Recent changes in higher education financing policies in England have led to more students taking out student loans to fund their studies, and the amount borrowed has been increasing. However, little is known about who does and does not take them out and what determines loan take-up – gaps this paper addresses.
Unlike previous studies, we analyse loan take-up by type of loan – maintenance and tuition fee – using Next Steps, a unique dataset with rich information on students’ backgrounds and attitudes to debt. Students’ family wealth, gender, ethnicity, and attitudes to debt are all associated with loan take-up, patterns which perpetuate existing social inequalities.
Disadvantaged students are less likely to take out maintenance loans. This is associated with the adoption of debt avoidance mechanisms, like living at home, which can have damaging effects on their higher education experience and their social mobility, suggesting that policies need to focus on students’ living costs if the government is committed to widening participation.
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