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Second-generation student borrowers

by Ariane de Gayardon

Since the 1980s, massification, policy shifts, and changing ideas about who benefits from higher education have led to the expansion of national student loan schemes globally. For instance, student loans were introduced in England in 1990 and generalized in 1998. Australia introduced income-contingent student loans in the late 1980s. While federal student loans were introduced in the US in 1958, their number and the amount of individual student loan debt ramped up in the 1990s.

A lot of academic research has analysed this trend, evaluating the effect of student loans on access, retention, success, the student experience, and even graduate outcomes. Yet, this research is based on the choices and experiences of first-generation student borrowers and might not apply to current and future students.

First-generation borrowers enter higher education with parents who have either not been to higher education, or who have a tertiary degree that pre-dates the expansion of student loans. The parents of first-generation borrowers therefore did not take up loans to pay for their higher education and had no associated repayment burden in adulthood. Any cost associated with these parents’ studies will likely have been shouldered by their families or through grants.

Second-generation borrowers are the offspring of first-generation borrowers. Their parents took out student loans to pay for their own higher education. The choices made by second-generation borrowers when it comes to higher education and its funding could significantly differ from first-generation borrowers, because they are impacted by their parents’ own experience with student loans.

Parents and parental experience indeed play an important role in children’s higher education choices and financial decisions. On the one hand, parents can provide financial or in-kind support for higher education. This is most evident in the design of student funding policies which often integrate parental income and financial contributions. In many countries, eligibility for financial aid is means-tested and based on family income (Williams & Usher, 2022). Examples include the US where an Expected Family Contribution is calculated upon assessment of financial need, or Germany where the financial aid system is based on a legal obligation for parents to contribute to their children’s study costs. Indeed, evidence shows that parents do contribute to students’ income. In Europe, family contributions make up nearly half of students’ income (Hauschildt et al, 2018). But the role of parents also extends to decisions about student loans: parents tend to try and shield their children from student debt, helping them financially when possible or encouraging cost-saving behaviour (West et al, 2015).

On the other hand, parents transmit financial values to their children, which might play a role in their higher education decisions. Family financial socialization theory states that children learn their financial attitudes and behaviour from their parents, through direct teaching and via family interactions and relationships (Gudmunson & Danes, 2011). Studies indeed show the intergenerational transmission of social norms and economic preferences (Maccoby, 1992), including attitudes towards general debt (Almenberg et al, 2021). Continuity of financial values over generations has been observed in the specific case of higher education. Parents who received parental financial support for their own studies are more likely to contribute toward their children’s studies (Steelman & Powell, 1991). For some students, negative parental experiences with general debt can lead to extreme student debt aversion (Zerquera et al,2016).

As countries globally rely increasingly on student loans to fund higher education, many more students will become second-generation borrowers. Because their parents had to repay their own student debt, the family’s financial assets may be depleted, potentially leading to reduced levels of parental financial support for higher education. This is likely to be even worse for students whose parents are still repaying their loans. In addition, parental experiences of student debt could influence the advice they give their children with regard to higher education financial decisions. As a result, this new generation of student borrowers will face challenges that their predecessors did not, fuelled by the transmitted experience of student loans from their parents (Figure 1).

Figure 1 – Parental influence on second-generation borrowers

As the share of second-generation borrowers in the student body increases, the need to understand the decision-making process of these students when it comes to (financial) higher education choices is essential. Although the challenges faced by borrowers will emerge at different times and with varying intensity across countries — depending in part on loan repayment formats — we have an opportunity now to be ahead of the curve. By researching this new generation of student borrowers and their parents, we can better assess their financial dilemmas and the support they need, providing further evidence to design future-proof equitable student funding policies.

Ariane de Gayardon is Assistant Professor of Higher Education at the Center for Higher Education Policy Studies (CHEPS) based at the University of Twente in the Netherlands.


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The increasing pressure on students after Covid-19

by Caroline Jones and Huw Bell

After the pandemic students are facing difficulties linked to health, wellbeing, finances and employment prospects; increased rents, housing shortages, zero hours contracts, the cost-of-living crisis and foodbank usage all of which can affect mental health and wellbeing. This prompted our systematic review article1, which examines topics of student engagement, belonging, alienation and resilience, and specifically identifies pressures on current HE students related to these domains.  The aim of the review was to understand better the tensions faced by HE students following their experiences of educational interruptions due to Covid-19.

