Students understanding of debt is seriously lacking

Posted by Ben Ryland in Dealing with Debt on 29 November 2016 - Ben is a Senior Credit Analyst at checkmyfile.

Christmas is an expensive time of year. Though for many students, this is just as relevant for most other times of the year too.

Now Future Finance has revealed that a third of UK students are reliant on credit to fund their education while at university. The credit is in the form of credit cards and payday loans. With the notorious high levels of interest on payday loans, this is a worrying state for students to find themselves in. More importantly a very costly one.

Of the 1,000 UK students polled, 31% explained they have used payday loans, credit cards and their student overdraft to pay for educational expenses.

While university may be teaching students anything from forensic science to the law of the land, it doesn’t appear to be teaching students the dangers of over-using and being reliant on credit. In fact, 25% of the students surveyed said they don’t even see payday loans as a form of debt, or the financial implications.

The cost to students of furthering their education has led many to turn to these loans and credit cards as the government funded loans just aren’t covering enough expenses.

Part of Future Finance’s research tested students’ knowledge of finance, including what the term APR stands for, and surprisingly only 60% of those surveyed knew what it stood for. APR stands for the annual percentage rate, which is the amount of interest you’ll pay annually.

While university life is all about new experiences for students and enhancing their understanding of the world, many would have hoped to not fall into a debt spiral so early on in their lives. Brian Norton CEO of Future Finance confirmed this thinking by saying, “It is worrying that significant numbers of students rely on credit cards, payday loans and overdrafts without even seeing them as debt.

”For many students, going to uni is the first time they’re required to stand on their own feet financially. It’s a big change in their life and it can be a steep learning curve.”

Students’ finances have never been as strained as they are today. The cost of a degree in England is at its highest level, and findings from the NUS showing that the cost of accommodation has also increased for students over the last 5 years by 23%.

With students now having to turn to expensive forms of debt just to get by, many have called on the government to do more to help students furthering their education. Though ultimately, better financial management should be taught by parents and schools to children before they reach university. It seems this may be the only way to get a grip on the situation as students’ incomes are unlikely to match their expenditure for many years to come.

Check Your Multi-Agency Credit Report

30 Day Free Trial

If I Pay My CCJ Will It Go Away?

2017 saw the highest number of County Court Judgments (CCJs) issued in England and Wales since records began in 2005, according to official figures by Registry Trust. That means it’s more important than ever to make sure you know what to do if you get issued with one, and how to prevent one appearing on your credit file in the first place.

Published on 23 May 2018 by Ben Ryland

Full Article

Do I Have a CCJ? How To Find Out

A County Court Judgment (CCJ) is generally only issued by a lender once they have exhausted all other attempts to recover an outstanding debt.

Published on 23 Mar 2018 by Jamie Mackenzie Smith

Full Article

Understanding a default notice and what to do when one arrives

No one wants a default on their credit file, but sometimes there’s little you can do to prevent it. Perhaps your household income dropped due to redundancy, you’ve suffered an illness or an unexpected large expenditure has cropped up. Whatever the reason, in times of hardship financial commitments are often among the first things to be affected.

Published on 21 Mar 2018 by Ben Ryland

Full Article

Dealing with debt collectors

Don’t think for a moment that you’ll never see a debt collector in your lifetime. Even if you have a sparklingly brilliant credit file, you could find yourselves facing a doorstep collector.

Published on 19 Feb 2018 by Barry Stamp

Full Article

Does Statute Barred Mean My Debt is Written Off?

If you look around on the internet for debt advice you might see one questionable tip popping up from time to time: ‘don’t pay off your debts, wait six years for it to become statute barred and you’ll be home scot-free.’ If this sounds too good to be true, that’s because it is, and if you think it’ll be without consequence you could be in for a nasty surprise.

Published on 10 Jan 2018 by Tom Magor

Full Article

How Your Credit Score is Affected When a Default Drops Off

If you’ve got one default, you might be counting down the days until it is no longer reported to the Credit Reference Agencies. But if you have more than one, will you see your Credit Score rise as each one drops off of your Credit Report?

Published on 4 Jan 2018 by Richard Catlin

Full Article

What could happen after a county court judgment is issued

Once a court judgment has been issued but the individual still refuses to pay the outstanding debt or come up with an agreement to clear it, the claimant has a number of legal remedies available to them through the court systems.

Published on 16 Jan 2017 by George Coburn

Full Article

Facing Financial Problems

No one should feel like money problems are unique to themselves, we all have to think about money at some point. Financial problems, job security, debt and redundancy are all issues that realistically should be considered. How we react to these factors can impact our lives and our wellbeing, but luckily there are many different facilities that aim to help those trying to cope with money worries.

Published on 12 Jan 2017 by Paul Anderson Riley

Full Article

Consolidating Debt

Do you have what seems a never-ending mountain of debt and you’re struggling to know what you’re paying and to who? If so, you may be considering debt consolidation, in particular a debt consolidation loan.

Published on 9 Jan 2017 by Ben Ryland

Full Article

Don't give yourself a Christmas hangover

If you are concerned about debt during the festive season you should get advice now, warns the National Debtline. 5m Brits worry about money in the run up to Christmas, with one in three adults putting their gifts on credit, and if you are one of them, more debt is the last thing you want for Christmas.

Published on 6 Dec 2016 by Kelly Luff

Full Article
keyboard_arrow_left

keyboard_arrow_right

We have loads of great customer reviews