Crushed under the weight of debt

Sep 25 2007 by Emma Pinch, Liverpool Daily Post

The lazy, hazy days of student life have been replaced by massive loans and part-time work. Emma Pinch reports on the financial burdens today’s graduates are suffering

WHERE’S the most likely place to find a student this evening? In a bar on Bold Street buying lurid-coloured drinks for 50p? Marching up Mount Pleasant clutching an armful of law books?

Ten years ago, that was probably the case.

Today, chances are it’s behind the till in an Asda tabard, grappling with vegetable prices and an ever-growing queue.

Three-quarters of students now work during term-time, up 50% in the last ten years – and almost half of those in the retail sector.

The reason more of them work is simple. Students entering the region’s university’s as Freshers this year will accrue a quarter more debt this year and graduate owing on average £15,000 – the biggest burden of debt ever shouldered by UK students.

Channel 4 soap, Hollyoaks, has tuned into the issue now affecting so many in its young audience, with a student debt story-line. It is one which strikes a chord with the actress playing the central character.

Jennifer Biddall plays Jessica Harris, a marketing student whose finances take a turn for the worse when her rich father is made bankrupt. She hatches a series of legally dubious money-making schemes – but spends the cash trying to replicate her champagne lifestyle.

Jennifer graduated from the Bristol Old Vic Theatre School, in 2004, owing about £15,000, but has been able to start paying it off since landing a role in the popular soap two years ago.

“I sympathise with her, but I don’t agree with what she spends her money on,” she says.

“I had to save money for food, not spend it on stupid stuff like she is, and I still came out with a huge debt. I worked as a waitress two days a week and studied from 8am-7pm. The hours were hard and tiring, and it was annoying because a lot of other people at drama school had things paid for by their parents. It would have been much better to have been able to concentrate on studying.

“I remember making my lunch and dinner when I made my breakfast so I could take it with me – usually tuna pasta, I lived off that. Another trick was taking a bottle of vodka with me in my bag when we went out at night.”

They are tips which will be familiar to students at Liverpool University. Undergraduates there will, on average, add £4,730 to their debt over this academic year, meaning after three years they owe £16,000.

At Chester University, students face £4,646 of debt this year, rising to £14,300 at the end of their three years, while John Moores students will add £3,421.

At Edge Hill, students will add more than £6,000 to their debt, taking three years of payments to more than £18,000.

A major factor in the steep hike has been the introduction of controversial top-up fees. Undergraduates who started their courses in England and Northern Ireland last autumn are the first to be charged top-up fees capped at £3,000 per year, up from £1,175 under the old system.

Proposals are now being mooted by the Government for institutions to set their own unlimited fees, something that the NUS is campaigning vociferously against.

Ama Uzomwuru, 23, is a computer science graduate and vice-president of the national NUS, and owes more than £20,000.

She says the existing fees already had many extra hidden course costs.

“There are field trips if you are a geography student and books, especially for economics or law, are also expensive because they change every year,” says Ama. “Recently, I had to buy a book because there were four copies in the library for 40 students – it was 50 pages long and cost £70.”

Ama took out a £6,000 commercial loan for her Masters degree in project management, and lives at home with her parents in East London.

“You don’t think about your debt too much at first because everyone’s in the same boat – 30,000 students at Coventry university. That was quite naive.

“There’s a big myth at university that graduates will take up a graduate job the minute they leave. But only half of students will go on to them.

“A lot of graduates go on to work in call centres when they leave – they’re low-paid but easy jobs to get and they need to start paying their debts.”

And the knock-on effects continue.

“When they leave, it is difficult to get on the property ladder and to pay pensions,” she says.

“Then the numbers of people from low socio-economic backgrounds going to university starts falling.”

Another concern is money worries causing increased “burn out” among students. Alan Roberts, academic advice and representation co-ordinator at Liverpool University’s Student Guild, says that about half of the 300 or so students who approach him for advice every year have problems relating to finances.

He often counsels students going through re-sits, having failed their second or third years.

“They have done badly in exams and not been able to get study time, or attendance or assignments in,” he says.

“Some were working up to 30 hours a week on their bar jobs because they can’t pay the rent.

“You wonder whether there’s such a thing as a full-time student any more.

“Burn-out is a problem and we do refer people to occupational health.”

But a bit of research can be a lifesaver for students struggling to stay afloat.

“Go to the student union advice centre,” advises Ama Uzomwuru. “There is money that universities are given to help out students, but don’t publicise, such as the access to learning fund. There are also bursaries, given out as cash or tools such as bikes, and hardship loans.”

For the worst-case scenario, where creditors are threatening legal action, Mark Feen, money advice unit co-ordinator at Liverpool Citizens Advice bureau, has some pointers.

“The first thing the client must do is go through their personal budget,” he says. “We establish what is essential – usually rent, gas, electricity and water – and what is not, and get them to think of budget planning and how they can boost their income, via charity funds, tax credits or even living at their parents’ if that is workable.”

The CAB will also step in to help negotiate between client and creditor. “If someone is in eight weeks of rent arrears, a private landlord can repossess, so it is about reaching an agreement with a lump sum.

“If the creditor is starting county court proceedings, we can negotiate on the client’s behalf and prepare a detailed financial statement on the client’s circumstances, and offer a realistic offer of payment. They really don’t want to go to the expense of court proceedings so a minimum payment can usually be agreed, with a review after eight weeks. The key point is don’t let it get to a point where creditors are taking county court action.

“But the best course of action is to sit down and work out what your income is going to be over the next 12 months and plan ahead.”

* FOR funding help from academic institutions, charities and companies go to www.studenthmoney.org.uk.

* For budget calculating and loan information go to www.nusonline.co.uk/info/money/
 
* Get free debt advice - National debtline (0808 8084000), Consumer Credit Counselling Service (0800 1381111), CAB advice line (0844 8487700)

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