Huge debts accumulated at university could cause students to go bankrupt, a study has claimed. The study, compiled by price comparison website uSwitch.com, estimated that one in ten students could be declared insolvent after they have had to borrow thousand to pay for tuition fees, accommodation and living expenses.
Even if they can avoid bankruptcy students face 11 years of debt as the costs of attending university continue to spiral upwards. Most undergraduates already have to get paid work to help them keep their borrowing down, and sometimes that can mean missing lectures to go to work.
The report will make unpleasant reading for students and their parents, following on from the Government’s higher education funding regime introduced last year, in which universities were allowed to charge £3,000 a year in tuition fees, up from the previous high of £1,250. As fees have soared, increasing rents and rising living costs have led to students needing to borrow record levels of money, or get jobs, or ask parents for more money to be able to get through a three year course.
Two hundred thousand students are about to start university courses this autumn and the total student population faces debts of £3.2bn, almost treble that of 1997. The last ten years have seen graduate salaries rise by 51% at the same time as student debt has rocketed by 167%. The result is that 10% of students end up considering bankruptcy as a solution.
It is said that some students start work with a debt of £30,000, and the inevitable knock-on effect it will have on their lives. A survey by university guide Push.co.uk found that last year’s freshers expect to have debts averaging £17,500 by the time they leave university. For this year’s starters the debt will be £21,500 come their graduation.
Student debt could lead to a change in the country’s demographics as middle class students, ineligible for means-tested grants and bursaries will have debts so bad that they will have to out off buying a home or starting a family.
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