Scottish Government

2. HIGHER EDUCATION STUDENTS' INCOME

Introduction

2.1 This chapter reports details of the income of the higher education student sample from the main survey. As with the following chapters on HE students' expenditure and debt, the data in this chapter is disaggregated by part-time ( PT) and full-time ( FT) students, with the latter also distinguishing between FTHE sub-degree and FTHE degree where such distinction is illuminating. The data for these two levels of students are then combined to provide FTHE Combined figures. In cases where there is no important difference between sub-degree and degree students, we have simply reported on the combined figure for FTHE.

2.2 Where appropriate, this chapter also contains quotes from FTHE students. This material is drawn from the interviews that featured as Stage 3 of this project. It should be noted that this material is not meant to be representative of all students, as it is drawn from a sample of students from working class backgrounds only. It is included for illustrative purposes only.

2.3 The chapter focuses on the various sources of income of students, such as student loans, parental support and employment and examines the ways in which sources and levels of income vary among the sample according to factors such as level of study, social class and residential status. Savings are discussed in the chapter on debt.

2.4 Before presenting the results of the analysis, it is necessary to clarify some key terms and justify some of the approaches taken.

• First, the data presented is only for academic term-time, unless otherwise stated. As term lengths differ across institutions and courses, the most common length of term of 36 weeks was used (see Technical Appendix). The survey allowed students to give answers in weeks, months or years (in order to maximise the response rate), and these figures were then annualised on the basis of 36 weeks or 9 months.
• Second, the following levels of study were used in the analysis: full-time higher education degree only, full-time higher education sub-degree, part-time higher education, full-time further education and, for some variables, all full-time higher education. In general, the HE evidence is presented together for each table, except where otherwise stated. The information on full-time further education students is analysed separately in Chapter 5 due to the distinct differences between these students and HE students.
• Third, although we have information regarding the nature of the institutions attended by our survey respondents undertaking higher education courses, we make no distinction in the analysis between those taking higher education courses at college and university since their method of funding is the same. Students attending FE colleges and following non-advanced courses are analysed separately as explained above.
• Fourth, in most cases the means are calculated across all students ( i.e. the average of all students regardless of whether each student had a particular source of income or engaged in a particular form of expenditure). The exceptions to this approach are: where we present average figures for students loans calculated from information for those students who actually take a student loan; where we present information for child-related income and expenditure which is calculated only for those students who have dependent children; where we present information for those in receipt of benefits and where we present information on disability related income and expenditure which is calculated only for those students in receipt of disability related income. ⁵⁵
• Fifth, where students live in households which share income and expenditure they are asked for information on their own contribution to costs and their own sources of income. The information presented here reflects this.
• Sixth, the variables' names are largely self-explanatory but the precise definition of each variable can be found in the Technical Appendix (D).

HE Students' Income

2.5 The first set of tables provides headline income figures for each of the four types of students (except, as stated above, where there is no important difference between sub-degree and degree): FTHE sub-degree, FTHE degree, FEHE Combined and PTHE. They provide figures on total income and the main sources of this income.

Table 2.1: Total and main sources of income by level of study

Notes: * Unless they are unemployed or have low income, part-time students do not qualify for loans from the Student Loans Company and tend to rely on commercial sources.

**Bursaries relate mainly to non-repayable sums made to students from low income families while grants can be made by a range of charitable bodies.

*** Throughout the report, 'other' is used in the tables to represent all other sources of income, expenditure or debt not contained within the sources listed. For example, in this table, 'other' can include income derived from benefits. Full details of the types of income, expenditure and debt sources can be found in Technical Appendix D.

Table 2.2: Total and main sources of income ( FTHE Sub-degree)

Table 2.3: Total and main sources of income ( FTHE Degree only)

Table 2.4: Total and main sources of income ( FTHE Combined)

Table 2.5: Total and main sources of income ( PTHE)

2.6 The above tables reveal that the mean total income for FTHE Combined students is £5166 and PTHE students £12,057. In the case of full-time students, sub-degree students have a slightly higher total income than degree only students (£5483 versus £5076). Comparing full-time and part-time students, part-timers generally have a level of income that is much higher than that of full-timers, more than double, but this finding should not be unexpected given that full-time students are more likely to have part-time work and part-time students more likely to have full-time work.

