Debt affecting the lives of many students

There is little doubt that the high levels of debt that students have to get into in order to get an advanced education have affected their abilities to do many things in life. For many people that leave university with high levels of debt the next decade or more could be spent focusing on repaying the debt, with everything else having to be put onto the back burner.

A study that was recently carried out has revealed the extent to which many students are having to put their lives on hold in order to focus on their student debt after leaving university. As a double whammy, many now not only face the prospect of having to spend over a decade repaying their student debt but also face very bleak prospects of getting a high paid job because of the current climate.

Uswitch.com carried out research to show how many students are having to put their lives on hold in order to repay their student debt. Over 30 percent had been unable to start a pension when they wanted to according to the reports and nearly 50 percent had been forced to put off buying a home. Nearly 60 percent of students had been unable to save money because of their debts and close to 30 percent had delayed plans for marriage.

One industry official said: “The fact that graduates have to put their life on hold because they are knee deep in student debt is a sorry state of affairs. And as fees go up, students risk running up even bigger debts. But without a degree, getting a job in today’s stagnant market may be even harder.”

He added: “Going to university used to be the norm, but it is now becoming a catch 22. It is also worrying that students are going to university blind to the financial implications. Higher fees and lack of job prospects may be out of your control, but if university is right for you it’s more important than ever that you are as financially prepared as possible.”

Tags: fact, Higher fees, official, Student loan, life, study

Students in line for loan rate shock

It has been claimed that many students that are studying at university in the UK could be set to face a loan rate shock, with interest rates on student loans set to increase as a result of the rise in inflation levels. Students already face a tough time when it comes to being able to afford everything they need whilst studying at university, but if interest rates do increase the situation could get even worse for many of those studying in the UK.

This week it was reported that the level of inflation had increased to 3.4 percent, which is 1.4 percent higher than the government’s target of 2 percent. The increase in inflation was said to have been driven by price increases on things such as petrol, food, and energy compared to last year when prices on these products and services were falling.

The interest rates on student loans are increased by the Student Loans Company each September based on the level of RPI inflation seen in March of that same year. According to reports around three million students as well as graduates could see their rate of interest increase when September comes around. The rate of interest that students are paying on loans can vary based on when the loan was taken out.

In addition to facing increased interest rates on loans students are also up in arms about the lack of clarity over student funding and university fees from the three main political parties in the run up to the general election. Student unions have accused parties of failing to provide clarity over these issues and hiding behind a review that was carried out last year in order to avoid having to go into too much detail about their policies with regards to this matter.

Tags: finance, government's target, education, Monetary policy, time, main political parties, Student loan, interest

Graduates urged to prioritise costly debt

Graduates may have to put up with student loans but credit card debt should be paid off as quickly as possible, an expert has urged.

Richard Brown, chief executive officer of financial information website Moneynet.co.uk, remarked that university leavers have a considerable period in which to repay their student loan and should prioritise the repayment of more expensive debt first.

He explained that student debt is “a fact of life unfortunately, whereas carrying big wads of debt on a high interest credit card isn’t”.

Mr Brown made his comments after his organisation published advice to students, urging them to stop “fretting” over the amount they owe through normal student debt and to concentrate first on paying off their most expensive borrowing.

Recently published figures compiled by Credit Action showed that at the end of April, total levels of personal debt in the UK stood at £1,436 billion, an increase of £110 billion compared to 12 months previously.

Tags: credit, consumer debt, information, Student loan, debt, expert, expensive debt first.He

Parents forking out for offspring debt

Some 7.5 million parents are having to financially support their adult children, new research has found.

A MoneyExpert survey found that 40 per cent of parents with adult children have to help out with debt problems, with some £2,540 being paid per family on average.

Mobile phone bills and car finance were the most popular debt types that 24 per cent of parents have helped to cover the cost of, closely followed on 23 per cent by credit card bills.

Overdraft finances on 20 per cent and student loan debts on 15 per cent also featured as the fourth and fifth most common types of debt.

MoneyExpert chief executive Sean Gardner commented that the figures reveal that child expenditure is now a financial burden for many parents even when their kids reach adulthood.

“With the cost of living so high at the moment and with so many people living a buy-now-pay-later lifestyle, parents are often forced to help out with their children financially in later life,” he added.

Recent statistics from the debt charity Credit Action reveal that the average graduate debt for adults under the age of 30 is £12,363, but the figure represents both a decrease of £889 on 2006 and the first drop in graduate debt for six years.

Tags: adult, Parent, credit, Credit card, Financial services, adult children, graduate debt, Student loan