Do student loans compensate for parental resources? The role of student loans in the transition to higher education

ABSTRACT

The expansion of higher education through the privatisation of funding sources raises a question regarding socioeconomic inequality in participation in higher education. To explore mechanisms of educational inequality, this study examines how different indicators of socioeconomic background work together to influence both participation in higher education and student loan uptake via a longitudinal survey of students and their mothers in Japan. The results showed that: first, parental education, household income, and savings independently affect the chance of attending a higher education institute; second, parental education and economic resources have an interaction effect in that high parental education mitigates the impact of economic resources; third, this compensation between different resources occurs by taking advantage of student loans. Students from families with lower economic resources but high parental education are more likely to be the beneficiaries of student loans.

KEYWORDS:

• Multidimensionality of socioeconomic background
• educational inequality
• resource compensation
• student loan

Acknowledgments

The author would like to thank the editors and anonymous reviewers for their helpful comments and suggestions on the earlier versions of the manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. A college of technology is a five-year institution for students who have completed a lower secondary education.

2. Japan Scholarship Foundation annual report, FY 1994, and JASSO annual report, FY 2014.

3. Those receiving grants constitute a very small proportion of the student body. Although a new grant was introduced in April 2020 (JASSO, 2020), the respondents in this study do not belong to the cohort that experienced this introduction.

4. The survey conducted in 2012 was approved by the Research Ethics Committee of the Graduate School of Human Sciences, Osaka University. The follow-up survey in 2017 was approved by the Research Ethics Review Committee of the Institute of Social Science, the University of Tokyo.

5. As shown in ‘The Japanese context’, 48.0% of high school graduates in March 2014 progressed to university in the next academic year (MEXT (Ministry of Education, Culture, Sports, Science and Technology), 2014). The data from the current study (55.2%) is higher than this figure. It is notable that the official statistics do not account for those who failed to pass their entrance examinations and postponed their admission to university.

6. This study used unweighted data. This is because there is a lack of widely accepted methods for weighting this type of data and identifying how best to weight the sample to make inference to a population requires future research.

7. Focusing on 2014–15 might underestimate the effect of socioeconomic background because the Ronin students who entered university in 2015–16 are more likely to come from a higher socioeconomic background. In contrast, the difference between 2015–16 and 2016–17 is consistent with the comparison between postsecondary education with four-year university.

Additional information

Funding

This work was supported by the Japan Society for the Promotion of Science (JSPS KAKENHI) under Grant Number [JP16K13545, JP18K02387, JP19H00608, JP19H01637, JP21K02282].

Notes on contributors

Kazuhisa Furuta

Kazuhisa Furuta is an Associate Professor at Niigata University. His research interests include sociology of education, particularly educational inequality, the association between education and labour market outcomes, and educational policies and attitudes towards education.