CHAPTER 2

Review of Related Literature and Studies

LITERATURE

Allan Coran (2013) stated that globally, being financially stable became a

serious matter when it comes to productivity and creativity in the academic performance

of students. Indeed, we researchers also believe that being financially stable means

students could afford their daily academic expenses in their everyday life as they

productively enhance themselves in school. but financial instability on the other hand,

can cause negative effects to the academic performance of students, such as they

could not afford to buy tools, supplies or equipments that is needed for their Academics.

Also, they could not afford a particular project, neither to participate financially in a

specific project. as they cannot afford to buy things that is essential to their academic

development, it may result for the decrease of their academic performance in school.

Therefore, Salma (2013) said that in daily survival where such circumstances

occurs, the students tend to stop studying and just work for their daily living. They don't

matters about degree anymore, as long as to overcome poverty.

Further, the researchers concluded that, that is why students that dropped out

and preferred work over education is mostly because of Poverty and financial problem,

they prefer to address their daily living expenses than study. They thought that finishing

their academics will take so long just to have a decent job to feed their families. They
also thought that if they work rather than study, they could address their financial

problems or at least lessen them.

In addition to Salma’s staterment, Pauline Machika (08 Apr 2014) quoted “Poor

students face massive financial stress”. She stated that Institutions of higher learning in

the Phlippines needs to understand the full impact of the conditions of poverty under

which students live, think and learn while studying for a degree or diploma — and how

these conditions affect their academic success.

Furthermore, the researchers believe that entering into tertiary education for

students from poor backgrounds is an opportunity to change their economic status at a

personal and family level. But this becomes difficult to achieve when their economic

conditions impact on their ability to achieve academic success. It will be hard for them to

finish their diploma and degree if they could not afford their academic expenses due to

the financial problem of their families.

Masselle (2015) stated that many poor students from low income households do

not have enough funds to afford enough and sufficient food, In addition to that, other

students apply for scholarship to ease financial problem and other expenses. As a

result, students become preoccupied with finding ways of addressing and meeting their

other financial needs such as living, accommodation, resources for assignments and

registration fees and this has a negative impact on their Academic Performance.
 Based on the researchers’ own understanding, students tend to be preoccupied

for they are experiencing the lack of food and nutrition due to their financial problem.

For instance, when students are hungry, they can't think straight and they tend to be

preoccupied. In this situation, it is impossible for them to focus and to finish the things

they intended to do.

In addition to Masselle’s statement, Archuleta (2013) stated that financial

problems may also alter students’ priorities, as those experiencing it are more likely to

work in addition to their schooling, and they work longer hours than their academic

studies. His statement also indicates that academic performance wanes in the presence

of students’ financial issues. Therefore, financial problems have been tied to reduced

course loads, temporary or permanent school dropout, and longer times to degree or

diploma completion.

Similar to Salma’s and Pauline Machika’s statement, as we researchers recall,

that financial problem forces students to work and divide their priorities between working

and studying, that eventually may result to the decrease on their academic performance

due to the divided attention and financial instabilities that they are facing.

Further, St. James Collages of Antipolo City Inc. (2018) Stated that the effect of

financial problem among students is the lack of food, money and financial support, poor

health and a decrease in the academic performance of students.

In addition to that, the researchers believe that the effects of financial problem

among students can be crucial if not addressed early, the lack of food due to financial

problem will cause hunger, and when a person or student is in the state of hunger,
he/she can’t focus on the things he/she intended to do that may lead to failure. The best

way to ease the financial problem is to make a good decision in our life and think smart

to spend money in other expenses.

Marko Marcolin (2012) pointed out that financial problems among Filipino

Family are often the basis for other problems among students like mental illness, such

as isolation, emotional stress, depression and lower self-esteem; and a variety of other

unhappy experiences. To lessen the likelihood of financial problems, he had indicated

the importance of financial attitude, financial knowledge and skills. For instance,

Marcolin indicated that having financial literacy is an essential basis for both avoiding

and solving financial problems.

