Student Finance and Wellbeing Study (SFWS) Scotland 2023-2024: research findings summary

Key findings

Tuition fees

Scotland’s system of student support differs to the rest of the UK. Eligible Scottish-domiciled further education (FE) and HN/undergraduate students have their tuition fees paid by the Scottish Government, either directly through their college or through the Student Awards Agency Scotland (SAAS).

Whilst the majority of HN/undergraduate and FE students who completed the survey for this study had their fees paid, more than half of postgraduate students (56%) were paying tuition fees (compared with 12% of HN/undergraduates and 7% of FE students). Higher proportions of older FE and HN/undergraduate students (25 and over), and HN/undergraduates who were part-time, paid fees.

Students paid for their fees in a number of ways, including using student and tuition fee loans, their savings, studentships, scholarships and securing support from independent funding bodies. Parents, partners/spouses and employers also paid tuition fees for some students.

Impact of paying tuition fees

FE and HN/undergraduate students who took part in the qualitative research spoke of their relief at having their fees paid by the Scottish Government, reporting that it made studying more affordable. Those paying HN/undergraduate and postgraduate fees themselves said that meeting the cost of their fees required careful budgeting and many took up paid employment to help with the cost. For some students, having to pay even a small proportion of their tuition fees had a considerable impact on their finances and contributed to financial stress, as well as student’s feelings on whether they could continue with their studies.

Among postgraduate students, while the tuition fee loan enabled some to continue studying, paying fees could be a source of worry as some Masters course fees were higher than the tuition fee loans available. Although additional debt was a worry for some students, it was nonetheless viewed as being necessary to further their education and career prospects. Postgraduate students in receipt of UKRI (UK Research and Innovation) studentships said that they would not have been able to afford to do their PhD (Doctor of Philosophy) without securing the funding, and that the studentship alleviated their worries about paying tuition fees and covering their living costs.

Student income and expenditure

Education-related income on its own was not enough to cover student expenses for all student groups in this study as shown in Table 1.

Note: For the purposes of this study, students from under-represented groups includes students who were parents, carers, estranged, care experienced and disabled.

Students’ total income was made up of multiple sources, including: student loans, bursaries/grants, discretionary funding, paid work, contributions from family and friends, commercial credit and social security benefits. The most common source of income for HN/undergradutes, postgraduates and students from under-represented groups was paid work (76%, 83% and 64% respectively). The most common source of income for FE students was bursaries and grants (64%).

The median total income from all sources for the 2023-2024 academic year was:

• £8,775 for FE students
• £14,160 for HN/undergraduate students (£13,210 for full-time students, and £17,260 for part-time students)
• £24,038 for postgraduate students, and
• £14,758 for students from under-represented groups.
• Across all student groups, the median total income increased by age and was higher for students living independently (renting or with a mortgage) compared with those living with parents.

When looking at expenditure, the highest category of spend for FE students was living costs (54% of total mean expenditure), while among HN/undergraduates, postgraduates and students from under-represented groups it was housing costs (54%, 49% and 51% respectively of total mean expenditure).

Student loans

Almost half (49%) of HN/undergraduates, 29% of those from under-represented groups, and 25% of postgraduates received income from student loans (Note: FE and PhD students are not eligible for 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 day to day costs, particularly for accommodation. However, student loans were also a source of worry, with students in both the survey and qualitative research expressing concern at the prospect of repaying their student loan debt. 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. Estranged, care experienced and low income students were particularly worried about student loan debt – a finding which has also been observed in other published research[i]. However, some students were able to rely on regular financial contributions from their parents and reduce student loan debt or avoid it entirely.

Bursaries

In contrast to England, bursaries and grants have been retained alongside student loans in Scotland. A wide selection of bursaries are offered to students, based on their circumstances, financial background or course of study.

Almost two-thirds (64%) of FE students, 55% of those from under-represented groups, 47% of postgraduates and 42% of HN/undergraduates received income from bursaries and grants.

Students in the qualitative research in receipt of bursaries highlighted the ways in which bursaries had impacted on their experiences. The positive impacts were greatest for those funded entirely through bursaries. Those receiving lower levels of non-repayable support (e.g., estranged students, and those receiving the Young Student Bursary and Independent Student Bursary) noted a mixed impact and a greater reliance on student loans alongside their bursary.

At FE level, the reduction in, or in some cases, removal of support from the FE Bursary and Education Maintenance Allowance, where attendance is a prerequisite, worsened the already precarious finances of vulnerable students. Some FE students in this study noted that they could not afford to travel to college. Others, including estranged students, highlighted mental health issues which prevented them from attending courses, which re-enforces the findings from a previous Scottish Government study[ii]. However, when looking at the wider literature, there remains a gap in the evidence on the financial experiences of FE students.

