Today’s students are set to graduate with £20,000-worth of debt, as too many head to university unable to manage their own finances.
Two pieces of research published today indicate how the rising cost of living, and general ignorance about how much things costs, is hitting students where it hurts – in the wallet.
The first, from the National Union of Students (NUS), in association with HSBC, found that too many students head to university unaware of the basic costs of living and unable to manage their own money.
The research found that students underestimate the cost of living by nearly £450 a year. Food for students comes in at whopping £710 a year, while bills and travel will set them back £740 and £385 respectively.
A lack of understanding about bursaries and loans is also hurting students financially; the survey found that 42% believe they will be entitled to a bursary to yet only 28% actually receive one.
Wes Streeting, president of the NUS, says financial ignorance means students are falling into debt.
“It is clear that many students are sleepwalking into financial crisis,” he warns. “As the credit crunch kicks in, and with food and fuel costs set to rise even further, we can expect more and more students to get into serious financial difficulty, with many having to resort to taking out commercial loans, or being bailed out by their parents.”
The NUS is now calling for more help to educate students about how to manage their money.
Moneywise agrees that more needs to be done to help young people, many of whom leave home unaware of the costs of everyday life. This is why we are campaigning for personal finance to be taught in schools on a compulsory basis, so the next generation gets the opportunity to improve their financial skills and make the most of their finances.
You can support the Moneywise Kids and Cash campaign by signing our petition on the Prime Minister’s website.
Another piece of research out today, warns that students who started their studies last year can expect to graduate saddled with over £17,500 of debt, while new students will graduate owing £20,000.
The research, by student information resource Push, found that student debt now tops £4,500 for each year of study, up by a 9.6% since last year.
Students in England are also getting in deeper than their Scottish and Welsh equivalents, owing £199 more each year than the national average.
Push says the amount of debt students accrue also depends on their university; the national average student debt is £14,000, but at 11 universities this rises to over £20,000.
Johnny Rich, series editor of Push.co.uk, says: “Some students are facing real financial hardship.”