Student debt in Scotland: who borrows and how much?

This post provides additional data for this piece, published on the blog of  Economics of Higher Education Network.

figure 1 provides the budgeted student loan figures for Scotland between 2003-04 and 2014-15

figure 2 shows the percentage shares of student loan as against the share of the total population of students receiving some form of government support, in the best available published income categories

figure 3 shows how this translates into average debt for borrowers in each category

figure 4 shows the  proportion of students taking out a loan in each category, with an indication of how far the number of those not taking out a loan may be explained by the number of students  in each category who are not permitted to do so. (Note: updated on 13/12/13, to reflect that I had suggested that part-time students might account for some of non-loan takers at lower incomes, but have now  been able to establish from the SG that the published data already excludes these).

The article notes that debt take up is more evenly spread in jurisdictions with fees and higher grants.  This draws on two main sources.  Statistics produced by the Student Loans Company show that the  take-up of tuition fee loans in both Wales and England is well over 80%.  A higher percentage of students also also take out living cost loans.  Although more detailed data is not published on income distribution, it is arithmetically impossible for this not to produce a more event spread of debt than in Scotland, particularly once combined with the way higher grant reduces living cost debt at lower incomes, as already analysed here.   [Update: figures since provided by the SLC confirm that debt is far more evenly spread across the income range in other parts of the UK – see later post here.]

Last of all, this chart Debt by income, which is more of a work in progress, estimates how actual borrowing was distributed across the whole student population, including non-borrowers and those who did not apply for any means-tested support, and compares that with the published averages for borrowers who have declared an income  and the entitlement to loan at different incomes in 2012-13. It involves making quite a few assumptions and estimates and I’ll post more about that shortly.  However, it is based on what ought to be a good enough working model.   Averages are plotted at the mid-point for an income range and trend-lines have been added.

This last chart provides an indication of how  in practice, the distribution of new student loan debt in Scotland last year was more skewed towards poorer students than suggested either by entitlements in theory or the data available on borrowing by income.  How this pattern has been changed by the new arrangements in place from this year will not be known  until next autumn. On this model we might expect that borrowing will rise noticeably on the left-hand side of the chart, may lift a little in the middle with the introduction of a higher minimum loan for those with incomes from the mid £30,000’s, but is likely to remain low at the right-hand side, even though this group will be offered the chance to borrow much more.

There is more material on the pattern of borrowing in Scotland and influences on it in this post.