RESEARCH conducted by a leading credit management firm found that 76% of college students worry about making ends meet during their college years, and 41% are considering quitting as a result.
Lowell’s research into student debt habits found that more than three-quarters of students (77%) develop personal debt during their college years, excluding tuition and student loans.
The dependence on credit primarily comes about through the use of credit cards, overdrafts, buy-it-now pay-later programs, and payday loans.
Lowell CEO John Pears said: “University should be an exciting and rewarding experience, but for young people moving away from home and not dependent on their family’s money, it can also be costly.
“Getting into debt while in college can be a concern, especially if you don’t have a steady income or secure job after graduation. We want students to know that they are not alone when it comes to struggling with debt during college.
“If you are worried about your situation, there is help and support. Please see our website for a list of independent organizations that can offer support.”
Nearly one in ten college students take out small-amount payday loans with extremely high APRs.
The study suggested that students who rely on this form of borrowing could face ongoing debt problems, especially if they intend to pay them off with student loans or scholarships.
With a 0% overdraft, many students are drawn to what feels like “free” money. However, after graduation, many banks expect students to pay off their overdraft within 1-3 years, adding to the pressure on graduates to find a job in a competitive job market.
Of course, weekly grocery shopping, rent, and bills are basic spending priorities, but despite the financial squeeze, 34% of college students said they were likely to spend money on nights out, takeout, or dining out.
Excluding tuition and student loans, graduates leave university with an average debt of £2,332 and take 3.8 years to pay it off in full.
Approximately 15% of graduates left university with additional borrowing of over £5,000. 16% of all respondents needed four or more years to pay off the personal debt they accumulated during their studies.
Sheldon Allen, President of Reading University Students’ Union said: “We are working with the University to achieve a number of priorities [the cost of living crisis]. We believe that every student should have an inexpensive hot meal on campus and that students should be supported when they are in need.
“To work on managing the crisis, we are working with the university and have launched a new UoR/RUSU Cost of Living Task Force. The taskforce is co-led by myself and Elizabeth McCrum, the Pro-Vice Chancellor for Education and Student Experience. It brings together key individuals from across the university community to address these issues and work towards further supporting students with living expenses.”
To access support visit: www.lowell.co.uk/help-and-support/independent-support