Further, teaching students about the significance of financial knowledge and

skills could lessen, avoid or eliminate the financial problems that they are experiencing,

so as the negative effects of financial problems among students such as emotional

stress, depression and low self-esteem. Having these negative effects could affect the

behavior and their performances towards their academics.

FOREIGN

Laili and Saad (2017), stated that although students do not have a commitment
on

paying monthly debt instalments like other households, however, their status as
students

requires them to pay their education fees, and other essentials, by which they received

the financial from their families. In addition, students who came from underprivileged or

low-income families might affect their academic performance, since the lack of financial
support among students highly affects their Education, particularly their academic

performance in school.

the researchers, at the same time as students, we witnessed how hard it is to

be belong in an underprivileged family, and also, how hard it was to born with the

financial problem within the family. It hinders our opportunities to excel just because we

could not afford things that is necessary for our academics.

According to Adediran and Oyediran (2018), the parent’s income or

social status has affected the students' academic performance. This can be further

supported by Olufemio Ladebinu et al. (2018) he explained that students who come
from

low socio-economic family status tend to show a poor academic performance

compared

to students who come from a better family background status.

In the researchers’ honest opinion, financial problems are most likely be

experienced by

families that belongs to the low socioeconomic status since they are underprivileged.

Therefore, It highly affects the education of students that is belong to such families, due

to the lack of educational assistance, and as they cannot afford their academic
expenses,

it will lead to a low academic performance.

Asri et al. (2017) he stated that students who come from a

high economic status are able to have a stimulating learning environment since they
are

surrounded with highly educated people because of their high economic status.

Therefore, the researchers believe that it is possible for those who have a better family
 financial background to excel well and achieve a better academic performance
compared

to those students who come from low-income families, they cannot afford to support
well
their children’s academic expenses, leading to their children’s low academic
performance.

According to Nnamani, Dikko and Kinta (2014), they mentioned that financial

problems of the students extremely contribute to the students’ low academic

performance, which therefore leads to the low quality of education in many ways. That
is

why financial problems lead to the financial stress which will eventually influence the low

academic performance of the students, that statement was supported by Widener

(2017),

he mentioned that financial stress has been consistently related to the students' low

academic performance.

In addition to that, Widener (2017) stated that financial problems lead to health

problems such as anxiety which then leads to negative behaviors such as addiction to

alcohol and etc…, hence making the students lose their focus on their academics.

When students face financial problems to cope with the high cost of living, they are

more exposed and vulnerable to health problems. Therefore, here comes the issue of

whether students who have financial problems can handle the stress of managing their

daily lives and finance.

Indeed, the researchers agree that financial problems among students may also

cause some psychological problems such as depression and anxiety, which may create

some negative coping mechanism such as alcohol addiction and so on.

 In addition to that, Asri et al. (2017) stated that poor financial management could

cause an individual unable to control the stress and thus it affects their daily life such as

health by making them depressed and becoming physically ill. He further stated that

one of the causes of stress among students is because of their financial problems in

which the students tend to feel dizzy and have anxiety that will eventually create tension

with them.

In other words, based on the researchers’ understanding, financial problems

leads to various problems such as psychological and physical problems that will

eventually affect the students’ academic performance.

Another way financial problems could affect the students' academic

performance is stated by Widener (2017), he stated that in order to overcome the

financial problems, most students make a decision of having to work part-time and even

working for a long hours, which takes away their time focusing on their academics.

Hence, having a part-time job leads to a lack of studying, taking less studying hours and

also poor attendnce resulting in their poor academic performance.

According to Dang and Bulus (2015), stated that many Americans are affected by

the economic downfall. Even college students often worry about their finances, which

then this financial worry may affect their academic performance as the students are

dividing their attention between financial and academic. Hence this can be stated that

the family's finances are motivation and encouragement for the students to have a good

academic performance. Asri et al. (2017) supporting Dang and Bulus Statement, added

that when a highly motivated student encounters a financial problem, the student will
turn the problem into motivation for them to achieve success. Therefore, whatever

problems that come, which include financial problems, should not hinder the students if

they want to succeed academically.

