Good evening / 04.12.08
Corporate Solutions
Corporate Solutions
10 August 2007
A-Level results are just around the corner and that can only mean one thing – a whole new set of students will shortly be heading off for their first year at university.
Obviously, moving away from home for the first time and being given more freedom than ever before is an exciting (if slightly scary) experience. Most new students worry about whether they will enjoy their course and if they will make new friends, but few think about how they will manage their money.
However dull thinking about the financial side of university life may be, the latest research from the Association of Investment Trust Companies (AITC) reveals that students are taking on more levels of debt than ever before. This leaves many struggling to repay all their loans and credit cards for years after graduation.
Lee Barnes, a 25 year old graduate from Leeds Metropolitan University, found himself in £60,000 of debt when he left his course. “I was using my money to live the student lifestyle and was taking bank loans to cover my day-to-day expenses, like rent. The problem was I got used to spending money. I wasn’t even aware of how much I was taking on,” says Lee. “It just got worse and worse and I didn’t know where to turn.”
While £60,000 is above the level of average student debt, the way that Lee fell in to debt is an all too familiar tale. Excessive spending on clothes, going out and holidays all add up quickly and, if bought on credit, can leave students with a debt mountain to climb as they leave university and move in to the next stage of their lives.
“No one is telling a student not to have a good time or enjoy the experience of being at university,” says Melanie Mitchley, Consumer Debt Expert from Callcredit. “What we are saying to students is be aware of the potential pitfalls and take control of your financial affairs. If a student does decide they need to borrow money, they just need to be aware of the amount they are borrowing. Recent research shows that nine out of 10 people in the UK manage their credit well so taking on credit is not a problem, as long as you can afford to do so.“
“Our advice to students would be, before taking out a loan or applying for a credit card, just stop and ask yourself, ‘can I really afford this additional credit?’ Also, take a look at a copy of your credit report, as it will help you get an overall picture of the current state of your finances and help you decide if you really can take on any more credit,” Melanie adds.
* Source Student Loans Company Provisional 06-07 figures (released 12th June 07). The balance outstanding (including loans not yet due for repayment) at the end of financial year 2006-07 was £18,116.3m (of which £17,043.4m relates to income contingent loans).
ENDS
For further press information contact: Jane Fordham, Katie Moore or Sophie Smith at the Callcredit Press Office on 0207 067 0600 or callcreditpr@golinharris.com
