Avoid getting into too much debt if you are a student
January 30, 2008
Experts are warning today’s students to make sure that they do not get themselves into too much debt, and to keep the long term effects of debt in mind when taking on finance whilst at college or university. Being a full time student can be difficult in terms of finances, and many students end up getting into high levels of debt whilst at college or university, which can make life difficult when they leave education and go out into the ‘real’ world. Experts are therefore urging students to be careful about getting into debt for frivolous reasons.
One industry expert stated: “We are urging all students whether freshers or in their final year to be aware of the potential pitfalls if they don’t take control of their financial affairs. Our experience has shown that taking on credit needn’t be a problem if you manage your finances well and ensure you keep up your repayment.”
She added that many students lose control of their borrowing and finance, and this is where real problems can arise.
The level of student debt in the UK is on the rise, and according to the Halifax many students rely on loans, credit cards, and overdrafts, which can start a spiral of debt if they are not carefully managed. Student debts are already amounting to around £13,000 by the time that the graduate according to some reports, and it is thought that this could soon rise to £20,000. In order to ensure that their debts do not have an adverse effect on their future credit rating, students should also make sure that they make payments on time and for the amounts requested.
Research has shown that around 83% of students have taken out a loan to help them financially. Another 73% have relied on their overdraft facility to help them out, and 43% have used credit cards to give them some financial freedom
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