Students face bleak debt ridden futures

As many people know from personal experience, being a student these days can be a costly affair, with many of those that are keen to get a further education to improve their job prospects having to put themselves in huge amounts of debt for the privilege. Whilst in years gone by students could justify getting into this amount of debt because of the improved job prospects that their advanced education would give them the students of today are having to face a double whammy of getting into a lot of debt and still having bleak prospects when it comes to jobs.

Research that was published recently indicated that many graduates face a bleak future, bogged down with a load of debt that they have had to take on to get their further education and affected by bleak job prospects despite having an advanced education. The data showed that it now takes an average eleven years for students to clear their debts after leaving university. On top of this, nearly 40 percent of students have been forced to put their lives on hold as a result of these high debt levels.

The research was carried out by uswitch.com with the results showing that close to 60 percent of students had been unable to save money because of their debts and nearly 50 percent had been forced to put off buying a home, further pushing up the average age of the first time buyer in today’s market. Over 30 percent had been unable to start a pension when they wanted to and nearly 30 percent had delayed plans for marriage.

One personal finance expert 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.”

Tags: jobs, Student, Financial Services, s market, high debt levels, education, research, first time buyer

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Posted in: bleak,futures,ridden,Students

Study reveals students feel positive about debt problems

A study conducted by Ohio State University in America has yielded some surprising results relating to the way young people view their debt problems.

The research was conducted by Rachel Dwyer, who is an assistant professor of sociology at the Columbus-based university, along with colleagues Randy Hodson and Laura McCloud. It looked at the attitudes of 3,079 young adults from all parts of the country towards acquiring debt whilst at university.

Rather than feeling stressed or anxious because of the money they owed through student loan and credit card debt, the young people included in the study actually felt quite empowered by it. In fact, the larger the debts these people had, the greater their self-esteem was and the more they felt they had control over their lives.

Lead author Rachel Dwyer explained this surprising outcome, saying that debt could be a positive for young people as it gives them the financial support they need to achieve their goals, such as getting a degree.

She also pointed out that for some types of debt, such as credit card debt, students may feel positive about it only because it allows them to buy the non-essential things they want or need, without the need to delay gratification by having to save up.

Dwyer said: “We thought educational debt might be seen as a positive because it is an investment in their future, while credit card debt could be viewed more negatively.

“Surprisingly, though, we found that both kinds of debt had positive effects for young people. It didn’t matter the type of debt, it increased their self-esteem and sense of mastery.

“Some young people may be using credit card debt to help finance their college education – for items like textbooks – which is why they may see it as a positive. But there is no way to know that from the data.

“Obviously, they are probably using credit cards for multiple purposes. Along with education spending, they could be using credit cards to pay for non-essential items.

“They may feel good about their debt only because it allows them to buy the things they want without having to delay gratification.”

However, this attitude to debt may also be a dangerous one, as Dwyer explains in the study:

“Young people seem to view debt mostly in just positive terms rather than as a potential burden.”

“By age 28, they may be realizing that they overestimated how much money they were going to earn in their jobs.  When they took out the loans, they may have thought they would pay off their debts easily, and it is turning out that it is not as easy as they had hoped.”

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Posted in: about,positive,problems,reveals,Students,Study

Students and Debt

It is no big secret that today?s students will leave university with an average of ?25,000 of debt according to figures on BBC.co.uk.? With the cost of tuition fees rising and the cost of living constantly going up, students are going to be leaving education with more and more debt.

There is no easy way to say this but there is no way of avoiding debt as a student. Unless you are very fortunate to have someone to support you, then you will almost certainly leave university with some sort of debt.

Debts such as credit card debt and loans are a little risky when you?re a student because you need to ensure that you can afford the repayments. : If at all possible it is best? to try and avoid credit cards or additional loans, as they invariably contribute significantly when high levels of debt have accrued after completing your University course, to assist your finances whilst still a student, why not get a weekend job to earn a little extra money?

The most common debt for a student is the student loan. The majority of students will have one of these. Your student loan is collected differently to unsecured loans, you will only starting repaying once you earn over ?15,000 and you will only have to pay a small percentage of your salary which is taken straight from your wages. A student loan is also different from unsecured loans as you cannot be chased for the debt, if you do not earn above the threshold they cannot demand money from you and if you are paying towards it, they cannot demand more from you.

Other top tips:

Cook your own food, cut down on the takeaways and make yourself some proper home cooked meals.Have a night in; instead of going out every night why not put on a DVD with your friends.

If you have already graduated from university and are one of the thousands with stacks of debt then you need to get free and impartial debt advice. You need to make a list of who you owe money to and how much your repayments are. You then need to work out your incomings and outgoings to see what you can actually afford.

Student loans or grants are listed as priority creditors and therefore cannot be included in a Debt Management Plan, Individual Voluntary Arrangement, Bankruptcy or a Debt Relief Order. However any other loans (providing they are unsecured) or credit cards that where taken out whilst a student can be included in all of the above plans.

If you are struggling with debts then please call Payplan on 0800 2802816.

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Manual giving debt advice to students to be handed out

Around 430,000 students will be given a manual about how to manage their money and avoid debt problems in the process.

Finance charity Credit Action intends to give its guide on student finance to young people planning to attend university in the 2011/2012 school year.

The average student is expected to graduate with debts amounting to more than £23,000 so the charity has created a guide to inform youngsters about the financial support available, how to budget and how to save money.

This could help would-be students learn how to stay in control of their money and help them avoid debt problems while at university.

Joanna Parsley, associate director of Credit Action, said: "Getting this information and guidance into students' hands before they begin university is key as it allows them to prepare financially, so their university experience can get off to a smooth start."

The All Parliamentary Party launched a campaign on January 31st to make financial education compulsory in schools, to ensure that youngsters learn how to avoid accruing debt problems in the future.
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Students working more to combat debt

It has been claimed in a recent report that students in the UK are increasing the amount of time they are spending in paid employment in a bid to try and combat their rising debts. More and more students are spending an increasing amount of time carrying out paid work so that they can counteract some of the debt, according to the report.

The data for the report was compiled as a joint venture between the NUS and Endsleigh Insurance, and formed part of their Student Lifestyle Report. The research carried out showed that in 2010 students worked on average around fifteen hours a week in paid employment. This compared to thirteen hours a week in paid work in 2008.

The report focused on analysing the lifestyles of students in detail, looking at issues such as their options at university, their finances, their employment, and their overall lifestyles and choices. It looked at students’ attitudes to a variety of issues, including debt management, employment, and social activity.

The research showed that the number of hours students were working and getting paid for tended to increase during university holidays, which is the time when students are meant to get some rest and do some studying for their exams and coursework. However, many have been using these holidays for working to earn some money and keep down debt levels, as the results of the study have shown.

A spokesperson for Endsleigh Insurance said: “University offers a unique opportunity for students to grow and develop responsibilities, both academically and financially. It is perfectly healthy for students to seek paid employment whilst at university and in the holidays, particularly if this relieves financial pressure on living costs. However, it is equally important to make sure that students leave enough time to devote to their academic course in order to ensure they get the best possible qualifications.”

Tags: best possible qualifications, unique opportunity, Colleges and Universities, Labour relations, debts, Employment

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