Nearly a third of full-time students aged 18 to 24 hold debts outside of their student loan and around half ‘regularly’ worry about money, according to new research.
The research suggest widespread money worries among students. Credit: PA
The findings conducted by charity the Money Advice Trust, come as many new students move into student accommodation this weekend.
The newly-published findings, based on a survey of 2,042 18 to 24 year olds conducted online for the Money Advice Trust by YouGov, throw a spotlight on students’ experiences with other kinds of debt including credit cards, overdrafts and loans from family and friends.
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Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “At a time in life when we would all want them to be flourishing, it is a sad fact that too many students are being weighed down by debt problems.
“As our research shows, this issue goes beyond student loans – which are a very different kind of debt – to significant proportions of students already holding debts on credit cards, overdrafts and to family and friends.
“Students can of course generally anticipate higher incomes later in life, but it is essential that any debt problems are tackled early. Practical reforms to student finance payments would help – and we also need universities, students unions and advice charities to work together to do more to raise awareness of the free advice that is available.
“Any student who is struggling to cope should seek expert advice by contacting their college or university’s student money adviser – or a free debt advice charity like National Debtline – as early as possible.”
The findings follow the publication of the charity’s Borrowed Years report on young people more generally earlier this month.
The findings show that a significant proportion of full-time students are taking out credit, with many already feeling a ‘heavy burden’ from what they currently owe.
Nearly a third (31 percent) of full-time students aged 18 to 24 currently hold borrowing outside their student loan, owing an average of £3,409.
This includes nine percent who have at least one credit card (average debt £460), 15 percent with an overdraft (averaging £858 overdrawn) and 10 percent in debt to family or friends (owing an average of £7,094)
Worryingly, 30 percent of those who have borrowed money already feel their debts, including student loans, are a ‘heavy burden’, and 12 percent do not expect to ever be able to repay what they currently owe.
The research suggest widespread money worries among students – a trend the charity’s Borrowed Years report identified amongst young people more generally.
Around half (49 percent) of all full-time students aged 18-24 regularly worry about money, and 17 percent say they sometimes lose sleep because of money worries. While 39 percent say they have found managing money harder than they thought
However, a large majority of full-time students in this age group have a budget they try to stick to (70 percent) and check their bank account online at least once a week (67 percent)
The research shows that despite these widespread concerns, only a minority of students are seeking expert advice on money and borrowing. While around two thirds of full-time students aged 18-24 (67 percent) have turned to a parent for advice, only 12 percent have contacted a student money adviser – and just two percent have sought advice from a money or debt advice charity.
The newly-released findings follow the publication of the charity’s Borrowed Years report, which made several recommendations for measures to help young people manage their money and avoid debt problems.
For students specifically, these recommendations include;
- Shifting the current termly payment of student loans to monthly payments, to help students to budget effectively, and prepare for monthly money management after graduation
- Action to raise awareness amongst students of the importance of their credit rating, including the impact of shared bills in student accommodation and the need to register on the electoral roll while at university.
- A government review of the impact that the student loan system is having on young people’s financial behaviours, in light of concerns that the system is ‘normalising’ debt for young people