Credit and debt news
Student debt to reach new high
15 August, 2007
Students who started university last year can expect to owe nearly £17,500 by the time they leave, and many new students are likely to face debts of over £20,000.
The annual student finance survey conducted by Push, the UK;s leading independent resource for prospective students, has found that student debt now tops £4,000 for each year of study – a hike of nearly a quarter since last year.
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There is a considerable variation between individual universities. The national average projected debt on graduation stands at just under £13,000, but at nine universities, the figure has already broken the £20,000 barrier.
The introduction of ‘top-up’ fees is reflected in the figures for the first time and the rise corresponds closely to the fee increase, suggesting that students; other costs have not risen significantly.
Prospective students about to receive their A-level results may therefore draw some comfort that the figures are no higher than feared and lower than less thorough surveys have forecasted.
The different funding arrangements around the UK are also reflected in the data. In Scotland, which has the most generous funding system, debts are lowest – an average of just £2,344 a year – which, even allowing for their four-year courses, means it is the only part of the country where the projected debt on graduation remains under £10,000.
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Meanwhile, with an average of £4,295, students in England owe £198 for each year over the national average. At 25.5 per cent they have also seen the largest increase in the past year.
Catherine McGrath, Lloyds TSB, said: “Students face higher levels of debt than ever before and with the added pressures of escalating house prices and increased competition for graduate jobs, it’s essential that they find ways to keep their student debt to a minimum.
“Good budgeting skills can really help students to start off on the right foot while they get to grips with managing their own money. A smart approach is to plan ahead and seek guidance now on how to manage your finances to avoid getting into trouble later on.”
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