities to concentrate on their studies, their ability to travel to college or university, and the difficulty of balancing paid work, academic studies and socialising with others. Finances were also reported to play a role in students withdrawing from courses. More than two-fifths (44%) of students from under-represented groups had considered leaving their course. This compares with lower proportions of FE (30%), HN/undergraduate (39%), postgraduate students (37%). The most frequently reported reasons by all student groups for considering dropping out were the difficulty of balancing paid work and study, not having enough money to survive on through student loans and/or bursaries and deferring because of physical or mental illness.

The study also explored the factors which can reduce students' financial struggles, or assist them should they occur. Not having student loan debt reduced the financial pressures experienced by students, as did increased financial support from non-repayable sources such as bursaries, scholarships, employers, parents, partners, etc. Living at home with parents (for those for whom that was possible) enabled students to reduce their costs, but this was balanced with increased commuting time to college or university for some.

Conclusions

The findings from this study provide baseline data on college and university students' finances across all qualification levels in Scotland. This study adds to the limited published Scottish literature on students' finances; it is the first time such data has been collected since 2007-2008. The study also saw the expansion of data collected and included FE and postgraduate students. The qualitative interviews and focus groups with students provide insights into their financial experiences, including the factors which they reported make it easier or harder to meet their everyday financial needs.

The findings echo those of recent student surveys by NUS Scotland, which highlight the financial challenges experienced by Scottish FE, HE and postgraduate students; for example, in terms of food bank use, skipping meals and missing classes due to not being able to afford to travel.

The study found that while some students were managing financially and felt student support was sufficient, many perceived current student funding and support to be insufficient to meet their needs, particularly for those faced with accommodation costs. In a context in which most students in Scotland have their tuition fees paid by the Scottish Government, this study has found a significant proportion of students are still facing major financial difficulties that are affecting their study choices and behaviours. The findings point to the disproportionate effect of financial difficulties on students from particular groups, including FE students, estranged students, care experienced students, student carers, student parents, and disabled students. They also point to socioeconomic differences at all qualification levels, with students from the 20% most deprived areas often experiencing greater levels of need or financial difficulty, and consequently experiencing additional financial stress which impacted detrimentally on their mental wellbeing. Without additional, targeted funding there may be a risk that student inequalities could increase.

Policy considerations

It is clear from the research that many students at all study levels are struggling to meet the cost of studying, and that many students consider government student funding on its own as not sufficient to cover these costs. These findings come at a time when public funding is under increasing pressure and scrutiny, and additional financial resource may not be available for student funding. Therefore, further consideration is needed to ensure the student support offering is fair and sustainable. For example, the Scottish Government could consider the balance between the provision of universal and targeted support.

There are suggestions in these findings that while the majority of students face financial challenges, there are those whose financial circumstances are particularly precarious, including those who are unable to rely on the support of others, those with caring responsibilities and those from low income backgrounds. Therefore, ongoing consideration should be given to how these groups can be further supported when studying. In recent years, support for specific student groups has been provided, and there has been an increase in university attendance amongst care experienced students and students from the 20% most deprived areas. To ensure this progress continues, better targeted support of those groups in the most need, financially or otherwise, needs to be considered.

Another important consideration is the balance between repayable and non-repayable education related income. Loans for FE students could help improve the income of FE students, yet 65% of FE students are concerned about taking on student loan debt. Findings from this research, and other studies, show that those from the most vulnerable backgrounds are particularly debt averse. This includes estranged students who relied on student loans but were concerned about repaying them in the future. If funding continues to be offered predominantly in the form of student loans, there is a potential risk that this may hamper on-going efforts to widen access, at all study levels, for particular student groups. This research highlights a desire from a range of students for more non-repayable bursaries though balancing this within available budgets would require careful consideration from the Scottish Government.

In addition to reflecting on how student funding is distributed, how it is promoted and communicated to potential or current students could be more effective. While there is information available on student funding from a range of sources, students are facing challenges finding and using this. Students in this research were often unaware and unable to access financial sources of support they may have been eligible for. Although progress has already been made, additional work is required from schools and the further and higher education sector to improve the promotion of and accessibility to information, advice and guidance on all elements of student support. This could help to further ensure that the burden on students in finding information is reduced, that students fully understand their financial options and are able to access appropriate support.

Areas for future research

While this study has produced detailed and rich data which can be used to inform future policy, further insight could be gathered from additional analysis of the survey dataset beyond the scope of this study. There is also a need for further research on specific student groups. For example, more targeted and in-depth research on the experiences of FE and HNC/HND students studying at colleges, who tend to come from more deprived areas, would be beneficial. Further research on the experiences of postgraduate students, student parents, and student carers, as well as with students with protective characteristic, would also help provide greater insight into their experiences when at university or college. Finally, repeating this research more frequently to understand the financial experiences of students over time would be invaluable. The last iteration of this study took place over 15 years ago, and if student financial experiences in Scotland are to be examined, understood and monitored more closely there is merit in conducting this study on a regular basis.