39. In December 2000 the DfEE published a major
survey it had commissioned on student finances.
The survey considered the income, expenditure, savings and debt
of students attending UK higher education institutions. The impact
of the abolition of maintenance grants and their replacement with
student loans could not be assessed because fieldwork for the
research was conducted before this change took place. The Changing
Student Finances survey found that students in 1998/99 had
more money at their disposal in real terms than in 1988/89, although
much more of this was borrowed or earned.
One in five students whose parents were assessed to make a contribution
towards tuition fees received less than the assessed amount (the
average shortfall was £579).
The 1999 NUS Student Hardship Survey found that such "students
tended to finance fees through funds intended exclusively for
maintenance provision (i.e. student loan or maintenance grant)".
The mean income including grants and student loans and other commercial
loans of full-time students was £5,892
and their mean expenditure was £5,710.
Average expenditure on essentials, including accommodation, food,
course-related expenditure and spending on children, all fell
in real terms between 1995/96 and 1998/99.
The survey found that there were practically no differences between
full-time students and under-30 year olds in the general population
in terms of the proportion of total expenditure devoted to entertainment.
40. The 1999 NUS survey found that the average maintenance
package for a student living away from home (outside London) was
£3549 per year, average accommodation costs were £44.98
per week, leaving the student with £23.10 per week to pay
for bills, food, clothes, books and travel. In the same year the
Jobseeker's Allowance paid £39.85 per week, in addition to
providing housing benefit.
41. In January 2001 MORI published a report sponsored
by UNITE on aspects of student life. The Student Living
survey found that students' current debt levels were, on average,
£3,326, and students predicted this figure would rise to
£7,026 by the end of their studies. Students living at home
predicted total end of course debt of £5,928. Social class
appeared to make no significant difference to students' current
debt levels, but students from social classes A and B anticipated
end of course debts levels £1,000 less than students from
social classes C1, C2, D and E. Similarly, privately educated
students anticipated lower overall levels of debt than their counterparts
from state-funded schools.
MORI found that the proportions of students worried about debt
and of those not worried about the level of debt they would incur
was the same at 36 per cent. Students expressing most concern
were from social groups C1, C2, D and E and those undertaking
sub-degree courses. Students who attended state-funded schools
were more likely to be worried about debts (39 per cent) than
students educated at private schools (23 per cent).
42. This perception of debt appears to have a more
significant impact on those from poorer socio-economic backgrounds.
Baroness Blackstone argued:
"I think students have
always had these perceptions and they have always felt that they
have to manage on a relatively small amount of money. It is true
and it has always been true, but the whole point of the student
support scheme is to provide students with enough to live on during
the period in which they are students ... I know of no evidence
to suggest that more students have dropped out as a result of
the changes in the student support system that we have introduced".
Universities UK told us perceptions of debt are critical
to students' decisions to enter and remain in higher education.
This may be particularly so for students from poorer backgrounds
and those without a tradition of higher education in their families.
Following the Sub-committee's visit to Manchester, Ms Samantha
McCormick informed the Sub-committee of a summary of research
she had done examining the needs of students from non-traditional
DfEE Changing Student Finances survey states the main reason
given for not taking out a loan, other than not needing the extra
money, was debt aversion, found particularly among the lowest
social classes and women.
43. A number of witnesses commented on the impact
of students' financial situation. Professor Claire Callender,
one of the authors of the Changing Student Finances survey,
said that there were certain groups of students who experienced
very severe financial hardship.
The survey found that one in ten of both full- and part-time students
had thought about dropping out for financial reasons.
Professor Mantz Yorke agreed that the abolition of the student
grant would make it more likely that students from lower socio-economic
groups would cite financial reasons as the cause of non-completion.
Sir Howard Newby argued that there are some students who suffer
financial hardship as they lack parental or other forms of financial
support, but others had high levels of debt because they were
supporting a certain lifestyle.
44. Professor Diana Green told the Sub-committee
that the number of student exclusions for debt from her university
had increased by 17 per cent between 1997 and 1999.
Professor Peter Knight, Vice-Chancellor of the University of Central
England, told the HEFCE 2001 annual meeting that he estimated
that several thousand students were not completing their higher
education courses because they could not pay their fees. The basis
for this estimate needs to be confirmed. A total of 197 students
had been excluded from his university last year.
45. Students who withdraw or consider doing so frequently
cite the influence of financial difficulties. The NUS Student
Hardship Survey (1999) showed that a third of full-time undergraduates
had considered dropping out of studies at least occasionally.
Over 34 per cent of these students cited financial difficulties
as a major factor.
The Coalition of Modern Universities told us "there is no
doubt that financial problems concern many students. They may
be the direct cause of withdrawal or they may be a contributory
factor in a complex set of issues. In one university, a small
scale survey showed that 72 per cent of those giving reasons for
withdrawal in 1999/2000 referred to financial difficulties, compared
with 45 per cent in 1996/7".
The Association of University Teachers said that in their view
"student poverty has a direct and sometimes decisive impact
on student learning. Indeed, this is currently by far the most
common source of the concerns expressed by our members. They increasingly
comment on the difficulties experienced by students who are forced
to work long hours in part time jobs during term time in order
to make ends meet ¼
there may be a number of reasons for the recent increase in non-completion
rates in higher education, but almost every lecturer seems to
know of individual examples of students failing to complete courses
for financial reasons".