2.7 In terms of main sources of income this expectation is borne out in the tables. By far most income for part-time students is derived from paid employment (just over 80%). By contrast, although still an extremely important source of income, term-time paid employment provides under 40% of FTHE students' (Combined) income. It should also be noted that those who take out a student loan are just as likely to report earnings from employment as those who fail to take out loans.

2.8 The student loan provides an important, other source of income for FTHE students, whether sub-degree or degree only: 27-28% for both, similarly for FTHE Combined students.

2.9 Other education related income sources though are more important for FTHE students. As the combined FTHE figures highlight, this source of income comprises nearly 15% of these students' total income compared to just 1% for PTHE students.

2.10 Informal contributions to income are also more important for FTHE students. As the combined FTHE figures highlight, such contributions (to living and housing) comprise 8% of total income compared to 1.6% for PTHE students.

Table 2.6: Total income by student characteristics and level of study

2.11 Table 2.6 analyses the total income of HE students across a range of personal characteristics: sex, age, social class, and whether or not these students: had a family member who had studied at university; had dependent children; lived with their parents - and identifies some important variations in income by such characteristics.

2.12 Generally, mean term-time income varies very little by sex, but varies widely by mode of study. Part-time HE students in particular have much larger incomes due mainly to the fact that some will be combining full-time jobs and study. The average term-time income for full-time HE male students is £5142 and £5186 for women. For part-time students the corresponding figures are £13,355 for men and £11,155 for women. There is also a considerable variation between the age groups with average income rising with age. Among the full-time HE students, those below the age of 20 had a mean income of £4524 while those over 25 had a mean income of £8096. The difference between full-time and part-time students also rises steeply with age. The difference in mean income between full-time HE and part-time HE in the 16-20 age group is only £1208 while the corresponding difference for those over 25 is £4057.

2.13 In terms of social class - proxied here by the SOC (2000) classification ⁵⁹ - we find a mixed income outcome. Overall, for full-timers, working class students earn slightly more, though sub-degree students from working class backgrounds earn slightly less. Part-time working class students also earn slightly less. The combined FTHE result is somewhat surprising given that other studies have found that middle class students enjoy a superior income. One possibility is that working class students work long hours in term-time to support their studies. The data supports this view in that across all FT students the level of term-time earnings is higher for working class students than it is for middle class students.

2.14 Amongst full-time HE students those who had a family member with a degree earn slightly more. For part-time HE students there is a slight increase in income for those with family experience of higher education. There is a large difference between the mean incomes of students across all levels of study who have dependent children and those who do not. This variable is, of course, related to age which is another factor associated with higher incomes.

2.15 In terms of accommodation status, those living with parents have lower average income than those not living with parents. In the case of part-time HE students this difference is substantial. Again, accommodation status is linked to age, with older students more likely not to be living with parents. What this difference may hide is the position of those younger students who, for whatever reason, are not living with their parents and are incurring higher expenditures for living expenses as a result. Such differences are unsurprising given that students who live at home tend to receive benefits in kind (such as free or subsidised food and accommodation) rather than large cash allowances.

Table 2.7: Total and main sources of income by sex ( FTHE Combined)

Table 2.8: Total and main sources of income by sex ( PTHE)

2.16 Tables 2.7 and 2.8 show the mean and median income from a variety of sources for full-time and part-time students respectively. For both full-time and part-time students term-time earnings represented the highest source of income. For full-time students term-time earnings represented almost 40% of total income, while the student loan represented less than 30% of total income. Overall, student income varies little by sex, and income from all sources is very similar for males and females.

2.17 Overall, student income shows very little variation by sex, and income from all sources is very similar for males and females - the exceptions being that part-time males have higher term-time earnings and part-time females higher income from benefits. For part-time students, term-time earnings represented by far the largest source of income: 86% for males and 79% for females. Overall, the income of female part-time students was lower than for males.

