Students Believe Debt is OK

Many financial experts believe that students in the UK on a whole believe that to be debt is socially acceptable. The experts believe that most students taking out a student loan have brought about this general consensus among students.

Since student loans came into real effect in 1998 nearly all the UK’s students have sought some financial assistance from the government-backed Student Loans Company.

This has resulted in graduates often leaving university saddled with thousands of pounds worth of debt, albeit, borrowed at a reduced rate. Students who borrow from the Student Loans Company are also aware of the unlikelihood of clearing the debt in the first few years of employment.

Samantha Owens, head of research at Moneyfacts.com, said: “ Being in debt has just become more acceptable. Student loans have moved that forward.

“ The problem is that borrowing starts from a relatively young age for a lot of people and gradually become more accustomed to being in debt.”

Graduate borrowing levels are set to rise this September as students come to grips with rising tuition fees, which will only serve to compound the problem further.

Currently, students only begin to repay their loans once they earn more than £15,000.

In order to help alleviate the growing student debt problem, the government will start a pilot scheme in September at five universities were students would be able to obtain their degree in two rather than three years. These ‘compressed degrees’ will allow graduates to start work sooner thus reducing the amount of debt accrued.

These degrees will mean students having to say goodbye to their long summer holidays as the intensified courses aim to meet the demands of employers.

Higher Education Minister Bill Rammell said: “ I believe that two year degree courses would encourage those who would not usually feel able to take three years out of their lives to study to see that a degree may be possible for them.”

Other government plans for higher education include students taking degrees entirely at work and through online study in an effort to raise the proportion of adults with degree qualifications.

Cindy Kuo
4/5/06