Average student debt?

mrjoet

I thought I'd add to this thread. I started University in 2006 as a deferred student so I pay £1200 tuition fees.

My maintenance load in approximately £3300 per year. I am on a 4 year course so my debt will be around £18,000 by time I graduate.

Even though I graduate with £18k debt it does not worry me in the slightest for several reasons, the first being I wouldn't have to start paying it back until I earnt over £15k

"The repayment of loans is repaid through the tax system, and only begins after the student has left higher education and is earning over £15,000."

Taken from the student loans website.

The second reason is that you only pay back the VALUE you took it out at, meaning if you borrowed 10k in year 1 and inflation was 10% you'd owe £11k, so although the number has gone up it is still the SAME VALUE.

"Student Loans are different from normal commercial loans:
the interest rate is subsidised by the government"

Taken from the student finance england website.

The final reason is that by going to university and gaining a degree my earning potential is much higher than without. That's not to say that you can't make it without a degree but having one gives you a much better chance and having to pay £18k for that is worth it. Considering part of that 18k is living costs, the only cost of me not staying on in work would be my tuition costs + lost earnings, which I equate to approximately £4,800 for tuition and an optimistic salary of £20,000, and that's without taxes. So an overall loss of around £85k. I expect my degree to pay for itself within 5-10 years, so definitely worth the debt.

Absinthe_Fairy

Rosemary7391 wrote: »

If my loans are the same for the next 4 years I'll come out of uni with just over 30K of debt - and my maintenance loan doesn't cover my rent this year (4689, in catered halls, but no choice about that...)

Working during the holidays I will hopefully earn around £2500 to pay the rest of my rent, books and travel costs, and a few luxuries. If I have any left over, it'll go into savings. Not all students spend money for the sake of it, but its nice to have the odd night out and small luxury every now and again. You can't study all day, and sitting and staring at a blank wall doesn't appeal. I can't see how anyone could afford to spend over 6k on top of accommodation though! That is excessive.

Ouch! That sounds painful. Catered halls are such a rip off.

Fire_Fox

Absinthe_Fairy wrote: »

Fire Fox - you've definitely got a point!

I've just been thinking, and people from low-income families are entitled to (correct me if I'm wrong!) a £3000 grant, a £3000 tuition fee loan and a maintenance loan. They could use the grant to pay off the tuition fee loan, thus coming out with £9000 less debt at the end of the course, and would be in the same position I was in as an undergrad (no tuition fees to pay, but no grant either). So they don't need to come out with so much debt...

Fire Fox, Lokolo, I'm beginning to come round to your way of thinking! (Took me a while!)

Thanks for your honesty!

mumps

Fire_Fox wrote: »

I haven't assumed anything: I've taken most of my information from the self-reported Student Income and Expenditure Survey. You admitted you had spent money on nights out and clothing in your earlier post.

My ex-husband went to the University of York, graduating with a PhD in the late nineties. No tuition fees then, but no grant and very limited financial support from his mother (father deceased). His earnings were all he had - so he went round the supermarket with a calculator, cooked from scratch at home for friends instead of going out and bought new clothes when they wore out, he lived in a dingy bedsit above a pizza place for four years. After six years study he had nothing more than a small overdraft.

I'm not criticising you or any student for their spending habits, you clearly don't regret living beyond your means as it enhanced your student experience. The reason I appear so harsh is I think it's very dangerous to start thinking massive student debt is unavoidable. This attitude is what sets many up for living on credit for the rest of their lives ... cars on finance, holidays on the credit card. :rolleyes:

If I can make just on undergraduate think about what level of debt they are comfortable in graduating with and budget to keep within that, then I have achieved what I have set out to. As the bank advert says - there is another way.

