institute for employment studies
publications by IES authors
Student Income and Expenditure Survey 2004/05
Finch S, Jones A, Parfrement J, Cebulla A (NatCen), Connor H, Hillage J, Pollard E, Tyers C, Hunt W, Loukas G (IES)
a study commissioned by the Department for Education and Skills
This summary is published in the Department for Education and Skills Research Report RR725. A complete list of DfES Research Reports is available at DfES.
The 2004/05 Student Income and Expenditure Survey (SIES) was jointly conducted by a research team from the National Centre for Social Research (NatCen) and IES. The survey covered a random sample of a little over 3,700 full-time and part-time (including Open University) students in higher education, in England and Wales at 88 institutions. It was conducted between January and April 2005, using face-to-face interviews and expenditure diaries (telephone interviews for Open University students). It was the first comprehensive assessment since 1998/99 and designed to set a baseline against which future changes, following the 2004 Higher Education Act, could be monitored. The survey collected data on students’ income, expenditure, debt, savings and financial hardship and a range of personal information.
On average, the total income for full-time students from England in 2004/05 was £8,333. Part-time students’ income was £11,196. Total income and the constituent sources of income varied considerably between different groups of student.
The amounts contributed from the various income sources differed by age for full-time students, with mature students gaining more from other student support (especially NHS bursaries) and also paid work and social security benefits. Among part-time students, income varied mostly by gender, with males earning considerably more than females. Average income of black / black British students was slightly higher compared with white students, and considerably higher compared with Asian/Asian British. Paid work was a major contributor to the black income figure while contributions from family and friends figured less strongly than for others.
The lowest average incomes were found among medical and dentistry students largely because of a lower contribution to their incomes from paid work. But they had the highest contributions from families and friends.
Loans are a key source of income
Students loans were a key source of income for full-time students, contributing on average £2,700 towards total income (about one-third). Almost four out of five took out a student loan, the average loan was £3,400 and this varied little between groups of students. Traditional students were those most likely to take out a loan, ie young, single, dependent and living away from their parental home.
Half get tuition-fee support
Almost half of full-time students reported receiving tuition-fee support from the government. The average received (for those receiving any) was just over £1,000, very close to the student fee contribution of £1,150. Fewer part-time students received support for tuition fees, only 27 per cent, getting on average less than £500.
Additional sources of support
In its inaugural year, a quarter of first years got a higher education grand, each receiving on average almost £900. A key additional source of financial support came from the NHS through bursaries and additional allowances, although this only benefited a very small proportion of students (five per cent), as did other special funds (eg for childcare, disabled allowances).
Earnings from work are important
Earnings from paid work during the academic year (ie excluding the summer vacation) were a significant source of income for full-time and especially part-time students. Working while studying contributed on average £1,800 (after tax) to full-time students’ income (22 per cent of the total) and £8,600 (70 per cent) towards part-time students’ income. Over half (56 per cent) of all full-time students undertook paid work at some time during the academic year, and earned on average £3,200 (after tax) each. This was more likely to be from permanent or continuous employment than casual work.
Most full-time students also work during the summer vacation. Those in their second or later year earned on average £1,300 in the previous summer, bringing their total income from paid work over the year up by one-third, to £4,100. A substantial proportion, 39 per cent of full-time students and 52 per cent of part-time students, who had undertaken paid work during the academic year, felt it had impacted upon their health and well-being, study outcomes and the quality of their higher-education experience.
Income from family and friends
Income from family and friends contributed a quarter (25 per cent) of full-time students’ total income. Much of this came from students’ parents. Students relying most heavily on income from family and friends were again traditional students – younger, white dependent, living away from home, from higher socio-economic backgrounds and from families with experience of higher education.
While many full-time students are ineligible for social security benefits, these benefits represented an important source of income for non-traditional students, particularly older students, those of independent status, and those with children.
The average total expenditure of full-time students living in England in 2004/05 was £10,270. The average total expenditure of part-time students was £14,270, that is almost 40 per cent higher than the average for full-time students.
More than half of the costs reported by full-time and part-time students were living costs, including food, personal items, such as clothes, toiletries and mobile phones, entertainment, household goods and non-course-related travel. Full-time students spent £5,870 on these items, while part-time students spent a much higher figure: £,8970.
