Student funding in further education

Research into the financial behaviour of further education students in Scotland, exploring demand for and potential impact of student loans amongst this group.

1. Introduction

1.1 SQW has been appointed by the Scottish Government, in response to the findings from an independent review of student support, to conduct research into the financial behaviour of Further Education (FE) students in Scotland and to explore the demand for and potential impact of student loans amongst this group. The study was carried out between October and December 2018. This document reports on the findings from this work.


1.2 There were six main stages involved in the study:

  • Inception meeting – to confirm the context, aims and objectives of the research and approach to engaging key stakeholders
  • Desk review – of background policy and research relating to FE student finance
  • Research design – the research tools were informed by the desk review and shared with the Scottish Government for review and sign off in advance of data collection
  • Focus groups – 18 qualitative focus groups were carried out in colleges across Scotland, engaging a total of 169 students
  • Online survey – 2,300 college students responded to an online survey which captured quantitative data on their demographic profile, financial behaviour and views on student loans
  • Analysis and reporting – the final stage involved collating the data from the focus groups and the survey, identifying the key messages from this and reporting.

Research Questions

1.3 The research questions for the study were as follows:

  • What are the general attitudes to debt and taking out loans between the different equality groups, including knowledge of different types of loans (commercial and student)?
  • In general, are there specific groups more or less likely to take out commercial credit (bank overdrafts and/or credit cards) and/or "payday" style loans (i.e. those that are easy access and high interest)?
  • How would the introduction of FE loans impact on different groups of students? Exploring any differences by: age (including those over aged 24); disability; race; religion or belief; gender; sexual orientation; SIMD (particularly areas of deprivation) and mode of study (i.e. part-time or full-time).
  • Would FE loans make a difference to: (1) those in financial difficulty; and (2) those who have withdrawn from FE? (if it is feasible to explore the latter group.)
  • Are FE students taking out other forms of loans, such as commercial credit or "payday" loans, in the absence of a loan from the Student Awards Agency for Scotland (SAAS)?
  • If FE students had access to a SAAS loan, would it stop them taking out commercial credit or a "payday" loan? Or would they be likely to take on both loans (increasing debt)?
  • Do Higher Education (HE) students (who have access to SAAS loans) still go on to take out commercial credit and/or "payday" loans?
  • Is there demand from FE students to access student loans (based on evidence from the research participants)?

Document structure

1.4 This remainder of this document is structured as follows:

  • Chapter 2 provides an overview of the policy context for the study and the existing evidence base relating to FE student finance
  • Chapter 3 details the methodology and approach taken to delivering the research, including the profile of research participants
  • Chapter 4 provides an overview of the feedback received from research participants in relation to student loans
  • Chapter 5 looks at the main sources of financial support currently being accessed by FE students
  • Chapter 6 reports on the key findings in relation tothefinancial profile of FE students
  • Chapter 7 provides summary conclusions.



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