Both my sons were at university in late 90s and there were grants. They both got them. Don't know what year your husband started university, I think my son went in 1997 (it could have been 1996) and I think it was the last year the old style funding was in place, but if you qualified you got it for your whole degree. As he had been working for a few years since leaving school he got the full grant and I can't remember the exact sum but it was enough to pay his halls and a bit over. As you said no tuition fees either. I reckon my daughter (now at university) needs £5k+ a year to put her on a level playing field with them. Last year her halls were a few quid short of £3k plus fees of over £3k, looks like I am short changing her as she really needs £6k to be equal to them. I give her £3.5k per year and her grandmother gave her £5k as a lump sum. She is planning on graduating debt free. Unfortunately not everyone has parents who can or will make up the shortfall.

She works in holidays and has gone back this week with £2.5k in the bank and she had a foreign holiday and a trip to a festival and a short break with friends, so could have had more. She isn't working in term time, prefers to work hard in holidays. Her Christmas work is already arranged and she can take up to £1k back in January depending how much she chooses to work. To be fair to lots of students at the moment jobs are in short supply.

Personally I think there is more to a university education than sitting studying, living as an adult, making mistakes and having a social life are great learning experiences. Just my own opinion but as an employer I know they are valuable.

bumpoowee

I came out of Uni with £10k of debt which was £9k student loan + £1k overdraft. My parents very kindly paid my tuition fees (a more reasonable £1k a year at the time) and the overdraft when I left Uni. I did have a job for the first two years and worked around 16 hours a week, more in the summer.

All this 'students come out of Uni with loads of debt because they are stupid and waste all their money on fags + beer etc.' is !!!!!!!!. There is some small truth in it, however, if a student is on a proper course in a proper subject, there is a limit to how much they can work do to fund their studies.

Personally I quit my job for the final year and accepted higher debt because I wanted to make a proper go of my dissertation. I remember working 12 hour days on my dissertation through the xmas holidays, and working flat out 7 days a week January - April. There is no way I would have done as well as I did or learned as much as I did if I had been working, and with retrospect absolutely made the right choice.

It also isn't realistic to expect students to have no social life for 3 years... they are 18-21.. get real.

Fire_Fox

bumpoowee wrote: »

All this 'students come out of Uni with loads of debt because they are stupid and waste all their money on fags + beer etc.' is !!!!!!!!. There is some small truth in it, however, if a student is on a proper course in a proper subject, there is a limit to how much they can work do to fund their studies.

It also isn't realistic to expect students to have no social life for 3 years... they are 18-21.. get real.

Have you bothered to read the Student Income and Expenditure Survey? :rolleyes: It's graduates saying they spend £6K a year on fags, booze, clothing and CDs not anyone on this thread. Are you saying the entire survey is <insert swear word here>??

Who has said they expect students to have no social life? Have whatever social life you want and deal with the resulting debt without complaint. It's possible for many students to leave university with savings, and most to leave with little or no debt, yet the average new graduate has £16K debt - there has to be a middle road.

Many students arrive at university each year and then spend weeks or even months seeking work in a recession, many more go home out of semester and do the same thing. Yet some students are proactive in seeking work - I for one had two jobs lined up before I arrived in Bradford ... an area known for high unemployment. Working an average of just sixteen hours a week year round for minimum wage will earn you approximately £4000 tax-free, but the key to it not disrupting your studies is working consistently.

coffee_prince

bear in mind many students get bursaries and reduced tuition costs

littlepinkstars44

Wow i am shocked when i hear about people leaving uni with £20k worth of debt! How do you manage to run up that much?

Im in my 4th year of having my student loan and tuition fees paid for me, and my debt is only £5000ish. I have one more year to go, bringing me up to about £7000ish debt in total over 5 years of studying.

bumpoowee

littlepinkstars44 wrote: »

Im in my 4th year of having my student loan and tuition fees paid for me, and my debt is only £5000ish.

well exactly, if you get it paid for you then your debt will be substantially lower. If you paid the £3k a year yourself you would owe an extra £12k.

Oldernotwiser

neas wrote: »

I did a 4 year course and only used my loan for 3k of living expenses (ACCOMODATION... something which most DFW dont need to pay as they in council housing... students dont get free accomodation you know) per year. I worked my !!! off for my degree and 16 hours a week for 4 years...

.

Where do you get the idea that council housing is free?