Student Life Information

Darryl Speaks - Student debt

Tuition fees, student loans, overdrafts, rent and credit card bills means today’s students will be lucky if they can get through a degree without owing any money.

Darryl speaks about the issue that affects him, his peers and will affect about 99.9% of the people who read Get Smaart.

If you’re applying to go to university in September, you might have seen a small section on finance in the prospectus claiming it’s perfectly possible to live of your loan.

The student loan may be the first cheque you get for £1,000 or more but it really is scary how quickly that becomes £100 or even £10 in my case.

When you’re a fresher, everyone is being nice, you’re making new friends, things are going on and it’s important that you are part of that. I made a lot of appearances at parties to get my name and face known on campus but after a while all the spending and partying affected my work rate and finances.

I’m going to be blunt and tell you living of your loan is harder than you can imagine, student lifestyle has changed over the years and most of us get over excited when we see more than two 0’s credit on our bank statement.

One way to counter debt is to work, but getting a job isn’t as easy as saying it, which we will discuss in a later edition of Get Smaart.

Some jobs pay poorly, while others, mostly in London, pay above the minimum wage. You may opt to do voluntary work for the purpose of experience, while this is enriching it’s not really helping you pay your bills is it?

Students have acquired an expensive taste for fun and in between the demanding dissertations, ever ready essays or rigorous revision there’s the holidays not forgetting the weekends. Being a student myself, I struggle to juggle everything in a week and that’s not including weekends, balancing work, family, friends and fun can be quite challenging and most universities have clubs and societies from sports to reading and joining these gives you the opportunity to make new friends, gain new life and people skills.

Weigh all this up with a job and a full time degree, tell me when do I get the time to watch Sunday football or the OC?

I keep a diary so nothing passes me by, I schedule all my appointments like a secretary,   set out my goals and objectives for the week like a boss, I manage my finances, comparing spending with earnings and savings, like an accountant.

The quickest way to get money is on credit but it’s also the quickest way to debt as well.

All the credit companies are more than happy to accept applications from students no matter what your earning’s are, they know that we will be owing them cash for the duration of at least a semester.

I’m sure you have seen students buy furniture, cars and clothes all on their cards but really they don’t have the money to pay it back, the truth is they will be making a minimum payment for the next 3- 5 years.

Interest is a pain in the backside and if you have never heard of APR (Annual Percentage rate) then you need help. APR is the percentage that makes you fork out that little bit extra.

The only advantage of paying on credit is the insurance if something goes wrong, also the fact that if you’re smart, like me, you can get things interest free for a limited period.

Ultimately cards are no good. Try to avoid them, remember every little counts, all those purchases add up and that statement is not going to disappear.

Loans can work out cheaper with fixed repayments, it feels like free money so it’s tempting to spend carelessly, however, if you don’t keep up with repayments you can be blacklisted and this can affect your chances of future loans and mortgages.

Beating debt is like quitting smoking “yes it’s a nightmare” if you can’t then I’ve included my tips for getting out of it.

• First step is to look at your income and compare that with deductions

• Work out a debt repayment plan, start to save and sacrifice

• Cutting out luxuries is compulsory such as super soft comfort toilet tissue

• Prioritise your debts; rent arrears are more important than hire purchases or loans.

• Oh and if you’re well off then just run to mummy or daddy.

Otherwise seek professional help, talk to someone, your student advice centre may direct you or refer you to the bursary or for a student crisis loan.

If you once were a student or still are and have been in debt tell us what happened and how you got through it.

I want to hear your success and sad stories, maybe debt made you quit studies tell us why and how?

Contact Darryl McKay the same way you do every month   darryl@getsmaart.com

For further information on student debt check these websites

www.adviceguide.org.uk

www.adviceguide.org.uk

www.equifax.co.uk

www.experian.co.uk

www.moneyfacts.co.uk

www.oft.gov.uk/consumer

www.fool.co.uk/cards