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The expansion of participation in higher education in the UK can be traced to the Education Act (1944) (HM Government, 1944) which introduced equality of access and education opportunities through the introduction of scholarships, bursaries and other allowances. The Education Act (1962) (HM Government, 1962), following the Anderson (1960) Committee Report, introduced the student grant system in an attempt to widen, even further, access to higher education that was endorsed by the Robbins (1963) Committee which considered that access to higher education should be based on qualification, ability and attainment. Since the 1960s there have been a number of significant changes to the financial support regime for higher education students in the UK. In 1985 the student maintenance grant was abolished, leaving a 'fees only' minimum award and in September 1990 a new system of student financial support (student top-up loans) came into operation. More recently, there has been the replacement of maintenance grants with a multilayered formula of maintenance grants, student loans, fee subsidies and university bursaries (HM Government, 2004). These changes were aimed at increasing the funding available to universities and increasing student access to higher education by reducing the financial barriers to entry. The government considered it right that students make a contribution towards the cost of their course while recognising the financial support needed by some students. They also considered the reforms as taking an 'important step in the direction of treating students as independent adults at 18 and the Graduate Contribution Scheme means that no student need rely on their parents to pay for the cost of their tuition' (Department for Education and Skills (DfES), 2003, p. 88). These changes to the financial support available to students coincide with the government's pursuit of a fair access to higher education agenda. Widening participation is a government initiative (National
Committee of Enquiry into Higher Education, 1997; DfES, 2003), based on the notion of equality, which aims to offer opportunities to groups within the population, for example, people with disabilities and ethnic minority groups, that are under-represented in higher education. It also recognises that 'the social class gap among those entering higher education is unacceptably wide' (DfES, 2003, p. 17). Since 2001, the National Statistics Socio-Economic Classification (NS-SEC) has been used for all official statistics and surveys and is an occupationally based classification. The NS-SEC indicates categories I to III as 'not low SEC' (Office for National Statistics, 2005). According to the Higher Education Statistics Agency (HESA, 2005) 28.6 per cent of young people across the UK entered full-time, first-degree courses from socio-economic classes IV-VII in 2003-2004. This percentage is likely to increase over the coming years with one of the Higher Education Funding Council of England's (HEFCE, 2003) objectives to increase participation in higher education towards 50 per cent of those aged 18-30 by the end of the decade. InWales, the Higher Education Funding Council forWales' (HEFCW, 2005) target is to increase, from 8.9 per cent in 2000-2001 to 11.4 per cent in 2010-2011, the participation in higher education of students from Communities First areas (equivalent to the 100 most deprived electoral divisions inWales). A further indication of the potential increase in students participating from lower social economic groups is the recommendation in the Leitch (2006) review that the UK commits to becoming a world leader in skills by 2020 in order to compete with the best in the world, increase productivity and employment rates, and decrease poverty and inequality. In addition to increasing the percentage of adults achieving basic skills of literacy and numeracy, and shifting the balance of intermediate skills from Level 2, which equates to 5 = good General Certificate of Secondary Education, to two 'A' levels at Level 3, the recommendation seeks to increase the number of adults qualified to Level 4, which is degree-level or its vocational equivalent, to over 40 per cent (up from 29 per cent in 2005) (Leitch, 2006, p. 3).
The widening participation agenda recognises the inequalities in participation in higher education, which, whether or not linked to age, ethnicity or social class, have been reported for many years (Bynner, 1992; Marsh and Blackburn, 1992; Beinhart and Smith, 1998; Gorard and Rees, 2002; NIACE, 2003: as reported in Gorard et al., 2006).
Further, Gorard et al. (2006), while recognising the problems inherent in estimating or analysing patterns of participation in higher education, suggest that non-participation is a complex issue arising from a number of 'barriers'.
• Situational barriers: such as direct and indirect costs, loss or lack of time, and distance from a learning opportunity, created by an individual's personal circumstances.
• Institutional barriers: such as admissions procedures, timing and scale of provision, and general lack of institutional flexibility, created by the structure of available opportunities.
• Dispositional barriers: in the form of an individual's motivation and attitudes to learning, which may be caused by a lack of suitable learning opportunities (e.g. for leisure or informally), or poor previous educational experiences. (Gorard et al., 2006, p. 5)
However, for students from lower social economic groups, participation in higher education is significantly influenced by cost,
So, if it is observed that participation in higher education is costly and that potential students from lower income families have lower rates of participation then it can be hypothesised that cost is a barrier. (Gorard et al., 2006, p. 9)
Further research indicates that these students tend to be more debt averse and are less likely to participate in higher education, more likely to leave university with higher debts if indeed they choose to study and have a greater need to work part-time to fund their studies. To exacerbate matters this group of students are unable to rely on their parents for finance or financial advice. Callender and Wilkinson (2003, p. 130) reported that students from the lower social classes '. . . received relatively little financial help from their families. They were not only less likely to obtain such support, but also the amounts they received were well below the average.'
While students have always found balancing their finances difficult, the current generation are faced with unprecedented debt burdens during and on completion of their studies. The Barclays Annual Graduate Survey (Barclays, 2005), an online study conducted by NOP, a leading market research organization, indicates that average graduate debt levels have risen consistently over a 10-year period from £2,212 in 1994 to £13,501 in 2004 (Table 1).
A similar upward, but not so drastic, trend was reported by the student hospitality company, Unite (2006); student debt had increased by 58 per cent since 2000 with two-thirds of students now in debt and owing on average around £5,300 which they expected to rise to around £9,700 by the time they complete their studies. Most (82 per cent) of the students surveyed were reported to be in debt to the government (student loans) with a further 32 per cent owing money to the bank and 20 per cent borrowing money from credit cards and commercial loans. Only 12 per cent of students said they were receiving some financial help from their parents. A further indication of rising student debt has been published by the NatWest Student Money Matters survey (reported in the Guardian, 2006). The study of 3,133 sixth formers revealed anticipated average debt levels of £33,512 for a three-year degree course.
Irrespective of social class, today's students will inevitably encounter debt as a consequence of going to university but how prepared are they to deal with their personal financial matters? This study attempts to measure the personal financial awareness, attitude to debt and budgeting capabilities of a group of first-year business school undergraduates. The paper begins by reviewing the literature on the consequences of increased student debt in relation to participation in higher education and the reliance on part-time work and the effect these aspects may have on student health and well-being. Financial literacy is then defined together with a discussion of students' financial awareness and attitude to debt. The method is then described, including the development of a questionnaire containing a 34-question multiple-choice question (MCQ) test targeted specifically at the personal financial awareness of undergraduates .The results of the survey of 149 UK status undergraduates are then reported and analysed. Finally, conclusions are drawn and the limitations and scope for further research are identified.