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Chapter 2


This chapter represents and discusses related literature and studies taken from

different sources and data that could substantiate the theoretical bases and information

assisted in conceptualization of the study. This includes foreign literature, local literature,

foreign studies and local studies.

Foreign Literature

Based on descriptive statistics from responses of the 2003 (Y03) cohort LSAY,

financial reasons do not appear to be main drivers of the decision to withdraw or defer

study. Few of them deferred and withdrew their studies from the studies (255), but those

who did, only 6% indicated that they did so because they could not afford to continue.

Interestingly, 13% deferred/withdrew from study because of problems associated with

juggling work and study commitments. But the main reasons were due to personal or

health reasons (17%), and losing interest in the course (16%).

On the other hand, Shim et al. defined healthy or positive financial behavior

indicators as the set of desirable behaviors that help young and adults achieve the

financial, economic, and interpersonal goals that are important to them. Behavior such as

awareness of debt owed, checking for the lowest interest rate before borrowing, saving,
budgeting, and keep financial goals have been shown to be positively related to lower

reported levels of financial stress and increased financial well being (Gutter, Garisson &

Copur, 2010; Xiao et al., 2009). There is also some evidence to suggest that one’s

perceived mastery and /or sense of control is linked to better financial behaviors (Perry &

Morris, 2005). College students who believe that outside forces determine their future

outcomes tend to exhibit worse financial behaviors, such as difficulty paying monthly

obligations (Britt, Cumbie & Bell)

According to Paulsen & St. John (2002), “Financial stress, such unmet need, have

been correlated with dropping out, particularly among low income students.”

Also, Rosss, Clelad, & Macleod (2006), said that financial stress may also lower the

academic performance.

In Scott-Clayton’s study (2012), he said that over the pass few decades, more

traditionally age students are working and working substantially more hours. Therefore,

an increasing number of the students must balance the need to work to pay for the college

and the need to study.

In Shim et. al (2010), defines healthy or positive financial behavior indicators helps

the young adults to achieve the financial, economic, and interpersonal goals that are

important to them.
In addition of the Gutter, Garrison & Copur (2010), behaviors such as awareness of

debt owed, checking for the lowest interest rate of borrowing, saving and budgeting are

resulting into positive outcome such as lower rate of being prone in financial stress.

Foreign Studies

In American College Health Association (2013), accordance in their study, college

students are frequently experience financial stress. According to recent national survey,

35% of said their finances were “traumatic” or “very difficult” to handle.

The survey of Trombitas (2012), was focused specifically on financial stress and

found that four of the five most common stressors among students related to their

personal finances.

In Inceptia’s study (2012), students,both those enrolled & ones who have recently

graduated, are under high level of stress. A number of factors contribute to students stress,

but very prominent are those related to student finances. Aside from this, the study shows

that one third of respondents said stressors have had a negative impact on their academic


In the survey of National Survey of Student Engagement (2011), seventy four percent

of respondents are working during the academic year, the 15 percent of students are

working full - time.

In Cooperative Institutional Research (2010), today’s incoming college students are

reporting high levels of poor mental health than ever before & financial stress is an

emerging is within this trend.

In Northern, O’rien , & Goetz (2010) study, financial stress defines as the inability to

meet one’s economic responsibilities and is influenced by attitudes, beliefs, and other

psychological factors.

In relation, Robotham (2008) found that a significant number of studies revealed that

“levels of stress are on the increase amongst the higher education student population”

The Inceptia Financial Stress survey was designed with the underlying assumption

that personal finances are a source of stress for college students and sought to provide an

in-depth look at the specific financial stressors impacting degree or credential attainment

and academic performance.

Local Literature

For us to further understand one’s stress, Blonna (2010) pointed out that one needs to

know what it is and it causes, in order cope with it well. He claims that students expe -

rience stress since some are trying to cope up with the demands of adapting to a new

living environment, new peers, academic pressure, and sexual concerns. Being in college

can also put financial stress on the students and their families.

In his study, Asgari (2008) concluded that there is no significant relation between

mental health and academic performance both among male students and among female


Local Studies

Cooley’s “Symbolic Interaction Theory “ as adapted by Basibas (2000) claims that

individuals are capable of creating solutions to their problems. It adheres that the “self” is

influenced and shaped by social processes, in this instance “stress”, and the capacity to

symbolize. Human action caused by complex interaction between and within individuals.

On the other hand, Duque (2007) cited common effects of stress. Theses are

insomnia, headaches, backaches, constipation, diarrhea, high blood pressure, heart

disease, depression and alcohol, tobacco or drug use.

Another one is Salvacion (2004), who studied the stress profile of students in the

College of Dentistry of the University of the Philippines, Manila. Academic stressor like

examinations and grades, full loaded days, difficulty in completing clinical requirements,

and fear of getting delayed topped the identified stressors.