Based on the researchers’ understanding, financial problem among the family

can be a discouragement or a motivation for students. When students felt that it is hard

to continue their studies due to financial problems that is when it became a

discouragement. But if students keeps on thriving amidst the financial problem among

their family, that is when it became a motivation.

STUDIES

LOCAL

Koposko and Perez (2016) conducted a comparative study about “The

significance of financial awareness” on students in Mandaluyong Science High School

and students in Jose Abad Memorial School and the findings shown that young adults

from both schools were only moderately confident in their coping mechanisms towards

financial problems that their families are facing. These same students were all highly

aware of their low academic performance in their academics in school due to their lack

of financial support and lack of knowledge on how are they going to manage their

allowances and finance correctly and wisely.

Indeed, as we researcher believe, that financial awareness is important especially

if there is a financial problem that lingers among the family. The awareness of students

towards financial problems and the awareness of the importance of learning how to

handle their finances can help them to create some coping mechanisms that will help
them to maintain their academic performance in school such as spending less, keeping

tracks of their spending, limiting on how much are they going to spend within the day

and saving. These strategies should be further be developed as it helps them to cope

up with the presence of financial problem among their families. Further, it will also help

them to maintain their performance in their academics.

Further, according to the study, “Analysis of the effects of low parental

socioeconomic status among students” conducted by Oman Trisna & Ade Candias (2020). They

administered the study among 266,817 Senior high students within 187 Public schools.

According to the findings of this study more than half (61.76%) of the total respondents scored a

mean which is equal and above the expected mean (20) on their financial stress score. The

observed mean (21.8235) was obviously higher than the expected mean and this suggests that

the students who participated in this study have a level of financial stress due to financial

problem and the lack of financial awareness that is above the expected mean score. A stress

that comes due to a student’s financial strain or problem caused by the low socioeconomic

family status affects his/ her academic performance as the current study revealed. Participants

were asked to rate their level of agreement on the item that was provided to evaluate their

perception about the effect of financial stress on one’s academic achievement. About 31

(55.9%) of the respondents strongly disagreed and disagreed while about 25 (44.1%) of the

respondents agreed and strongly agreed on the given statement. Although, it is the number of

respondents who believe that financial problem due to the low socioeconomic family status

doesn’t affect one’s academic performance

Based on our understanding, as students come from a low socioeconomic

family, they are tend to be exposed to the different factors that hinders their academics,

such as poverty and financial problems such as lack of financial support, lack of
financial awareness and that they are also surrounded by people, friends, or family

members that did not finish or excel in their academics due to the lack of financial

support. Further, since they are belong to a low parental socioeconomic status, they

also tend to be surrounded by people that also belongs to families that has low

socioeconomic status.

According to the study “Relationship between socio-economic status and

Academic Achievement and Performance” by Emilio Andrabi & Jaben (2015). The

descriptive method of research was adopted to study the academic achievement and

performance of 564 adolescent students from 12 schools of Northern Mindanao from

middle-class socioeconomic family status and low socioeconomic family status. The

academic achievement of the students and socio-economic status was assessed by

employing Socio-Economic Status Scale (SESS). Descriptive statistics from table 2

gives mean and SD scores of academic achievement and performance of students

belongs to middle-class socioeconomic family status and revealed that males (M=47.11)

have better academic achievement and performance than females (M=45.51). It also

showed that students that comes from middle-class socioeconomic family status have

high academic achievement and performance (M=48.28) than students from low

socioeconomic family status (44.48). On the basis of the results it is concluded that

socio-economic status is a very important factor in academic achievement and

performance irrespective of category and gender. It tends to explain and predict the

performance of both students’ family status as well as males and females. The relation

between the two variables clearly indicated that academic achievement will improve
with better socio-economic status and will deteriorate with decrease in socio-

economic status.