Table 2.9: Total and main sources of income by age ( FTHE Combined)

Table 2.10: Total and main sources of income by age ( PTHE)

2.18 Tables 2.9 and 2.10 describe sources of income by age group. For FTHE students, the student loan increases with age as do term-time earnings and benefits. For PT students, the amount of student loan falls with age but term-time earnings rise much more sharply with age as do benefits. For both FT and PT students the other components of income are much smaller and do not change in a consistent pattern with age.

Table 2.11: Total and main sources of income by social class ( FTHE Combined)

Table 2.12: Total and main sources of income by social class ( PTHE)

2.19 Overall, full-time students from working class families have a higher total income, while among the part-time students the position is reversed (Table 2.11 and 2.12). Full-time working class students receive more in student loans, have slightly higher term-time earnings and receive more in grants and benefits as compared with their middle class counterparts. They have smaller housing and living contributions from family and other income.

2.20 For part-time students, working class students do have higher loans and less other income, housing contribution and living contribution, but they have lower term-time earnings and also lower benefits.

Table 2.13: Total and main sources of income by whether a family member attended HE ( FTHE Combined)

2.21 Over 60% of FTHE students in the sample are not the only member of their family to have studied at university (Table 2.13). Those students who are the only member of their family to have attended university take out higher student loans, earn more during term-time, and have higher benefits, higher grants and higher overall income . Those students who have family members who have studied at university have greater informal contributions to both housing and living costs and higher other income.

Table 2.14: Total and main sources of income by whether a family member attended HE ( PTHE)

2.22 Almost half of all part-time HE students come from a family where other members have studied at university (Table 2.14). Those students who do not have another family member who attended university take out higher student loans, have higher benefits, lower term-time earnings, higher grants and lower other income than those with a family member who has attended university.

Table 2.15: Total and main sources of income by dependent children ( FTHE Combined) ⁶⁰

Table 2.16: Total and main sources of income by dependent children ( PTHE)

2.23 Full-time students with dependent children have lower term-time earnings than those with no such responsibilities (as might be expected) but have higher student loans, grants, benefits and other income (Table 2.15). Overall, they have almost double the total income of those with no dependent children.

2.24 Part-time students with dependent children also have higher total income than students who do not have dependent children (Table 2.16). In this case however, the difference is mainly made up by income from term-time paid employment and benefits.

Table 2.17: Income Total and main sources of income by accommodation status ( FTHE Combined)

Table 2.18: Total and main sources of income by accommodation status ( PTHE)

2.25 Student income varies strongly by residential status, with relatively low income received by those who live with their parents as well as those who live independently in a flat owned by their parents. Relatively high overall income was enjoyed by those who own their own accommodation, live with their partner and who live with their children. Amongst full-timers, students who live on their own in rented accommodation also have relatively high income. (Table 2.17 and 2.18).

1. Student loan uptake amongst full-timers varies substantially with accommodation status: varying from an average for those who live with their parents of £904 to £3140 for those who live with their children. Those living in shared accommodation with others receive the highest amounts of informal contribution to their housing and living costs, with those living with their parents receiving the lowest (although the figure for this group of students is likely to be underestimated since the contribution is less likely to be in cash). Term-time earnings also varies greatly with accommodation status, with those living in halls of residence (likely to be first years) earning the least and those living on their own (in their own or rented properties) earning the most. Grants and benefits are also higher for those living on their own or with children. Average total income varies little between all categories except those who live on their own, those who live with children and those who live with their partner.
2. As noted earlier, student loan uptake/eligibility is very low and the highest amount shown in Table 2.18 is £988 for students living in Halls of Residence. However, this is a very small sub-sample (9) and should be treated with caution. Term-time earnings are the largest component of income for all PTHE students regardless of accommodation status. In the case of the typical PTHE student, i.e. one not living with parents, it accounts for 82% of income. Benefits are a significant source of income for those living in rented accommodation on their own (35%) and for those living with children (24%). Informal housing and living contributions are small for all PTHE students.

