Shocking student debt levels

Students are reaching record debt levels of almost £6,000 per year and many will leave university owing more than £17,500 according to a survey.

Being a student is synonymous with being in debt. Juggling financial concerns with study is a fact of life for the majority of students at University.

The survey that was carried out by Push.co.uk, shows a shocking and bleak financial outlook for students who began University in the first year of the Government’s top-up fees. The survey highlighted that these students incurred debts of £5,586 in their first year, 25.5% more than that of students who began University in the previous year.

Johnny Rich, Series Editor of Push.co.uk said: “It is easy to become immune to stories about student debt, but this increase is not just another rise. Some students are facing real financial hardship.”

The Student Loan Company provides students with an undoubtedly cheap form of finance. However, even with repayments, which are set at 9% of income above £15,000 these loans will take many years to repay.

Although students may be happy to avail of such a cheap form of finance it is obvious that this debt will have a long-term effect. Graduates who want to get an early footing on the property ladder will find repaying their student loan a particular struggle.

For a graduate earning £20,000, whose income increases at 4% per annum, it will take some 13 years to repay a student loan of £10,000 and 21 years for a loan of £20,000.

A study by financial experts on uSwitch.com estimates that it will take the average student 11 years to clear their debts.

Many students are taking on part-time work in order to help finance their studies.
Student, Siobhan Gallen said: “I worked part-time in a shop to fund my education. I ended up getting a 2:1 but if I hadn’t had to work I think I would have got a first.”

It is clear that the rising debt students face is having a negative impact on their studies. Many students are working in paid employment when they have university work to complete and therefore their marks are paying the price.

There are some steps that students can take in order to reduce their debts. UCAS.com provide some advice for students who are trying to budget.

Use your student discount card. In some shops when you show your student card or NUS card you may be entitled to discounts for various products, which could help save money.

Secondly, there are many opportunities for part-time work at the university or college where you study - every higher education institution has a students' union, which employs both undergraduates and postgraduates, so you could earn money whilst becoming involved in the current issues that affect student life.

Try to avoid cash machines that charge for withdrawing money. Some cash machines will charge you £1.50 so you could be losing valuable cash for no reason. There may be a no-charge cash machine just around the corner, so it is wise to find out which ones charge and which don't.

Insure your property. Students run a very high risk of burglary, so insuring your property is a must. You can choose what you wish to cover, such as clothes, TV and iPod, for example, and the cost depends on where you are living and what you insure.