Students report higher costs of living, impacting their wellbeing and ability to focus on their studies, with increased stress and a greater need to work to sustain themselves (Sutton Trust, 2023). For example, the Office for National Statistics (2023) reports some students having to skip meals due to the current UK financial crisis, and data from the Student Loans Company found that withdrawals from undergraduate courses in the two years post pandemic are increasing, averaging about 18,300 withdrawals compared to about 15,600 for the preceding three years (HM Government, 2023). While Covid-19 is not the sole cause of the cost of living crisis, it has exacerbated the pressure on students post-Covid. Many HE institutions report the effects of empty classrooms on student learning as they consider new ways of working to bring students back on campus after the pandemic (Dunbar-Morris, 2023).  About 1 in 4 students are at risk of dropping out of their university courses (Jones and Bell, 2024).

Our review found that despite the importance of HE to the development of an educated workforce (Brabner and Hillman, 2023; UPP Foundation and HEPI, 2022) and social mobility (Sutton Trust, 2021), there is a feeling that UK HEIs are moving in the wrong direction, with a sense that HE is decreasingly relevant to economic development (UPP Foundation and HEPI, 2022). We argue that institutions must develop resources and processes to help alleviate the burdens students face; the essential first step is understanding what those burdens are.

In our literature search both empirical and non-empirical data were screened for inclusion/exclusion from open and closed databases focusing on key search terms and dates. We also explored the literature relating to the personal, professional, academic, and societal pressures experienced by UK HE students. In total 59 publications were examined covering the period of the pandemic up to 2023. 

The key findings were:

  1. The effects of Covid-19 have increased pressure on HE students in multifaceted and interconnecting ways covering personal, professional, academic, and societal aspects of daily life. This directly influences student mental health and wellbeing and thus student engagement.
  2. Post-pandemic, students’ mental health and wellbeing are significantly affecting levels of resilience and coping strategies in personal, professional, academic, and societal aspects of daily life, with a direct impact on student retention.
  3. Issues facing the cohort of students currently at school, such as increased stress and anxiety, are likely to affect future HE attendance, engagement, sense of belonging, alienation and resilience.

The findings led to the following recommendations:

  1. Government and HEIs need to do more to address the macro, meso and micro effects of the Covid-19 pandemic on the student population, identifying areas of increased pressure for HE students related to the personal, professional, academic, and societal aspects of students’ daily life, which directly influence student mental health and wellbeing and thus student engagement.
  2. Further focussed research is needed into post-pandemic institutional support systems and pedagogical strategies to recognise the support that has been implemented to improve students’ mental health and wellbeing.
  3. HEIs could examine the effects of stress and anxiety resulting from the Covid-19 pandemic for future students and consider strategic plans to continue to support a sense of belonging, and resilience practices to reduce alienation and increase student engagement and retention.
  4. HEIs could develop or use new conceptual tools and theories (for example: Jones, 2021; Jones, 2023), to better assess support needs for current and future students.
  5. Strategies to increase students’ resilience and coping skills post-pandemic aligned to personal, professional, academic, and societal aspects of daily life would significantly benefit mental health and wellbeing long term and thus student retention.

The results and recommendations from this systematic literature review are the scaffold for further qualitative research currently being undertaken into the pressures that HE students are experiencing in the wake of Covid-19. Staff and students are taking part in interviews and focus groups to explore the wider contextual issues associated with feelings of pressure relating to personal, professional, academic and societal influences in the post pandemic context. Many universities have invested in and extended their health, wellbeing and student services to support students, demonstrating the sector’s recognition of many of the challenges post Covid-19 students are facing. Our research will look at existing and improving support practices, systems and plans that HEIs are already implementing to support students in recognition of the many disruptions and challenges from the fall out of Covid-19.

Caroline Jonesis an applied social sciences teaching professional with extensive experience working in and across the education sector, including lecturing/programme leading in HE.  Currently employed as a Tutor based within the Health and Education Faculty at Manchester Metropolitan University.  Experience of External Examining and Peer Reviewing. Research interests include Leadership and management, risk, resilience and mental health, social mobility and social policy, widening participation and disadvantage. Originator of the Psychosocial and Academic Trust Alienation (PATA) theory. Twitter: @caroline_JonesSFHEA. LinkedIn: https://www.linkedin.com/in/caroline-jones-1bab40b3/

Dr Huw Bell is Reader in Teaching and Learning at Manchester Metropolitan University. Research focuses on teaching and learning L1 grammar in schools and universities in the UK, teachers’ attitudes to and beliefs about grammar and their impact on teaching, teachers’ enactment of the National Curriculum, and student life post-Covid. Email: h.bell@mmu.ac.uk.

  1. SRHE members can access the full article by logging in to www.srhe.ac.uk > My Account > Access to HE Journals > Taylor & Francis online > Perspectives ↩︎