Student Debt: The Causes and Consequences of Undergraduate Borrowing in the UK

Student Debt: The Causes and Consequences of Undergraduate Borrowing in the UK

Student Debt: The Causes and Consequences of Undergraduate Borrowing in the UK

Student Debt: The Causes and Consequences of Undergraduate Borrowing in the UK

Synopsis

The 1990s witnessed a number of changes in the financing of higher education in the UK. The progressive replacement of the maintenance grant by a government-backed loan means that students are increasingly forced to accept debt as an integral part of university life. This book highlights the detrimental effects of these changes and considers their long-term consequences. Uniquely bridging the gap between current education policy debates and those relating to debt, money management and financial decision making, Student debt:provides a unique insight into the causes and consequences of student debt through the use of focus groups, interviews and questionnaire surveys;draws out the theoretical and policy implications relating to different aspects of undergraduate borrowing;offers a comparative analysis of issues relating to student debt in the UK, Italy and France;covers a broad range of topics including money management styles, attitudes towards credit and debt, the psychological effects of student debt, and the student-bank relationship.This book will be of great interest to policy makers and social policy academics with an interest in financing higher education, money management in general, financial exclusion and financial literacy, and to anyone who is concerned about the impact of rising levels of debt on students' well being.

Excerpt

Adrian J. Scott, Alan Lewis and Stephen E.G. Lea

This book brings together nine previously unpublished empirical studies examining different aspects of student debt in the UK; comparisons are also made with Italy and France. Qualitative and quantitative research methods have been used including focus groups, face-to-face interviews and questionnaire surveys. the context was that of continuing change in the arrangements for student finance, moving in the uk from a nonrepayable grant-based system to a repayable loan-based one. All the uk research was conducted with students who had already entered university, or were expecting to apply to universities, after that process had begun, but prior to the abolition of the maintenance grant and the introduction of tuition fees in 1998.

Topics of investigation include student money management styles, student attitudes towards credit and debt, the psychological effects of student debt, and the nature of the student–bank relationship, all of which have implications for educational policy (and our understanding of the process of economic socialisation). the government claimed that the introduction of a loan system would encourage financial independence and responsibility among students. the findings presented in this book, however, suggest a different story, one in which students are being forced to take charge of their finances (often for the first time) without being fully aware of the repercussions of their actions. a combination of the incentives banks and lending institutions offer to encourage borrowing, a lack of money management skills, and a growing tolerance towards credit and debt result in many students owing a substantial amount of money at the end of their degree. in 1999 for example, the average graduate owed £5,286 (Barclays News Release, 2000), a figure that, for many university leavers, is likely to increase threefold by 2001 following the abolition of the student maintenance grant and the introduction of tuition fees.

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