Discretionary funding

Around 1 in 10 FE students (9%) and students from under-represented groups (8%) and 1 in 20 HN/undergraduate (5%) and postgraduate (4%) students had received discretionary funding directly from their college or university in the academic year 2023-2024.

Median income received from discretionary funding was:

• £1,000 for FE students
• £700 for HN/undergraduate students, and
• £500 for students of all levels of study from under-represented groups[iii].

The majority of FE (83%), HN/undergraduate (91%), postgraduate (93%) and students from under-represented groups (86%) had not applied for discretionary funding. For between 25-40% of students, this was because they did not need discretionary funding.

However, between 20-29% of FE (29%) HN/undergraduate (24%), posgraduate (20%) and students from under-represented groups (26%) did not apply because they were unaware that discretionary funding was available.

The most common way students at all study levels found out about discretionary funding was through college or university student support communications. Students responding to the survey and the qualitative research emphasised the challenges associated with accessing discretionary funding. In addition to a lack of awareness, students mentioned the complexity of the application process and the sometimes intrusive nature of the evidence required.

Discretionary funding was viewed as an important source of income for students at all study levels who relied on it to fill in gaps in their finances to cover a range of costs including rent, tuition fees, travel to university or college, and other living costs, or during the summer break when loan and bursary instalments had completed. Being refused discretionary funding could have a negative impact on students both financially and emotionally. Without discretionary funding, some students said that they needed to take out commercial credit to pay for essential items which resulted in them going into debt or arrears.

Paid work

The majority of students undertook some form of paid work. Almost half (46%) of FE students responding to the survey 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 median number of hours worked in paid employment per week was:

• 22 hours per week for FE students
• 19 hours for HN/undergraduate students
• 27 hours for postgraduate students, and
• 20 hours for students from under-represented groups.

All student groups worked more than the recommended 10 to 15 hours of paid work per week recommended by Student Information Scotland[iv]. The most recent Student Income and Expenditure Survey research from England in 2021-2022 found that lower proportions of full-time HE students in England undertook paid work alongside their studies (58%)[v]. 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 Student Income and Expenditure Survey for Scotland in 2007-2008[vi].

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 student carers noted the challenges of combining paid work with their studies, as did those students whose courses had mandatory work placements, which reduced the time available for paid employment.

Adequacy of education-related income

In the survey, over 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 to cover study and living costs. The qualitative research found that even amongst those students receiving the highest levels of bursaries, this was often deemed insufficient to cover their financial needs. Similar findings have been highlighted by recent NUS Scotland surveys of students.

Student savings and borrowing

Savings

Across student groups, a higher proprotion of students reported having savings at the start of the academic year compared with the proportion who predicted they would have savings at the end of the year. FE students had the lowest proportions for predicted savings at the end of the year (19%), compared with students from under-represented groups (28%), HN/undergraduate students (42%) and postgraduate students (49%).

Some students in the qualitative research who said they did not have savings or were unable to save noted that this was a source of worry and contributed to the uncertainty they felt about the future.

Borrowing

As well as being the group least likley to have predicted savings at the end of the academic year, FE students also had the lowest level of borrowings (44%).

Over 6 in 10 of all other student groups had borrowings (68% of HN/undergraduates, 64% of students from under-represented groups, and 63% of postgraduate students). Older students from all student groups were more likely to have predicted borrowings at the end of the year, as were those living independently with the exception of postgraduates.

• For FE students the majority of their borrowing came from being in arrears on household bills.
• For HN/undergraduate students most of their reported borrowing was from student loans.
• For postgraduates and students from under-represented groups, commercial credit was the main source of borrowing.

Two fifths (41%) of postgraduates reported taking out commercial credit, compared with 34% of students from under-represented groups, 28% of HN/undergraduate students and 21% of FE students. This finding echoes those in NUS Scotland’s 2022 survey[vii] which found that 31% of students had accessed commercial credit. Students who took part in the qualitative research spoke of the challenges and stress associated with repaying high interest loans.

Large or unexpected expenses led some students to turn to borrowing. In the qualitative research, students spoke about using their overdrafts or commercial credit to pay for unexpected costs like boiler breakdowns, car servicing, and rental deposits. High interest rates and fees for missed payments attached to some commercial credit significantly impacted students’ ability to manage financially. Some expressed a clear aversion to borrowing, particularly care experienced and estranged students, who spoke of the lack of a financial safety net in the form of either savings or parental support.

Similar to other research[viii], the summer months were viewed by many students as a difficult period and a time when students had to find other means to cover their costs. 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 support payments had completed. As the research was conducted prior to the announcement that student support payments could be spread over 12 months rather than 10, it is not possible to know from this study how students felt about this option.