According to the study "Determinants of Financial Problems among Students” by Jan Kahel

(2013). The sample of the study consists of five public and private universities and four colleges

in Philippines. Primary data were collected through self-administered questionnaire. For each

college and university, 25 students were randomly selected. Path analysis (PA) was used to

examine which factors had major effects on the financial problems students. The results

presented in Table 1 show estimates of coefficients for factors directly predict financial problem

among students. Results showed that taken jointly all five factors envisage 38.6 % of variance in

financial problem (R = 0.386). Spend thrift attitude (b=0.201, P<.00), secondary socialization

agents (b=0.156, P<.001), financial socialization (b= 0.104, P<.00), and financial behavior (b=

0.080, P<.002) had a constructive outcome on financial problems while conservative attitude

(b= -0.140, P<.002) had negative results on financial problems. The study concluded that

Financial Socialization squanderers attitude (like to spend money irresponsibly), and secondary

socialization agents (peer group, relative and other media), have strong indirect effect on

financial problem through financial behavior among students. The results indicate that in order

of priority, squanderer attitude, secondary socialization agents, conservative attitude, financial

socialization and financial behavior, directly anticipate financial problems among students. In

addition, the results of indirect effects suggest that, financial socialization, squanders attitude,

financial awareness and secondary socialization agents indirectly effects the financial problems.

Therefore, economic socialization is the main step in providing financial awareness,

financial behavior and, therefore, future economic behavior noted that financial problems

are frequently the foundation for divorce; emotional stress, Mental illnesses, such as isolation,

lowers self-esteem and depression. The effect of economic socialization financial position,

financial literacy and financial behavior financial problems among students, Understanding the
factor that can affect the financial problems for students will be constructive in helping to plan

additional successful financial education programs to organize students to be successful

personal financial managers as they address the financial problems among the family

FOREIGN

Furthermore, Khabane (2016) according to his study ‘The effects of tertiary

students' financial problems on academic performance’ a further sample of 36

purposively selected students was drawn for a questionnaire survey to triangulate

findings from the personal interviews. The questionnaire asked students what they

would recommend in order to remove disadvantages suffered from financial problems.

Multiple response options were possible. It is perhaps surprising to note that only 61%

of suggested that tertiary education should be free of charge. Respondents who

recommended that more interventions strategies should be put in place to assist

students comprised 44.4% and 47.2 recommended that the interventions strategies

should include fund raising campaigns for needy students . Those who recommended

that NSFAS needs assessment/selection criteria should be revised constituted 11.1%.

2.7% of students fell under the category (others option’) . Results of the study show that

due to financial problems, the students encounter problems such as inability to cope

with the high standards of studying as well as difficulty in paying fees and accessing
basic needs. Data gathered from the interviews and surveys insinuates that financial

problems have adverse effects on students’ academic performance. In conclusion, it is

recommended that, more policy research is needed to come-up with alternative policy

solutions and to make adjustments to existing measures intended to cater for the needs

of students from disadvantaged backgrounds.

In addition to that, Heckman, et al. (2014) he conducted the study ‘’Factors related

to financial stress among college students”. Not having enough money to participate in

the same activities as peers had the largest positive effect (OR=5.708) on reporting

financial stress. Students who regularly spent more than they could afford by using

credit or by borrowing were significantly more likely to report financial stress than those

who did not regularly overspend (OR = 2.201). Students who were not able to pay their

bills on time were significantly more likely to report financial stress than students who

did pay their bills on time (OR = 1.698), students with high GPAs (above 3.0) were

significantly less likely to report financial stress (OR = .755) than students with low

GPAs. Lastly, students who were optimistic about their financial situation in the future

and who believed they would be able to support themselves after graduation were

significantly less likely to report financial stress (OR = .819 and .771, respectively) . The

results of the proportion tests and multivariate logistic regressions showed that most

important financial stressors are not having enough money to participate in the same

activities as peers and expecting to have higher amounts of student loan debt at

graduation and has a low Academic Performance. The results also indicate that

students with higher financial self-efficacy and greater financial optimism about the
future are significantly less likely to report financial stress and performed an excellent

Academic Performance.

