Two-thirds of college students in Scotland say they would be likely or very likely to apply for a student loan if those were available, according to a new report.

The research report, published by the government today, also said that over a quarter of all students reported that they were unsure about applying for a student loan and would require further information before deciding.

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Essential living costs

This comes as the same report shows that “a lot of” FE students experience a shortfall between their income and expenditure, and report “not being able to meet their essential living costs”.

“Most of the students who participated in the research were worried about their financial situation, with one in five very worried…In particular, mature students in their 30s and 40s and especially those who were parents were the most worried about their finances while studying.”

According to the report, most FE students are “highly dependent” on their families for financial support: “Those students unable to rely on family or friends, such as care-experienced students or those in the most deprived areas, are more likely to use commercial credit or payday loans.”

The research was carried out by SQW, which was appointed by the Scottish government to conduct research into the financial behaviour of FE students in Scotland and to explore the demand for and potential impact of student loans among this group.

The introduction of such loans was a recommendation of the government-commissioned independent review of FE and higher education (HE) student support, published in 2017.

“The purpose of the review was to assess the effectiveness of the support available and to make recommendations for beneficial change, with a focus on ensuring that the FE/HE system in Scotland was equitable, fair and supported all students throughout their learner journey.” 

According to the SQW research, which involved focus groups and a survey, to which over 2,300 FE students responded, there was a high level of general awareness about student loans among the FE student population.

“However, there was much less knowledge about the details of the model and there were some examples of misinformation from friends and family.”

Interest in access to a loan was highest among students who were parents and carers and had additional financial challenges, while the students least likely to apply for a student loan included “care-experienced students (who tended to be more debt averse) and students living in more affluent areas (who tended not to need additional finance).

Most students were in receipt of a bursary as well as other additional sources of income, says the report, with the most common additional sources of income used by students being support from friends or family, employment, savings and welfare benefits.

Crucially, “students found the college bursary system and application processes challenging”: “The timeframes and evidence requirements were difficult for students to meet and most felt unclear about their eligibility for financial support.”

NUS Scotland president Liam McCabe said: “As the report makes clear, it’s fundamentally unacceptable that students in Scotland are unable to meet their essential living costs. The Scottish government must now prioritise making further improvements to bursary support available to further education students which is in line with the real living wage.

“We look forward to a full response from the Scottish government to the report, setting out clearly how they intend to build a student support system that is fit for purpose and does not saddle some of our most vulnerable students with debt.”

FE minister Richard Lochhead said: “This research highlights that while some FE students would be open to accessing loans, there are other students who would have concerns about doing so. Indeed, NUS Scotland do not support the introduction of loans to the FE sector.”

“Given there would also be significant operational costs to introduce loans in FE, my focus will remain on ensuring that funding is firmly directed towards the most disadvantaged students. We have already improved support for FE students, including increasing the maximum bursary award to £4,500 per year from 2019-20, and introducing a fairer attendance policy, and the ‘bursary guarantee’ for students aged 18 and over.”