RESEARCH by a leading credit management company has revealed that 76% of students worry about making ends meet while in college, and as a result, 41% consider quitting.
Lowell’s research on student borrowing habits found that more than three-quarters of students (77%) develop personal debt, excluding tuition fees and student loans, during their courses.
Dependence on credit comes primarily from the use of credit cards, overdrafts, buy now and pay later schemes, and payday loans.
Lowell CEO John Pears said, “College should be an exciting and rewarding experience, but for those young people who move house and can’t depend on their family’s money, it can also be costly.
“Getting into debt while in college can be worrying, especially if you don’t have a regular source of income or a secure job by the time you graduate. We want students to know that they are not alone when it comes to struggling with debt while in college.
“If you are worried about your situation, help and support are available. A list of independent organizations that can offer support is available on our website.”
Just under one in ten students trust payday loans for small amounts of money with extremely high APRs.
The study suggested that students who rely on this form of loan could end up with ongoing debt problems, particularly if they intend to pay them off with student loans or scholarships.
With a 0% overdraft, many students are drawn to what can feel like “free” money. However, after college, many banks will expect students to pay off their overdraft within 1-3 years, putting even more pressure on graduates to find a job in a competitive job market.
Naturally, the top spending priorities are weekly grocery stores, rent, and bills, but despite the financial constraint, 34% of students said they would likely spend money on nights out, takeout, or eating out .
Excluding tuition fees and student loans, graduates leave university with an average debt of £2,332, taking 3.8 years to pay it off in full.
Around 15% of graduates left university with more than £5,000 in additional loans. Of all the people surveyed, 16% took four or more years to pay off the personal debt they had accumulated while in college.
Sheldon Allen, president of the University of Reading Students’ Union, said: “We are working with the university to deliver on a variety of priorities in [the cost of living crisis]. We believe that all students should be able to have a low-cost hot meal on campus and that students should be supported if they find themselves struggling.
“To work on addressing the crisis, we are collaborating with the university and have launched a new UoR/RUSU Cost of Living Task Force. The task force is co-chaired by myself and Elizabeth McCrum, deputy pro-vice chancellor for education and student experience. It brings together key people from across the university community to address these issues and work to further support students with the cost of living.”
To access support, visit: www.lowell.co.uk/help-and-support/independent-support