Azer and Siti Aishah Mohamad (2018) conducted a study “Financial problems,

management, practices among students”. The data are gathered using primary sources

which is by distributing self-administered questionnaires to the targeted groups. A total

of 400 sets of questionnaires were distributed with 369 completed sets were received. A

purposive judgmental sampling design was employed to investigate financial problems

and financial management practices among the student by using a five-point Likert

scale. From the descriptive analysis, it is found that the ratio of male to female

respondents is at 35.2 percent and 64.8 percent respectively. The programs are ranging

from BM111 (Business Studies) 21.1 percent, BM119 (Banking Studies) 18.7 percent,

AM110 (Public Administration) 14.9 percent, CS110 (Computer Science) 17.9 percent

and CS111 (Statistics) 27.4 percent. Most of these respondents are utilizing student’s

loan in financing their study with a total of 228. The other sources of fund are from their

parents (48 students), mother (21 students), father (54 students), siblings (9 students),

and own money (7 students). Only one student has monthly income as a source of fund

during the study. The data from Table 1 shows that the highest mean score of the

financial problem is due to the inability of students to afford academic expenses. The

lowest mean score for financial problem among student is spend money for cigarette.

The result was obtained because of the influence of a twofold number of female towards

male students. The result from this study contributes to the university and particularly

the academia to know the students’ financial management practice and financial

problem to educate them in making a correct financial decision in future. Financial

education is pivotal and becomes the key to decrease financial problems, especially

among students. Educational institutes must be aiming for a decent financial education

to be nurture among these students.

The study “A Study on Financial Problem and Coping Strategies among Students

in Rift Valley University, Ethiopia “, conducted by Alebel Addis & Temesgen Tadesse

( 2018). Probability sampling method specifically simple random sampling technique

was used to identify the participants of this study as well as to give them an equal

chance to be involved in the study. From each section, the researcher took 28(18

females and 10 males) students randomly. Therefore, the analysis was done for 56

participants of the study. : A total of 56 first year accounting students from Rift Valley

University 6 kilo branch filled out the questionnaire. All of the distributed questionnaires

were found complete and used in the analysis. The demographic details of the

participants are presented in the table below. As shown above in Table 1, female

participants were 36 (64.7%) and the rest 20 (35.3%) of the participants were males.

Thus, the number of female and male participants was not equal. The number of female

participants is greater than that of the number of male participants. In terms of highest

level of educational status, about 46 (82.1%) of the total participants of this study

reported that, they have achieved Grade 12; only about 10 (17.6%) of the total

respondents have achieved Certificates of Diploma. As indicated in the same table

above, about 38 (67.6%), 18 (32.3%) of the participants reported that their finances and

allowance are insufficient. As it in indicated above in Table 5, respondents were asked

to rate themselves on the statement which says, “I believe that my own financial

situation affects my academic performance”. The number of respondents who strongly

agreed and strongly disagreed was found to be equal. From the total respondents those

who agreed and disagreed on the given statement were 2 (2.9%) and, 8 (14.7%),

respectively. In this case, the effect of financial stress on academic performance of

those students should not be ignored. As it is shown above in Table 6, about 13

(23.5%), 9 (26.5%) and 28 (50%) of respondents reported than they often applied

asking loan from family/friends/others, sharing their worries to others and, pray to

God/Allah as a coping strategy to manage financial stress respectively. From these

results, the current researcher concluded that pray to God/Allah was the best coping

strategies of stress that resulted from one’s own financial problems and it was applied

by half of the participants. Therefore, it is pray to God/Allah, which was found to be the

most commonly reported coping strategy of financial problem causing financial stress.