Net debt

Subtracting the amount of predicted borrowings from the amount of predicted savings for students (at the end of the academic year), provides a net debt figure.

A high proportion of all student groups were predicted to have net debt by the end of the year, with over 90% of students reporting this.

94% of HN/undergraduates, 95% of postgraduates, 90% of students from under-represented groups and 83% of FE students were predicted to have net debt by the end of the year.

For HN/undergraduates, 88% of part-time students and 96% of full-time students were predicted to have net debt.

Students from under-represented groups, older students and those living independently were more likely to have predicted net debt by the end of the academic year.

Median amount of net debt was:

• £900 for FE students
• £2,734 for HN/undergraduate students
• £4,500 for students from under-represented groups,and
• £9,000 for postgraduate students.

Experiences and impacts of financial difficulty on students

Overall, while the findings from the research show there were students who were managing financially, the data found that half or more of students reported that they had experienced financial difficulty (50% of postgraduates, 56% of HN/undergraduate, 61% of FE students and 66% of students from under-represented groups).

• The financial difficulties experienced by students, and the impacts reported varied. 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, between 36% (FE) and 59% (postgraduates), who reported financial difficulty, 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. Some students could not afford to heat their homes in winter.
• About one in six (15%) FE students, one in ten (11%) students from under-represented groups and one in twenty HN/undergraduate (6%) and postgraduate (5%) students said they had accessed support from foodbanks as a result of their financial difficulties. In contrast, 3% of individuals in the general adult population in the UK reported use of a foodbank in the previous 12 months in 2022/23[ix].
• These findings are similar to those from other student surveys[x] which outline a wide range of cost cutting behaviours taken by students in response to the increasing cost of living.

A key aim of this research was to explore the relationship between finances and students’ wellbeing. The findings show student wellbeing is heavily linked to 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’. When looking at other available data from 2021 and 2022, NUS Scotland student surveys have found that 69% of students indicated their mental health had suffered as a result of financial worries[xi], and the Student Money Survey reported in 2022 that 82% of students had concerns about making ends meet[xii]. Similarly, surveys of college and university students in Scotland by the Mental Health Foundation in partnership with Universities Scotland[xiii] and Colleges Scotland[xiv] found 74% of university students, and 64% of college students, reported low mental wellbeing.

Impact of study decision making

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.

Of those who said their decision making had been affected:

• Between 51% to 62% stated that they would not have studied if student funding had been unavailable, with postgraduates and students from under-represented groups more likely to say this (51% FE; 54% HN/undergraduate; 62% postgraduate; 60% students from under-represented groups).
• 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%).
• Between half and two-thirds of all student groups reported that financial difficulties had affected their studies ‘a great deal’ or ‘a fair amount’.
• 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%), and postgraduate students (37%).

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 with study and opportunities to socialise with others and participate in the wider student experience. Finances were also reported to play a role in students withdrawing from courses.

Students from under-represented groups

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[xv]. This also highlighted the challenges faced by students whose household incomes are such that they are not eligible for higher loans/bursary, due to financial support from parents/ legal guardians being unavailable or parents being unable to help support them financially. As the findings in this study 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.

Students’ views on suggested improvements to funding and support

In the follow-up qualitative research, participants were asked for their views on how students’ financial experiences could be improved in the future.

A range of suggestions were made by students which covered the following themes:

i. Increasing the overall income for students: by increasing government funding (particularly non-repayable forms of funding), introducing summer funding instalments, increasing access to benefits for students, and increasing funding for scholarships/ availability of scholarships.

ii. Improvements to support for specific groups of students: including postgraduate students; part-time students; estranged students; care experienced students; student carers; and student parents.

iii. Improvements to information and communication of sources of funding by enhancing:

a. the clarity and visibility of financial information, advice and guidance for students provided by the Scottish Government, SAAS, secondary schools, colleges and universities.

b. communication from SAAS, colleges and universities regarding the support students receive, their entitlements, payment schedule etc. to help them plan and manage their finances.

c. transparency of funding decisions and appeal processes to help students better understand how decisions have been made.

d. awareness of funding, including discretionary funding.

e. access to budgeting and debt management support.

iv. Improvements to the administration of funding: by offering further support to assist students with finance applications (e.g. bursaries, student loans, discretionary funding) to ensure they are correctly completed; reducing the frequency of how often students have to provide evidence for discretionary funding applications if their circumstances have not changed.

v. Improved support with food, travel and accommodation: by increasing the number of colleges and universities offering free meals to students whilst on campus; expanding free bus travel to all students regardless of age; reducing short-term let holiday properties in student towns to increase the availability of accommodation; and increasing offers of free or reduced cost university-owned accommodation.