Debt grows ever bigger and even more painful

February 1, 2002

A survey of students shows no overwhelming desire for change in the support system, even though many find it a constant struggle to manage finances as debt rises higher. Claire Sanders reports.

Despite their rising debt, most students do not want the government to introduce grants and a graduate tax.

According to the second Student Living Survey from the student accommodation provider Unite, 46 per cent of students said they preferred the current system of loans. A third preferred the proposed grant and graduate tax model.

On behalf of Unite, MORI interviewed 1,068 students face-to-face from 20 universities between October 22 and November 16 2001. All were full-time students; 11 per cent were postgraduates. A focus group of four vice-chancellors discussed the issues.

Even among students with a student loan, only 37 per cent preferred the proposed system. Students were asked to compare the current system with one "whereby maintenance grants will be reintroduced and university students will be taxed at a higher level once they graduate and start work".

There is no significant difference in terms of social class. But mature students (over 21 when they started university) favoured the proposed new system.

One of the vice-chancellors commented: "The idea of having fees is that you put money into universities quite quickly. However, with a graduate tax you have a much later payback."

Average debt at the start of the academic year 2001-02 was £4,203, an increase of £877 over last year (see table). The amount students expected to owe at the end of their studies increased by £1,107 to £8,133.

The first Unite survey showed no significant difference between the amount owed by students from different social class groupings. Now, students from blue-collar, manual and unskilled backgrounds owe £1,019 more than those from a professional background. The amount these students owe increased by an average of £1,483 over the past year, more than three times the rise experienced by students from professional backgrounds (£440).

Owain James, president of the National Union of Students, said: "There is now a clear distinction between the haves and the have-nots." The NUS wants fees abolished and targeted grants introduced.

The biggest increase in debt since the first survey was among third and subsequent years. This reflects the introduction of tuition fees and the abolition of grants. Among postgraduates, debt has also risen significantly - from £3,404 to £4,832.

Sixty-one per cent of students have a government student loan. This figure rises to 69 per cent for students in their third or final year. Just under a third have an overdraft from their bank. About 10 per cent owe money to credit-card companies or their parents.

More than a quarter of students have serious financial problems, but 23 per cent have no debt at all.

Eighteen per cent of the students interviewed said they found it a struggle to manage finances; 4 per cent said they were seriously behind with some bills and 2 per cent said they had fallen behind with all their bills. Twice as many students from blue-collar, manual and unskilled families found it a struggle to keep up with bills and credit commitments compared with those from professional backgrounds (see table).

Students from all social classes increasingly cite debt as one of the worst aspects of university. Students from middle-class backgrounds tend to build up less debt than those from lower classes, but many still leave university owing considerable sums of money, the survey says.

More than two-fifths of students, especially younger ones and those from blue-collar families would like more guidance on how to manage finances.

The survey shows more students in paid work to supplement their incomes (see table). The proportion of students working part time in term-time has risen significantly in the past 12 months, from 30 per cent to 43 per cent (see table). Students from state schools are more likely to work (44 per cent) than those from private schools (34 per cent).

Only 15 per cent of students arrive at university without any savings. Just under two-thirds worked to earn money in preparation. Most students receive some help from their parents. Since last year, there has been a significant rise in parents helping students with their tuition fees. The average parental loan is £2,377. More than two-fifths of students agree that borrowing money to finance higher education causes friction with their parents.

Although more than half of students feel more stress since starting university, 96 per cent believe that going to university is a worthwhile experience (see table). The proportion of students who hold very or fairly favourable opinions of their university has been constant over the two surveys, with students at old universities tending to be happier with their institution than those in new universities.

The course on offer is still by far the most important factor in students' choice of university, but the relative importance of university league tables has grown. A fifth of students now view them as an important consideration. Those from professional backgrounds and those expecting to get a first or upper second placed the most emphasis on them.

ost students said their course had met their expectations. But where there has been a real leap is in availability of and access to information technology. Male students and those in their first and second years are particularly complimentary. "It would appear that the investment universities have made in IT facilities is showing real benefits, with significant improvements in the proportion of first and second-year students believing the provision to be very good," the survey says.

The opportunity to improve career prospects is still considered to be the best aspect of university life, followed closely by making new friends and the social life. But far fewer students now believe that university brings more independence and freedom. The survey says this could reflect the greater financial ties today's students have with their families.

Although the cost of higher education means that students demand more for their money, an increasingly large majority sees money spent on education as a good investment.

Not all of students' money goes to education, of course. Most (86 per cent) own a mobile phone, and two-thirds have a computer and/or laptop - a rise of 7 per cent over last year. Thirty-seven per cent of students own a DVD player or videocassette recorder.