According to the study “Financial Adaptation Among College Students: Helping

Students Cope with Financial problems” conducted by Joyce Serido, Soyeon Shim &

Tang (2014). web-based survey data (Time 1; T1) from first-year college students (N =

748, 65% women) enrolled at the university during spring 2008, prior to the global credit

crisis, and again in spring 2009 (Time 2; T2). The majority of the students were White

(67%), followed by Latino/a (14%), Asian/Pacific Islander (11%), Black (3%), and Native

American (1%). Ethnic group identification was reported as other or was missing for the

remaining 4%. Representation by parental socioeconomic status (SES), measured as

parents’ education and income, included 44% lower SES, 32% middle SES, and 24%

higher SES. 1 (zero debt), 2 (greater than zero but less than or equal to the M), 3 (M

plus 1 SD), 4 (M plus 2 SD), and 5 (more than 2 SD above M). Change in debt was

calculated as 7 the difference between T1 and T2 debt levels. Perceived impact of the
financial crisis, designed for the T2 survey, was measured at T2 only on a three-item 5-

point scale (e.g., to what extent has the recent economic decline affected the way you

manage your money, coefficient alpha 0.85). The analyses controlled for both gender

(male = 1; female = 2) and parental socioeconomic status. They found that change in

perceived financial stress was the most robust indicator of change in financial coping

behavior, with greater increases in financial stress, they found that college students

changed their financial behaviors in response to changing financial demands. Their

findings, however, demonstrate that perceived change in financial strain, but not change

in objective financial debt, prompted change in financial coping behaviors.

Synthesis of the Related Literature and Studies

As far as the related literature and studies were concerned, the researchers

conformed to the Ideas in the aforementioned Literature and studies that Financial

Problems among students negatively affects their Academic Performance in many

ways.

LITERATURE

LOCAL

According to the Related of Literature of Allan Corran (2013), Salma (2013),

Masselle (2015), and St. James Colleges of Antipolo City Inc. (2018), and Archuleta

(2013) students must be financially stable in order to perform well academically since

financial problem highly affects their Academic Performances. Further, many poor

students from low-income families do not have enough money to afford sufficient food

that also affects their Performance in school or in their Academics. They stated in which
we researchers highly support that, the best way to solve Students’ financial problems is

to make good decisions in their lives and to spend money wisely only to necessary

expenses. In addition, it is also highlighted within their study that in order to pursue their

education, they are forced to divide their priorities with working and studying which

results for them to perform poorly in their academics.

FOREIGN

The review literature of laili and Saad (2017), Asri et al, (2017) Nnamani, Dikko

and Kinta (2014) and Dang and Bulus (2015), as previously stated, students who lack

financial support struggle, especially when it comes to meeting their educational

demands. Some students are thus compelled to work to meet their expenses and other

necessities. And also, according to Adediran and Oyediran contend that this means that

socioeconomic position or a student's parents have an affect on their ability to succeed

academically. According to Olufemioladebinu et al. (2018), Students from low

socioeconomic backgrounds generally have poor academic records.

STUDIES

LOCAL

According to the studies of Oman Trisna & Ade Candias (2020), Emilio Andrabi &

Jaben (2015), both studies focuses within the effects of low socioeconomic family status

among the academic performance of students. They highlighted the fact that having low

socioeconomic family status hinders the opportunity of students to excel with their

studies and academics due to the lack of financial support to sustain their education,

leading to a low or poor academic performance. Further, according to the studies of

Koposko and Perez (2016) & Jan Kahel (2013), Financial awareness is the key for

students to address the financial problem that they are experiencing along with their

families. Is is said that being financially aware can lessen, avoid or eliminate, not just

the financial problem but also the financial stress.

FOREIGN

According to the related studies of Khabane (2016), Heckman, et al. (2014) and

Azer and Siti Aishah Mohamad (2018). They focuses on the effects of financial

problems to the well-being of the students and to their academic performance such as

financial stress. They also mentioned the factors that affects the academic performance

of students that has relations with the financial problems that they are experiencing

such as peers, and coping mechanisms. Also, according to the studies of Alebel Addis

& Temesgen Tadesse ( 2018) and Joyce Serido, Soyeon Shim & Tang (2014), their

studies focuses on how students cope with the Financial problem within their families as

they continue to nurture their studies. Their studies showed different ways on how

students cope with such difficulties, such as praying to god and sharing their worries to

others. In order for them to maintain their wellbeing towards their life and towards their

academics.