Table 2.19: Total and main sources of income by year of study ( FTHE Combined)

Table 2.20: Total and main sources of income by year of study ( PTHE)

2.28 For full-time students income rises throughout their period of study until the final year when it dips slightly (Table 2.19). This pattern is reflected in all the main sources of income: student loan, term-time earnings, grants and benefits. Part-time students have a different pattern in that, not surprisingly, their income (dominated by earnings) rises throughout the period as does student loan and grants (Table 2.20). Other sources of income do not show a consistent pattern with respect to year of study.

Table 2.21: Total and main sources of income by final year of study ( FTHE Combined)

Table 2.22: Total and main sources of income by final year of study ( PTHE)

2.29 As courses vary in length, Table 2.21 and 2.22 focus on the income of those in their final year compared to those in earlier years of their courses. The differences are slight for both full-time and part-time students. Part-time students show a slight dip in income but the very diverse patterns of study make this difficult to interpret.

Table 2.23: Main sources of students' support by level of study⁶¹

2.30 When earnings and income from other sources are discounted, student loans make up the overwhelming bulk of student support for full-time HE students, with Young Students Bursary being the second most important source of study related income (Table 2.23). Part-time students derive higher levels of income from employer contributions and from disabled student's allowance (disability can often be the reason why some students choose to study part-time via the Open University). Sub-degree students ( e.g.HND, HNC) are also declaring higher levels of disabled student allowance relative to Degree only students.

Table 2.24: Total and main sources of income by student loan ( FTHE Combined)

Table 2.25: Total and main sources of income by student loan ( PTHE)

2.31 Around three-quarters of full-time HE students have taken out a student loan, with the average amount being around £2000 (in the academic year 2007-08) (Table 2.24). For those who had not taken out a student loan the average income was less than that for recipients of student loans by approximately £2000. However, this masks a higher average term-time earnings, lower other grants, and lower benefits. Nevertheless, it should be noted that even among students who took out loans, their term-time earnings represented a sum which closely resembled that taken as a loan.

2.32 Just over 9% of the part-time HE students in our survey took out a loan which is substantially lower than their full-time counterparts. The obvious reason is that part-time HE students tend to be ineligible for loans from the Student Loans Company unless the students are unemployed or have low incomes (see Chapter 1). The mean term-time earnings for those who did take a loan were £2660 as opposed to £10636 for those who did not. Those who did not take a loan also had average benefits of £1223. It should be noted that the maximum student loan available to part-time students was £500. In addition, only those students who were unemployed or from low-income households were eligible for this loan.

Table 2.26: Characteristics of those who did not take out a student loan by level of study

2.33 For full-time sub-degree students, the characteristics of those more likely than not to take a student loan are: females, students aged 16-20, those defined as working class, those with no family experience of university, those with no dependent children, and those living with parents (Table 2.26). For degree students, the pattern is the same except that middle class students are more likely than working class students not to take a loan and those with no family experience of university are nearly twice as likely not to take a student loan.

Table 2.27: Total and main sources of income by education related grants and bursaries ( FTHE Combined)

Table 2.28: Total and main sources of income by education related grants and bursaries ( PTHE)

2.34 Full-time students in receipt of grants have higher total income compared to those not receiving grants by a considerable degree (£6025 as opposed to £4310) (Table 2.27). They have higher levels of student loan, lower term-time earnings and lower other income. They also report slightly lower contributions from family towards housing and living costs. With many of the grants that are available targeting students with dependent children in particular, it is likely that the above describes mature students with children.

2.35 Part-time students in receipt of grants and bursaries also have considerably lower total income (less than 70%) than those not in receipt of grants (Table 2.28). They have lower term-time earnings (around 45% of the earnings for those not in receipt of grants), higher student loan and higher benefits. Interestingly they also have higher levels of housing and living contributions but the difference if not great.