Going to the pub is a popular pursuit for 52 per cent of students and on average students spend £20 on alcohol in a typical week. A quarter of students said they spend between £21 and £50 on alcohol in a typical week in term-time, and one in 20 spends between £51 and £100. However, as today's student body is more diverse in age, social class and ethnicity, a fifth of students buy no alcohol in a typical week.

A third of students live in shared houses rented from private landlords, a fifth live at home with parents and another fifth live in halls of residence. One in ten lives in their own house or flat. This profile has changed little in the past year.

Students living at home tend to be younger, from a middle-class or manual background and studying for an higher national diploma/higher national certificate or a degree at a new university. Among those living at home or in their own house, a third would rather have moved away from home to go to university.

A quarter of students have been a victim of crime while at university. This figure rises to a third among students in their third or subsequent years, and to almost two-fifths among postgraduates. The main crime faced by students is car theft or vandalism, theft from their house or flat and having their purse or bag stolen.

Most students were happy with their lives and optimistic about their futures. However, more than half of students said that since being at university they felt under a lot more stress. The survey says this suggests that "there is a need for universities to help students deal with this issue". "Life at university is particularly more stressful than before for female students, those from a C2DE (blue-collar and manual) background and those studying at new universities," the survey says.

Despite controversy over the government's plans for higher education, if there were a general election tomorrow students would vote Labour back into power. However, support for the Liberal Democrats has grown considerably in the past year, mainly at the expense of the Conservative Party. Support for Lib Dems is higher than in the general population as a whole. Students, by a small margin, would vote for the introduction of single European currency in the United Kingdom.

Diana Warwick, chief executive of Universities UK, said: "The report highlights the need for further investment in order to safeguard standards and the quality of students' learning experience, particularly in the context of widening participation."

Key findings from the survey

  • 46 per cent of students prefer the current system of loans to a grant and graduate tax model
  • Debt among students from a blue-collar/unskilled background is rising at a faster rate than that of students' from a professional background
  • 39 per cent of students do not have a government student loan
  • The proportion of students working part time in term-time has risen from 30 per cent to 43 per cent
  • Parents are increasingly paying their children's tuition fees
  • On average, students spend £20 on alcohol in a typical week. One in 20 spends between £51 and £100.

Which ones do you recognise? The five types of students identified by Unite/MORI's student living survey


Demographics : The youngest group, most likely to be in their first year and from the north of England. Most likely to come from a professional background, to own a mobile phone. Least likely to have a partner.

Debt : This group gets the most financial support and has the least money worries. They are the most likely to pay tuition fees and to receive help to pay them from others.

Lifestyle : Happy with their choice of university, members of this group feel well prepared for working life. They are sociable - when not working, they are the most likely to be found in the pub. They spend the most on drink - an average of £24.90 a week.

University : Members of this group choose career-oriented courses such as engineering and technology and do not feel stretched by the work.

Future : Likely to go travelling after completing degree.


Demographics : Female dominated and from unskilled or unemployed families. Most likely to be studying for an education qualification and come from Wales.

Debt : Most in debt (average £5,226), most worried about debt, and anticipate most debt on leaving university. Keen on some financial guidance and receive least financial help from parents.

Lifestyle : Most likely to have been victims of crime and most socially concerned group. They are the most likely to be a member of a student society or club when not studying.

Stress : 79 per cent feel under more stress than before going to university.

Work : Hard for this group to work in term-time due to rigid timetable, but do work in holidays. Would most like to work in student services if they had the opportunity to work at their university.

Future : Despite being in debt, this group is most likely travel for a year after completing degree.


Demographics : The oldest of the groups, these are most likely to be postgraduates, financially independent and married before going to university.

Debt : This group does not want financial guidance and is the most likely to have long-term savings and to own their own home.

University life : University is a place to study for members of this group, who are very unlikely to go to the pub.

Future : This group is optimistic about the future and does not feel too much pressure to get a first or upper second.


Demographics : This group is most likely to come from an ethnic background.

Debt : Have the lowest level of debt and least likely to have a student loan. But most likely to have borrowed from parents - perhaps as a result of this, they are the most likely to agree that this causes friction with their parents.

University : Success is very important to this group. They expect a first, used university league tables to assess their choice of university and are least likely to have taken a year out before studying.

Lifestyle : Most likely to have designer clothes and care about health and fitness.

Future : Under a lot of pressure to succeed and make money.


Demographics: This is the group most likely to be based in London.

Debt : This group owes the least money to their parents and do not need advice.

University : They have a negative view of their university and are least likely to believe that money spent on higher education is a good investment.

Course : Most likely to be disappointed with their course.

Accommodation : This is a big issue for this group. Most likely to live in rented accommodation and to feel ripped off and unsafe.

Future : Do not feel well prepared for their future.

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