Student Finance and Wellbeing Study Scotland 2023/24: literature review

7. Student choices and student support

To fund their studies and support their living costs, students may draw upon a wide range of different sources of income. Although students in Scotland do not pay fees, they must still fund their living costs, and many students do so through taking out student loans for living costs, as well as applying for bursaries, and additional discretionary funding directly from the college or university where they are studying.

The House of Commons Library (Bolton, 2023) found that average loan debt for Scottish students entering repayment in 2021-22 was £15,400; however, for some students the amount will be considerably higher. For eligible young students who take out the highest level of maintenance loan every year of a four-year degree, their total debt would be £28,000, while an independent student could accrue total debt of £32,000 over the course of a 4-year degree. Blackburn’s analysis of the distribution of student loan debt, using Student Loan Company data (2023), found student loan borrowing in Scotland was skewed towards those from lower incomes, with the likelihood of students taking out student loan debt reducing as family income rises. Interest rates on student loans in Scotland have risen in recent years, increasing from 1.5% in 2021-2022 to 6.25% in 2023-24 (Student Loans Company, 2023); this compares with 7.3% in England in November 2023 (Bolton, 2023). This may mean it takes graduates longer to repay their loans in full.

Research has shown that young people, particularly those from low-income families, may be more debt averse and express concern about taking on student loan debt. Much of this research has been focused on the English HE system, exploring how the introduction of tuition fee loans has impacted on students’ decision-making. The link between attitudes to student loan debt and HE participation has been less explored in Scotland, where, overall, levels of student loan debt are lower as a result of tuition fees being funded by the Scottish Government. However, young people’s attitudes to, or fear of, debt have been found to shape their HE choices even in the context of government-funded tuition. The young people from low income backgrounds interviewed as part of Minty’s research (2015; 2021) were highly debt averse, with some choosing to study locally and work during term-time rather than take out student loans. More broadly, Minty’s research with Scottish school leavers and current students found participants had a limited understanding of the funding available in Scotland, for example, often confusing loan repayment options with those that apply in England. Combined with the influence of debt averse parents, misunderstandings of student loan terms and conditions led some to refuse student loans and struggle on without.

Living at home is one option available to students, and Scotland has higher proportions of commuter students than elsewhere in the UK (Donnelly and Gamsu, 2018). Living in the parental home while studying allows students to reduce their costs while also accessing existing local employment and retaining links with family and friends (Minty, 2021; Christie, 2007).