UK: Students underestimate debts

As the British university term is about to begin, new students are being warned not to underestimate how much they are likely to be in debt by the end of their courses. A survey from the National Union of Students reveals that prospective university students are underestimating the basic costs of living such as groceries, household bills and travel by nearly £450 (US$822) a year.

Another survey of student finance by Push.co.uk, an independent guide to UK universities and student issues, reveals that students who started at university last year can expect to owe more than £17,500 by the time they leave and new students should reckon on nearly £4,000 more than that. Its annual survey found that student debt now tops £4,500 for each year of study - a rise of 9.6% since last year.

The University and College Union said the reports served as a worrying reminder of the ever-increasing costs of university. It warned that students suffering now at university will be hit again on graduation as buying a house or starting a pension will be distant dreams for this 'generation debt' as they come to terms with repaying their student debts.

UCU's general secretary Sally Hunt said people underestimated the impact of debt on the individual. Students were working more hours than ever before to try and meet the rising costs of living at a time when their debts were hitting record levels.

"Lecturers have little desire to teach students who are shattered from working long hours to pay the bills or stressed because of their financial situation. It is students from poorer backgrounds that find themselves hit the hardest as they are less likely to be able to rely on financial support from their parents. The government must reject calls for higher fees and greater student debt in next year's fees review," she said.

"Many students who are entitled to financial support are being failed by the complicated system of bursaries. We need a simpler and fairer scheme where all students can apply with ease for the money they are entitled to."

The NUS survey showed that women were more concerned about debt level than men and anxiety increased as they progressed through their courses; loans remained the keystone of their finances although many had unfounded optimism about getting bursaries; and 3 in 4 students worked to boost income with a third taking term-time jobs and a half in the holidays.

Although the total under-estimation of weekly spending amounted to just under £20, it was a sizeable amount on a student budget and suggested that prospective students might struggle, the report comments. But the survey found that students were not much motivated to seek information on their financial outlook. One said: "There's no point in worrying about it, if you've got to do it, you've got to do it."