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Graduating in debt
Fact: The UK’s largest ever survey of student finance, published on Push.co.uk, reveals that students who started at university in 2007 can expect to owe over £17,500 by the time they leave and new students should add on nearly £4,000 more than that.
Like a lot of new graduates, Mary is not earning that much. She hasn't decided yet on her career path, so for the time being she is working in a call centre, and does cleaning part-time at the university halls of residence. Luckily for her, the cleaning job allows her to stay at the residence on very cheap rent, which has alleviated some of the financial pressure, as her monthly income comes in just under £1000.
But she is suffering under a mountain of debt, as she owes £20K, of which she pays off £750 a month. So buying that dream outfit is out of the question, and so is that holiday in Ibiza she's had her eye on. She also owes £13,500 in student loans, but until she makes more money she's is not required to pay it off.
To add more stress, in a few months time she will have to look for new accommodation which probably won't be as cheap. On her current salary, it will be hard enough struggling to keep up with her debt repayments let alone paying more for rent.
So what are her options? She could move back with her parents, which she may not find that attractive after being so independent, but in her current situation she can't be too picky. With a university degree, the chances of getting a better paying job are more likely. Bankruptcy is one option, but it should be considered very carefully. Although her debts would be written off, her student loans wouldn't, so once she declares bankruptcy she will have to start paying those off. Her bankruptcy will also remain on her credit record for six years, making the chances of getting future credit much more difficult. With all this to think about it she thinks her best option is to get in touch with the Consumer Credit Counselling Service which offers free advice on debt issues. And with their help and some careful budgeting, she should be able to sort herself out.
Like a lot of new graduates, Mary is not earning that much. She hasn't decided yet on her career path, so for the time being she is working in a call centre, and does cleaning part-time at the university halls of residence. Luckily for her, the cleaning job allows her to stay at the residence on very cheap rent, which has alleviated some of the financial pressure, as her monthly income comes in just under £1000.
But she is suffering under a mountain of debt, as she owes £20K, of which she pays off £750 a month. So buying that dream outfit is out of the question, and so is that holiday in Ibiza she's had her eye on. She also owes £13,500 in student loans, but until she makes more money she's is not required to pay it off.
To add more stress, in a few months time she will have to look for new accommodation which probably won't be as cheap. On her current salary, it will be hard enough struggling to keep up with her debt repayments let alone paying more for rent.
So what are her options? She could move back with her parents, which she may not find that attractive after being so independent, but in her current situation she can't be too picky. With a university degree, the chances of getting a better paying job are more likely. Bankruptcy is one option, but it should be considered very carefully. Although her debts would be written off, her student loans wouldn't, so once she declares bankruptcy she will have to start paying those off. Her bankruptcy will also remain on her credit record for six years, making the chances of getting future credit much more difficult. With all this to think about it she thinks her best option is to get in touch with the Consumer Credit Counselling Service which offers free advice on debt issues. And with their help and some careful budgeting, she should be able to sort herself out.
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In debt and need help?
Call a CCCS counsellor on 0800 138 1111.
