Debt: Student Debt Set to Increase



Student Debt Could Double for 2012

Student Debt Could Double for 2012

Beginning in 2012, student debts could double the amount for 2011. According to the Push university guide, annual debts had risen more than inflation by 6.4%, to £5,680. Around 2,800 students were interviewed on an average course length of 3.4 years.

Tuition fees in 2012 are set to rise, and the average debt per person by the end of a course could be £53,000 for home students. A-level students are receiving results, and competition for the last few places at universities will be fierce this year, to avoid higher fees next year.

Higher Numbers for 2012
The survey considered all debts except mortgages, not just tuition fees, and included postgraduates and those studying medicine. Using the past increases, they have predicted future debt rises in addition to the tuition fees, which will be at a maximum of £9,000 in 2012.

The average calculations showed that those beginning in 2011 will graduate with £26,100 and those in 2012 will graduate with £53,400 in debt. Ministers have still encouraged students to enrol in university despite the tuition increases and many universities have had to set out targets for enrolling more underprivileged students. The data has accounted for bursaries and fee waivers that have already been announced.

Johnny Rich, publisher of Push, has believed the calculations to have an error margin of 10%, though it was still higher than anticipated—due to debts rising over inflation. Due to the economic climate, students have found it difficult to find temporary or part-time jobs to help fund their studies, and costs of expenses have increased.

Spending Control
Mr. Rich also revealed that some students may have difficulty with financial control, saying, “The moment you start talking about such massive debts people stop being so careful… they realise they’re in a deep hole and small amounts of effort won’t dig them out again.”

However, he maintained that the debt would be “normal” urging students to carry on with their studies. Loans will only need to be paid back once graduates start earning £21,000, and any remaining debt will be cancelled after 30 years. Additional debt, however, accounts for 25% of student debt—with nearly 7% of that owed to bank overdrafts or credit cards.

Liam Burns, president of the National Union of Students, raised concerns about this, saying, “The fact that the government thinks it’s OK to hang an amount of debt equivalent to a small mortgage over someone’s head while they study is one thing, but leaving young people reliant on commercial credit just to stay in education is scandalous.”

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