DEPARTMENT FOR INNOVATION, UNIVERSITIES AND SKILLS News Release (046) issued by COI News Distribution Service on 21 April 2009
The latest survey outlining students' income, spending and saving has been published today by the Department for Innovation, Universities and Skills.
This survey looks at students' financial situations under both the new and old financial support systems, and compares these with the previous survey (2004/05).
For first year full time students the survey showed that:
* The average expenditure of undergraduate students in their first year of study has increased by 12 per cent since 2004/05.
* This was driven by an increase of 68 per cent in the cost of participating in Higher Education - mainly due to the introduction of variable fees in 2006.
* More than 80 per cent of students consider the long term benefits of higher education outweigh the costs and that they will ultimately earn more as a result.
* Students' incomes increased in line with this - up by 15 per cent since 2004/05 due to the new student support package, including the tuition fee loan.
* Increased financial support means that students are relying less on family and paid work for income.
* First year students are less likely to combine work with their studies; the proportion working during term time dropped from 58 per cent to 49 per cent.
* In a change from the previous survey, average student income is similar across all social groups.
* Students in their first year receiving the new support are expected to finish for the summer with a net debt of £3,500. This compares with an average student debt of £7,800 for those completing their courses in 2007/08.
David Lammy, Minister of State for Higher Education, said:
"Higher education remains one of the best pathways to a rewarding career, and it is good to see that students recognise it as a good investment for their future, a fact also seen in the record numbers of applications to university."
"This Government continues to invest more than ever in higher education and we firmly believe that finance should never be a barrier to good education. This is why we continue to make generous loans and grants available to students, and universities themselves provide bursaries to students who have genuine need of them.
"Today's survey shows that the overwhelming majority of students from all backgrounds still consider the benefits of higher education to outweigh the costs. In an increasingly competitive world, we also know that employers are aware of the range of skills that graduates can bring to their businesses."
Since the previous student survey, carried out in 2004/05, new levels of student support have been introduced. For 2009/10 this includes:
- maintenance grants of up to £2,906, which are targeted at students from lower income backgrounds;
- tuition fee loans of up to £3,225, meaning students no longer have to pay their fees up-front;
- These loans do not have to be repaid until students have left university and have an annual salary in excess of £15,000; and
- All those students receiving a maximum grant could also receive a bursary from their university. This was typically £800 in 2008/09.
Claire Johnson, Principal Research Fellow at the Institute for Employment Studies and one of the report authors, said:
"Student income has risen overall, although the majority of the increase is driven by income from tuition fee loans, which are paid directly to the students' institutions.
"Government grants and loans are playing a more important role for students studying under the new financial support system. If we compare first year students in 2007-08 with first years in 2004-05, we see that they are more reliant on these sources and less reliant on financial support from their parents or income from paid work."
Government funding for higher education has risen for 2009/10, with funding for 30,000 more students than in 2007/08. There have also been efforts to help both businesses and individuals during the downturn, with more than 70 universities and colleges investing £27 million in extra courses and internships across the country.
Notes to Editors:
1. A full copy of the Student Income and Expenditure Survey (SIES) can be found at: http://www. dius.gov.uk/research_and_analysis/research_reports
2. The survey is carried out every two to three years.
3. The 2007/08 survey was jointly commissioned by the Department for Innovation, Universities and Skills (DIUS) and the Welsh Assembly Government (WAG).
4. It was conducted in partnership by the National Centre for Social Research (NatCen) and the Institute for Employment Studies (IES), and presents the findings for students from England. A separate report covers students from Wales (whose income and expenditure patterns are very similar).
5. The Institute for Employment Studies is the UK's leading independent centre for research and evidence-based consultancy in the employment and HR fields. Established in 1969, a series of themed events to mark its 40th anniversary started in April 2008. Visit http://www.employment-studies.co.uk. For further information, contact Keir Bosley at CHA on 020 7622 8252 or firstname.lastname@example.org.
6. The National Centre for Social Research (NatCen) is the UK's largest independent social research institute, non-profit making and with charitable trust status.
7. The 2007/08 survey covers both full-time and part-time students at higher education institutions (HEI) and further education colleges (FEC), including the Open University (OU), participating in undergraduate courses during the 2007/08 academic year.
8. Data were collected between January and March 2008 via face to face interviews with a randomly selected sample of 2,686 full-time and part-time English-domiciled students at 80 institutions in England and Wales. Students also completed a 7 day expenditure diary.
9. 'Net debt' is the sum of outstanding student loan and other borrowing (e.g. overdrafts, commercial credit, informal loans), less savings.