Being a student in 2019

Studentdebt wrote: »

I’m going to start this by declaring that this is being written for advice, even if it mah sound like a big old moan.

I am currently in £8,500 debt, consisting of a mix between loans and overdrafts which need to be paid by June 2020. I am a 20 year old student that works 12 hour shifts at night from Friday to Monday before returning to uni the following day. I’m in my third year and will be leaving uni in June, which is when all of my debt is due.
These debts have come from limited funds to live and now this is taking over my ability to attend university as I take every chance I can get at over time and making extra cash to get me through the week.
I’ve tried debt agencies, my own university and student finance to get me through, I’m now stuck.

Please, all of you lovely people with so much advice, help?
I never thought I’d be this embarrassed about my life to post anonymously about huge debt that is crippling me. Any advice would be great!:(

First, as a London university undergraduate 40 years ago who received free tuition and lived away from home almost entirely off a free local authority maintenance grant without needing to work during term time, I want to say on behalf of my generation, and successive electorates, I feel terribly embarrassed to read your story, and you should not be embarrassed to have to tell it at all. Actually I feel totally ashamed that our country treats 20 year olds in such a way that you find yourself up against it like this in your most important year. I'm guessing you are having to work at less than £10 per hour too? Dumb UK low wage economy. Dumb UK low tax economy. Dumb successive electorates treating higher education as a luxury pursuit.

I realise that doesn't help you much, but just wanted to get it off my chest. It is not your fault. It's ours.

As for your worry about a repayment deadline at the end of your third year, like Sky_ said, I was of the understanding that those banks that offer facilities to students usually fairly automatically extended those into the first years of working life after leaving uni. I say that in the knowledge that my son still exploits a 0% £2,000 overdraft with Santander despite having been working for 3 years now and easily being able to pay it off now when they get tired of continuing to offer it! And that was never his only bank whilst a student, and he has scarcely used the account since starting work.

Remember that special overdraft facilities for undergraduates are an important form of promotion for the larger banks. They are hoping you turn into a rich future customer. They shouldn't be pulling the rug the moment your study ends, and I am sure if you found a fully qualified student finance adviser at a big branch (ask for exactly that) then you'd start to understand how to plan your way forward again exploiting what is on offer, perhaps from a bank you haven't tried yet. Don't waste your time with an ordinary adviser. Make sure you talk with one who has specially qualified to be instantly fluent with what each has to offer current undergraduates and those who have just completed their study. You'll probably need to telephone a central contact number and get them to make an appointment. In my day, the qualified student advisers often were shared between even the largest branches in London.

Be prepared to take along a clear fully inclusive living costs budget with multiple expenditure headings and a note of your income and where it comes from e.g. if you expect to receive any further partial university maintenance grant or loan instalment before your study ends, as well as your expected part-time wages including overtime, and perhaps if you can say, what you hope to achieve when you finish study and hopefully can walk straight into full time work.

So how is your current £8,500 debt broken down? Is it still increasing? I mean it might just have been feasible for a student in their third year to have cleverly built up and exploited two or three banks offers simultaneously and to be able to be borrowing that sort of money in total at 0% interest.

They might also have checked the terms and feel confident their lender will straightforwardly carry it over for a couple of years beyond university. You don't have that confidence currently, but maybe you've overlooked something or bank(s) have sold you the wrong product(s).

Even big banks have too few staff in branches who know how to properly deal with university undergraduates and I have seen some who plough on regardless and will sell you a bog standard loan product if the computer says yes to what they've typed in about your income - have you inadvertently been treated as a normal punter for some of the loans you've been given? 10 years ago I worked at a big bank and even that long ago, up to £3,000 interest free overdrafts on undergraduate accounts converted into graduate accounts were quite straightforwardly available.

It perhaps isn't the time to mention it, but just to get the full picture, I take it that to add insult to injury, you have a massive Student Finance Company loan in addition to the £8,500?

Have you obtained a free copy of your credit report? Perhaps if you have managed to service your mixed loans satisfactorily up to now you have as a by product built a good credit status which may aid you in negotiating some kind of additional or consolidation loan facility.

You can join the Moneysavingexpert.com credit club free and get some idea of your credit score.

If you have had a mobile phone contract for two or three years with no arrears, that also helps your credit record.

You might be able to feel better about your chances of further borrowing if you can discover via your credit report that you have already through your hard work got the beginnings of a decent credit status.

Now back to help bia your university - we'd all like to think, especially with the guff that university vice-chancellor fatcats spout constantly on tv news about constantly watching out for students experiencing hardship and stress, that your university does have the means somewhere on campus to start taking your predicament seriously. I know that a few years ago, a number of universities awarded non-repayable cash grants to some 'worthy' low income students, although perhaps that practice dried up once they realised no-one is even checking up on them anymore because of the distraction of Brexit. If you honestly feel you've exhausted that avenue and that your university doesn't seem to care, then it might be worth letting us know which university you are at. You are anonymous here so there may be nothing to lose and you never know, someone here may have a suggestion specific to that university, or it might just perk them up a bit.

I am not familiar with the Debt-Free Wannabe board so don't know if they can offer specific advice for students. However, as onwardsupwards counsels, there's no harm in posting there too.

Meantime, if you can tell us a rough breakdown of your debt i.e. balance with which lender via which type of account and at what rate of interest, and where the deadline comes from in each case, then it may spark some particular ideas for you here.

I am sorry this post may have turned into something far more protracted and wordy than you have ever had to study or interpret as part of your course!

Anyway, I hope that helps a bit, or at least makes you feel less embarrassed. Remember it is our fault not yours! Some enlightened countries, not so far from our shores, do this much better for their young people.

Studentdebt wrote: »

As for my current student finance loan, I have to be earning more than £10,000 a year to start paying this back.

Is it not a standard plan 2 Student Finance England loan, if so the current payback threshold salary is surely now around £25,000pa not £10,000? Or am I missing something? It's not nice having a Student Finance England loan balance around your neck when you start full-time work in earnest, but at least if I am right, it isn't as immediate a concern as your current commercially arranged debts.

That £450 per month loan payment is the killer, isn't it? And at 49.5%pa I think that equates to 3.4% per month interest on the £4,500 or so remaining balance on it? That's over £150 per month just in interest if I have my calculations right. That's one step back with every three steps forward which I appreciate is disheartening.
It is scandalous that you should have been forced to go to such sharks, but I bet you are not alone.

Why do you think the banks have made it so clear that they won't allow your overdraft to continue beyond graduation? To me that seems tantamount to them having set a trap which they know you will fall into and which may entitle them to start charging extortionate interest on an unauthorised overdraft from the day you graduate. That doesn't sound like them treating you fairly (FCA Principle 6). Have you regularly exceeded your overdraft limit to the extent they have had to warn you?

I am not sure DebtFree Wannabe regulars check this forum, and I am not fluent with the sort of advice they may be able to give, so I do recommend once more that you put all the info given so far into another post on that board and request any advice they can give.

I am sorry I've no additional ideas to offer you at the moment, but I am sure someone on that other board will try to help if you ask them.