Student debt spiralling

By SIDDIKA KHALIQUE
Updated: 19:00 EST, 24 July 2001

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STUDENT debt has increased by five and a half times over the past 10 years, forcing students to become more financially resourceful, according to a survey by Barclays Personal Financial Services.

The survey looked at the cost of being a student and was conducted among undergraduates at 16 different institutions across England and Wales.

The research revealed that 95% of students owe money, compared with just one third in 1992. Student debt has increased because the nature of funding has changed since 1992 - then, just one third of undergraduates took out a loan from the Student Loan Company.

But since grants were abolished in 1999 and tuition fees were introduced in 1998, 84% of students are paying tuition fees, on average £1075 a year. Almost 90% of students now rely on the student loan as the main source of income, owing on average £4,785 by the time they graduate.

However, the survey reveals that undergraduates are becoming more resourceful about money whilst studying. In 1992 students struggled to find part-time and holiday work following the recession in the late eighties/early nineties.

But this year, all students surveyed were in some form of employment during term time. On average they worked 15 hours a week to help fund their studies. The majority of students work during holidays and earn an average of £1,426 a year.

In 1992, because students were receiving government funding, no figures were recorded on savings habits of students. At present, 56% of students have savings averaging £1,995 and some students even manage to increase their savings whilst studying. Also, more first year students are saving money before attending university, with an average nest egg of £1,148.

The study showed that nine years ago, 21% of students relied on their parents - again, this figure was heightened by the recession - but in 2001 this figure has been reduced by 4%. In the same year the number of students borrowing on credit cards stood at 6% this has now increased to 35%.