Students and money
Veterinary and medical students are particularly vulnerable to debt. They have more years of study to fund but less time for part-time work. It is vital to work out your budget and stick to it.
Already in debt?
Read our advice on managing debt – remember, there is no debt problem which cannot be solved.
• Do not ignore debt and hope it will go away.
• Letters from creditors should always be opened and dealt with as soon as possible. If you don’t reply to the letters there will be consequences. At worst, the bank could ‘freeze’ your account and refer the debt to their collections/debt recovery department. This would mean losing both your account and your overdraft facility. At best, they will be charging you high interest on an “unarranged” overdraft (the excess borrowing on top of your normal overdraft if you are still over your limit).
• Speak to the bank and explain your difficulties. Check when your next student loan payment is due and see if the bank can wait until then for repayment of the unarranged overdraft.
• If you are paying high interest charges and can’t negotiate with the bank to reduce them, you should try to put some money into the account to get back within your overdraft limit – try to get a temporary loan from friends or family, apply at the University’s finance support office
Make a list of all your bills, including how much each is for and then prioritise the debts. Very large or very late bills are not necessarily of highest priority. Pay off priority debts first but make sure you contact all creditors so that they know you are not avoiding payment.
Priority debts – pay these off first!
These are debts owed to creditors who can take strong legal action against you if you do not pay. They include:
• Mortgage or rent arrears – the house could be repossessed by the bank or the landlord could have you evicted.
• Fines (eg for traffic offences) – bailiffs can be sent to seize possessions or you could be imprisoned.
• Fuel bills (electricity/gas) – you could be disconnected.
Credit and store cards, bank loans and overdrafts, catalogue debts and money owed to family and friends, although stressful, potentially embarrassing and not good for your credit rating constitute lower-priority debt.
This doesn’t mean they can be ignored – eventually your creditors may take you to court if you fail to make contact with them or make some offer of payment.
What if you can’t make minimum payments or cover essentials?
You can go to a non-profit debt counselling service:
They will draw up a financial statement with you (a sheet detailing your income and expenditure) and calculate how much available income you have.
An offer based on this,and a request for interest and charges on the account to be frozen, will then be made to each creditor. If you have no or little available income, token offers can be made – even £1 in some circumstances.
An advisor may negotiate with creditors on your behalf, as well as checking your entitlement to hardship funds and benefits. If you do not have advisers at your instituition that can provide you with this service your local Citizens Advice Bureau will be able to do this for you.
Financial support staff offer advice and information, including funding, such as bursaries and student loans. You can apply for support funds, such as the Access to Learning Fund:
Help, advice and information
Moneymanuals – topics including Dealing with Debt, Redundancy, Savings & Investments, Students
GOV.UK – Student Finance
Welsh Assembly Student Finance Wales – 0845 602 8845
Student Awards Agency for Scotland SAAS – 0131 476 8212
Student Finance Northern Ireland – 028 9025 7710
Finance for students from other EU countries – (+44) (0) 141 243 3570
Student Loans Company – 0800 40 50 10
Tax Credit Information from Inland Revenue – 0845 300 3900
Student Money Scholarship Search – Searchable database for scholarships for undergraduate scholarships and grants offered to academic institutions, commercial organisations and charitable trusts
Learn from other students
“When I got to university and banked my first student loan cheque, I felt amazingly rich, as I imagine many people do. With only a fraction of it going on my rent, and my parents agreeing to pay my tuition fees, I think I subconsciously decided that the rest of my money was there for me to have a good time with. We quickly got into a routine of going out 3 or 4 times a week. But we were having such a good time, it never really occurred to us to go to cheaper places, let alone the student union.
I didn’t keep track of my spending, and when it came to December, I realised I’d almost completely spent my first loan instalment and had nothing to spend on buying food – forget Christmas shopping. I sheepishly told my parents, who bailed me out. In a way, I wished they hadn’t – I didn’t learn from the experience and repeated the same mistake the following two terms.
I’d tell myself I was on a hard course and therefore deserved to have some fun as well, and would go clubbing and spend anything up to £80 on a single night out in the city centre. But rather than admit the problem to my parents again, I took out two credit cards and used them to pay for everything. I didn’t really understand the interest rates, instead getting drawn in by clever marketing, and found myself in a mounting pile of debt at the end of only the first year of the 5-year course. I later found out that my friends, as well as being only on 3-year courses (a fact I’d conveniently ignored!), had all been getting regular handouts from their parents – something mine couldn’t afford to do!
By the end of the year I realised I had to change my lifestyle. The priority was to pay off the credit cards as soon as possible as the interest rates were horrific, so I joined a temping agency and worked the whole long summer after the first year, whilst my friends went on holiday. Through this and weekend work during the second year, I finally paid off the horrendous debt and cancelled the cards.
Now that I’ve dug myself out of the hole, I force myself to budget for food and books and so on before spending money on going out – and I’ve learned to have a good time at cheaper places! My advice to other students would be to keep track of your account at least weekly so you know where your weaknesses lie; budget for the sensible stuff first; and stick to debit cards unless you know exactly what you’re doing.