Table 2.29: Total and main sources of income by government benefits ( FTHE Combined)

Table 2.30: Total and main sources of income by government benefits ( PTHE)

2.36 Full-time students in receipt of benefits form only 3.7% of all FTHE students in our survey. The actual number is only 154 (Table 2.29). The level of benefits is significantly higher, as is the level of student loan taken and the level of grants. Term-time earnings are also less for these students. These students are most likely to be either disabled students or students with dependent children. The pattern is similar for part-time students except that the loan is smaller and term-time earnings are far less (only 45% of the earnings of those not in receipt of benefits) (Table 2.30). This again suggests the presence of children or of disability.

Table 2.31: Total and main sources of income by term-time employment ( FTHE Combined)

Table 2.32: Total and main sources of income by term-time employment ( PTHE)

2.37 Nearly 40% of FTHE students declared having no income from term-time paid employment (Table 2.31). These students without paid employment had roughly 60% of the income of those students who did have paid employment during term-time.

2.38 Around 70% of part-time HE students in the survey had some term-time earnings (Table 2.32). Those who did not work during term-time tended to have a much smaller mean income. Those students without term-time paid employment, however, had much larger income from benefits (£2922 versus £696) and higher income from grants and other sources.

Table 2.33: Total and main sources of income by vacation employment ( FTHE Combined)

Table 2.34: Total and main sources of income by vacation employment ( PTHE)

2.39 Around two-thirds of full-time HE students have paid vacation employment. These students tend to receive similar sums in loans and living contributions to those who do not work in the vacation (Table 2.33). However, vacation workers tend to have higher term-time earnings. Overall, those students who had paid employment in the vacation had a higher overall income. Vacation time earnings are not in these tables but may impact on term-time earnings by reducing the need to work during term-time.

2.40 It may also reflect a need or desire to earn more throughout the year.

2.41 The mean figure for vacation earnings for full-time HE students is £1880 but there is a wide variation around this figure.

Table 2.35: Paid income by industry ( FTHE Combined)

Table 2.36: Paid income by industry ( PTHE)

2.42 Full-time students who are employed during term-time and vacations are concentrated in three industries: wholesale and retail sales, other services and hotels and restaurants (Table 2.35) with the mean income in these industries being £3303, £2782 and £2897 respectively. Mean income was lowest in agriculture, forestry, fishing and energy and highest in transport, storage and communication.

2.43 Reflecting their more extensive engagement in employment, in each industrial sector part-time HE students earned more than their full-time peers (Table 2.36). Part-time students were spread more evenly across industries, although again wholesale and retail sales and other services were the sectors containing the greatest concentrations of students. In contrast to the full-time students, among the part-timers, the highest incomes were reported by those working in agriculture, forestry, fishing and energy and public administration and defence, but again were low in hotels and restaurants.

Table 2.37: Number of hours worked and hourly wages by level of study

2.44 For full-time students there is a range of number of hours worked with some students working two full days per week (with an average of a day and a half) (Table 2.37). Those students in the third quartile were working an average of 16 hours per week. Vacation time working hours for full-time students is close to full-time (median 30 hours). Hourly pay for all full-time students is very close to minimum wage. Hourly pay for part-time students displays a wide range with a median of £9.

Conclusions

2.45 The main highlights from the findings in this chapter are:

• Student income varies little by sex for FT students but differs considerably for PT students. Income also varies widely by mode of study with part-time students' incomes considerably higher than those of full-time students.
• Income also varies by age and whether the students have dependent children; mature FT students have nearly double the income of younger students while PT mature students have almost three times the income of younger students. Younger students are also more likely to be living with parents and have lower levels of income.
• A surprising finding is that working class FT students have slightly higher income than middle class ones. There is no obvious interpretation of this outcome but it could be that middle class students are receiving more in non-cash benefits from their families.
• While about three quarters of the sample of students in full-time HE have taken out student loans, only just over 9% of part-time students had one. However, as previously noted, fewer part-time students are eligible for student loans compared to full-time HE students.
• The majority of full-time and part-time HE students declared term-time earnings. Paid income varied by industry, whether or not they lived with parents and other residential variables.