Many students who expect to graduate this year will have debts of £25,000 or more to dampen their enthusiasm as they seek to enter a less than buoyant jobs market. Surveys have found that half of those graduating expect that it will take ten years for them to repay their student debts while one in ten think it could take twenty years. With tuition fees inexorably increasing year on year, average student debt could rise to as much as £80,000.
The National Association of Student Money Advisors who recently organized National Student Money Week seeks to provide practical support to students in further and higher education by offering tips on student loans, budgets, borrowing and protecting credit status.
Student Loans
- Provided by The Student Loans Company to cover tuition fees and living expenses
- Interest rates linked to inflation and therefore relatively low
- Loan repayment to commence after graduation, provided gross income exceeds £15,000 p.a.
- After 25 years (from the April following completion of course) loan balance written off
- Student loans survive bankruptcy and IVAs and are still re-payable.
Budgets
- Prepare a (student) household budget and stick to it
- Avail of NUS card discounts
- Buy own brands food in bulk and shop in markets. Cook, eat and drink! at home if possible
- Acquire free furniture and household goods using small ads
- Use price comparison sites for cheapest utilities, insurance etc
Borrowing
- Avoid borrowing more than you can afford to repay
- Make repayments on time
- Ensure household bills are not just in your name – make friends share the burden
- Using a credit card and repaying it every month will help to build credit history
- Obtain advice from your NUS rep, your student union or CAB
Credit Status
- Check your credit report. Look up Experian who may provide a free credit report
- Register to vote and use that address for credit applications
- Apply for credit discerningly – too many ‘willy-nilly’ applications may raise doubts about you and you may be judged by lenders as being desperate
- Keep an eye on your credit score. A high score will get you better deals and lower interest.