46. During the Sub-committee's visit to Manchester,
welfare officers said that the biggest non-completion rate that
they saw was from stress mainly due to financial pressure. The
DfEE student income and expenditure survey also highlighted financial
difficulties as having been cited most often by all students who
have considered dropping out.
Mr Bahram Bekhradnia, HEFCE's Director of Policy, told the Education
Sub-committee that on the basis of HEFCE analyses, non-completion
could be accounted for to a large extent by reference to academic
factors, with financial support perhaps a second order consideration.
However, HEFCE suggested that on the basis of socio-economic data
alone, non-continuation was a far greater problem for students
from poorer backgrounds (see Table 2). HEFCE concluded tentatively
that non-completion was "substantially and predominantly"
associated with academic factors, although financial concerns
may also play a part.
However, the DfEE Student Income and Expenditure Survey highlighted
the financial difficulties as a key motivation for those students
considering withdrawing: "financial reasons were cited most
often by all students".
47. MORI found that 30 per cent of students
had worked part-time in paid employment during their studies.
The majority of those students who had worked thought this had
an adverse effect on their academic studies.
The Changing Student Finances survey found that 46 per
cent of all students had jobs during term time, working an
average of 11 hours a week.
In this survey 10 per cent of full-time and more than 25 per cent
of part-time students believed that working had beneficial effects
because of its relevance to their studies.
The survey also found that since 1995/96, the number of hours
worked by students from social classes I and II decreased by 9
per cent, but increased by 15 per cent among students from social
classes IV and V.
The National Union of Students told the Sub-committee that it
recognised the need to work during termtime, but recommended
a limit of 1012 hours per week.
They argued that pressure from term-time work often led to an
inability to fulfil academic commitments, which in turn contributed
to students' decisions to withdraw from their studies.
Universities UK has commissioned research into the impact of term-time
work on students' learning, considering both benefits and adverse
The current system can pressurize students to work during the
most testing year of their academic studies.
48. The Student Retention Project at Napier University
found twenty student characteristics that had some influence on
students' decisions on continuing their higher education after
the first year of study. The most successful students were working
in paid employment for up to 10 hours per week, the least successful
over 16 hours a week.
Skill: the National Bureau for Students with Disabilities, noted
that many disabled students are unable to work during term-time
because of their impairment or because the current employment
environment excludes them.
Mrs Ann Barlow, the Learning Support Co-ordinator at Manchester
Metropolitan University, told the Sub-committee that many disabled
students faced considerable delays and uncertainty in receiving
financial support from the Disabled Students Allowance. This was
because most local education authorities did not arrange the assessment
of disabled students' needs until after enrolment. Consequently,
this support was not available until the course was well under
49. We recommend that higher education institutions
should provide guidance to their students that they should not
work in paid employment for more than 12 hours a week during term
However, the Committee recognises that seeking to reduce non-completion
by preventing students from working longer hours, if they are
doing so in order to fund their living costs, may be self-defeating
unless access to financial support for less well off students
45 HEFCE, Undergraduate non-completion in higher
education in England, 1997. Executive summary, paragraph 6. Back
paragraph 10. Back
Yorke, Leaving early: undergraduate non-completion in higher
education, 1999, p. 39. Back
Student Living Report, UNITE, 2001, p. 8. Back
Student Living Report, UNITE, 2001, p. 9. Back
for example, Ms Dorma Urwin Q. 67, Mr John Randall Q. 121, and
Sir Howard Newby Q. 168. See also Ev.p.35, paragraph 20. Back
example, Professor Mantz Yorke Q. 30, Professor Michael Wright
Q. 69, Mr John Randall Q. 122, Professor Geoffrey Copland Q. 232. Back
15, paragraph 6. Back
Changing Student Finances: Income, expenditure and the take-up
of student loans among full and part-time higher education students
in 1998/9, 2000. Cited hereafter as Changing Student Finances. Back
Student Finances, paragraph
Student Finances, p. xv. Back
67 Ev.p.93. Back
Student Finances, page xiii. Back
Student Finances, page xiv. Back
Student Finances, page xiv. Back
Student Finances, page xv. Back
Union of Students, Student Hardship Survey, 1999, p.5. Back
Student Living Report, UNITE, 2001, p. 15. Back
Student Living Report, UNITE, 2001, p. 17. Back
Student Finances, p. xix. Back
Student Finances, page xvii. Back
Guardian, 30 January 2001. Back
Union of Students, Student Hardship Survey, 1999. Back
23, paragraph 5. Back
Student Finances, p. 275. Back
444. See also HEFCE, Undergraduate noncompletion in higher
education in England, 1997, page 54. Back
paragraph 15. Back
Student Finances, p. 275. Back
MORI Student Living Report, UNITE, 2001, p. 14. Back
Student Finances, paragraph
Student Finances, p. xxiii. Back
Student Finances, paragraph
paragraph 21. Back
97 Ev.p.94. Back
13, paragraph 11. Back
20, paragraph 2.5. Back
26, paragraph 2.1. Back
Appendix 34, paragraph 4. Back
paragraph 47 above. Back