RESEARCH conducted by a leading credit management company has revealed 76% of students worry about making ends meet while at university, with 41% considering quitting as a result.
Lowell’s research into the debt habits of students found over three-quarters of students (77%) develop personal debt, excluding tuition fees and student loans, during their courses.
The reliance on credit primarily comes through using credit cards, overdrafts, buy now pay later schemes and payday loans.
John Pears, CEO at Lowell, said: “University should be an exciting and rewarding experience, but for those young people who move away from home and can’t depend on money from their family, it can also be a costly one.
“Getting into debt while at university can be worrying, especially if you don’t have a regular source of income or a job secured for when you graduate. We want students to know that they are not alone when it comes to struggling with debt while at university.
“If you are concerned about your situation, there is help and support available. A list of independent organisations who can offer support is available on our website.”
Just under one in ten students rely on payday loans for small amounts of money with an extremely high APR.
The study suggested students who rely on this form of borrowing could end up with ongoing problems with debt, particularly if they intend to pay them off with student loans or grants.
With a 0% overdraft, many students are enticed by what can feel like “free” money. However, after university, many banks will expect students to pay back their overdraft within 1-3 years, putting even more pressure on graduates to find a job in a competitive job market.
Naturally, fundamental expenditure priorities are weekly food shops, rent and bills, but despite the squeeze on finances, 34% of students said they were likely to spend money on nights out, takeaways or going out to eat.
Excluding tuition fees and student loans, graduates leave university with an average amount of debt of £2,332, taking 3.8 years to pay it back in full.
Around 15% of graduates ended university with over £5,000 of additional borrowing. Of all the people surveyed, it took 16% four or more years to pay off the personal debt they had accumulated while at university.
Sheldon Allen, Reading University Students’ Union president, said: “We are working with the university to deliver on a range of priorities in [the cost of living crisis]. We believe that every student should be able to have a low-cost hot meal on campus and that students should be supported if they fall into hardship.
“To work on addressing the crisis, we are collaborating with the university and have launched a new UoR/RUSU Cost of Living Taskforce. The Taskforce is co-chaired by me and Elizabeth McCrum, the pro-vice chancellor for education & student experience. It brings together key people from across the university community to tackle these issues and work towards further supporting students with the cost of living.”
To access support, visit: www.lowell.co.uk/help-and-support/independent-support