Within living costs, full-time students spent an average of £1,490 on food, £1,710 on personal items, and £1,200 on entertainment. The corresponding totals for part-time students were £2,310, £2,190 and £1,280.
A further fifth of both full-time and part-time students’ expenditure was on housing, including rent, mortgages, retainers, council tax and household bills. Housing costs were an average of £2,280 per annum for full-time students and £3,040 for part-time students.
Participation costs, that is costs incurred as a direct result of attending university or college, accounted for 19 per cent of expenditure for full-time students and 11 per cent for part-time students. Full-time students living in England spent an average of £1,980 in 2004/05 on participation costs, including the full tuition-fee contributions of £1,150 and £430 on books, computers and equipment. Part-time students spent an average of £1,610.
Facilitation costs, that is spending on petrol, travel, childcare and other items that made it possible for students to study, contributed an average of £400 per annum for full-time students and £475 for part-time students.
Family-type drives spending levels
Among the minority of students (seven per cent of full-time and 37 per cent of part-time) who had children, expenditure was generally higher than for others. In multiple regressions of expenditure for each group, family-type was identified as the strongest predictor of the level of expenditure. Lone parents had higher expenditure levels than those in two-adult families. Full-time and part-time students who owned their home or were buying it with a mortgage had relatively high levels of expenditure.
Overall financial position
Overall, around half of students believe they had at least as much money as they needed. However, 13 per cent of students felt that they had a lot less than they need.
Sixty per cent of full-time students felt that financial difficulties had affected their academic performance, although half of these felt that the effects had been relatively small. Part-time students were less likely to feel that their performance had been affected, and 60 per cent felt there had been no financial effect on their studying.
Part-time students suggest that they will have slightly higher levels of savings at the end of the academic year than full-time students, just over £2,500, compared with around £1,850.
Full-time students borrow almost exclusively from student loans, which make up 83 per cent of the borrowing of this group (a total of around £6,850 on average). Part-time students not only borrow less heavily (on average £3,000), but also use other sources such as commercial credit more.
When savings are deducted from borrowings, among final-year students, the average predicted debt by the end of the course is around £7,900, whereas part-time students owe around £350 less than they have saved, leaving them in credit.
Higher average debt levels for full-time students were expected among students from manual occupational backgrounds, lone parents, medical and dental students, and students studying in Wales.
Around one-quarter of full-time and almost one-third of part-time students felt that their decision to enter higher education had been affected by financial considerations and most said that they would not have studied without financial support. A quarter of students felt that concerns over debt nearly stopped them coming to university, while the vast majority (four out of five) thought that the long-term benefits of higher education were greater than the costs and that they would earn more as a result of going to university.
Full-time students expect to earn an average (mean) of £18,400 on graduation rising to £29,800 after five years (a rise of over 60 per cent). Part-time students have higher initial expectations (£20,500), but their ambitions are more modest and expect their average salary to increase to £27,600 after five years.
Students in Wales
Students from Wales have similar income and expenditure levels to their English counter-parts, although they estimate they will have slightly lower debt levels when they finish their studies than English students, while the average part-time student expects savings to exceed borrowings.
Changes since the last survey
Taking account of inflation, student income has risen by between 18 per cent (for part-time students) and 46 per cent (for full-time students) between (the previous survey in) 1998/99 and 2004/05. Expenditure rose at a slower rate, by between 39 per cent (part-time students) and 44 per cent (full-time), over the same period. Total borrowing went up by 66 per cent (part-time) and 74 per cent (full-time).
Although there are differences in scope and method between this latest and the previous survey, the differences in the levels and composition of income and expenditure noted between the two surveys are of such a magnitude that they are unlikely to be explained just by the technical differences in the two surveys.
Student Income and Expenditure Survey 2004/05, Finch S, Jones A, Parfrement J, Cebulla A (NatCen), Connor H, Hillage J, Pollard E, Tyers C, Hunt W, Loukas G (IES). Research Report RR725, Department for Education and Skills, 2006.
2006 © institute for employment studies About this site