Sociology student Andrew Barrett is aiming for a 2:1 in his degree at City University in London. He lives with three friends in a typical town house in north London. He lives the life of riley and is enjoying the best days of his life. He was, at least, until reality set in.
Andrew remembers the early days with a certain rueful nostalgia: “When I came to university, I felt so free. I quickly went through my student overdraft, but thought nothing of it. So I kept spending. I was going out with new friends, and generally enjoying London life. My money frittered away, and I have nothing to show for it.”
He is not the only one. Students are supposed to worry about meeting deadlines and going to lectures. But today, finance and money is the main anxiety for most students in higher education. A spokesperson for the University and College Admissions Service (UCAS) agreed that lack of money is a cause of concern for many students. “The average student debt is around £20,000, including student loans, overdrafts and credit card bills.”
So how do students cope? Grants have been abolished in favour of loans, which means that most students will be in debt when they finish their courses. The UCAS spokesperson added: “The Government has just launched a scheme called ‘Can You Afford Not To Go To University’. Their study shows that on average, once you’re in a job, you can look forward to earning 20% more, on average, than people who only have ‘A’ levels, which gives students a financial incentive to attend university.”
A recent study conducted by the National Union of Students calculated that the average student in London will spend £7686 a year, which includes tuition fees and accommodation. The maximum loan within London is £4590 – a disparity of £3096. Of course, many students are aided financially by their parents, but the shortfall is still considerable.
Andrew continued: “I get very worried about money. It’s at the stage now where I wonder if I can afford to shop for food. Most people can just put things into their trolleys and ignore the price. I have to choose the cheapest bread and beans, and eat that all week. I can’t even eat kebabs with my mates any more!”
Danielle Miles, a town planning student at Sheffield University, is in a similar position. “I have everyday worries about money – whether I can cover my direct debits, for example. But I’ll still be worried when I’m working full time. I have to use my student loan to pay my rent and bills, so when I finish uni I’ll have an £8,000 debt. I don’t want to think about how long that will take to pay back.”
Credit cards offer further enticement to run up debts. Some student bank accounts come with a credit card supplied. HSBC offer a Mastercard with a £500 spending limit, and the opportunity to pay only the minimum amount each month. Sarah Parker, a criminology student at the University of Teesside in Middlesbrough, says: “It is so easy to run up a bill. You can buy anything on a credit card, and worry about the payments later.
“I can guarantee that at least once a week, I will be sent junk mail offering me a new credit card. I just throw them away, but I know people who have a few credit cards. They buy everything on credit.”
Sarah’s friend, who preferred not to be named, added: “I ran out of cash, so I applied for a new credit card. It was really easy, and feels like you’ve got an extra £500 to spend. But now I can’t afford to pay them back, and the companies are making money out of me.”
MasterCard says that as long as students budget, then money should not be such an issue. Its website advises students to “estimate your college expenses and set up and maintain a budget”.
German sociology student Connie Geyer thinks that the attitude towards money in the UK is very different to the German attitude. “British students hold the opinion that university only lasts three years. During those three years, they’ll have the time of their lives, and will spend lots of money, and have the frame of mind that when they start to work for a living they’ll pay it all back then.
“In Germany it is different, because many university courses last for seven years. It is also very difficult to get a student loan, so German students calculate their finances and budget.”
The NUS advises students to be careful with their outgoings. “More and more opportunities for debt and credit are offered to students, so it is imperative that students are aware of the pitfalls as well as the advantages and temptations of various sources of income.”
Andrew Barrett, with the wisdom of experience, would be the first to agree.
Anna Bartlett is a second-year journalism student at City University, London
