Students and debt | Debt Awareness Week

Debt Awareness Week is a yearly event designed to raise awareness and understanding about the impact of debt on individuals and society. For students at university in the UK, this week is particularly important, as the cost of education and living expenses can result in significant debt burdens. In today's article, we explore the kinds of debt you're most likely to wrangle, how debt affects students, and our top advice for staying solvent as a student.

Types of debt

Being a student is an exciting time, but it can also be a time when you start to rack up debt. One of the most significant sources of debt for students is student loans. These loans are available to cover tuition fees and living expenses and are repaid once the student graduates and starts earning a certain amount of money. While these loans offer a more accessible path to higher education, they can still result in significant debt burdens. It's essential for students to understand the implications of this debt and to manage it effectively.

Another source of debt for students is credit cards and store credit. While these can offer short-term financial flexibility, they can also lead to long-term debt if not managed carefully. It's easy to get carried away with spending on credit and end up with a debt that's difficult to pay off. Students need to be aware of the potential risks and understand how to manage their credit responsibly.

Impact of debt

The cost of debt isn't just financial; it can also have a significant impact on mental health. Debt can be a significant source of stress, anxiety, and depression, which can affect academic performance and overall wellbeing. It's important for students to be aware of the potential impact of debt on mental health and to seek support if needed.

Debt management at university

So, how can students manage their debt effectively? The first step is to create a budget and stick to it. This budget should include all sources of income and expenses, including tuition fees, rent, bills, and living expenses. By knowing exactly how much money is coming in and going out each month, students can identify areas where they can cut back and save money.

Next, apply for scholarships and grants. There are so many resources available to help students pay for uni. Don't be afraid to do some research and apply for as many scholarships and grants as possible.

Live within your means. It's tempting to want to keep up with your peers, but it's important to remember that everyone's financial situation is different. Don't feel pressure to live a lifestyle that you can't afford.

It's also essential for students to stay on top of their debt repayments. For credit cards and store credit, it means paying off the balance in full each month or at least making the minimum payment to avoid additional charges. For student loans, it's a little bit different. You won't need to start paying your student loan back until you meet a minimum income threshold, and even then, the payment is calculated as a proportion of the amount you earn that exceeds the threshold. (Confused? Here's how it works.)

Once you're paying your loan back, make sure you're keeping track of when repayments are due and ensuring that they're made on time. If your circumstances change and you no longer fall within the minimum earnings threshold, contact Student Finance England as soon as possible to let them know and rearrange your payment schedule.

Getting help

If you're struggling with debt, there are several resources available to them. Some UK charities designed to help with debt and offer excellent resources for debt advice and support include :

• StepChange
• Christians Against Poverty (CAP)
• PayPlan
• Citizens' Advice
• The Debt Advice Foundation
• National Debt Line
• MoneyHelper

These organisations offer free debt advice and can help students to manage their debt effectively.

In summary, Debt Awareness Week is an important event for students at university in the UK. It's essential for students to be aware of the potential cost, implications and management of all types of debt, including student loans, credit cards and store credit. By managing debt effectively, students can avoid long-term debt burdens and protect their financial and mental wellbeing. Remember, if you're struggling with debt, there are resources available to help you. Don't be afraid to seek support and advice to get back on track.