First year students now expect £30,000 of student debt
The fifth annual Lloyds Bank Student Finance Report reveals another year-on-year uplift in students’ overall expected debt – rising by over 15 per cent to £22,131, compared to last year’s estimate of £19,217.
Expected levels of debt for students at all stages in their education have now reached record levels, with 49 per cent of full-time students in 2014/15 saying that their overall debt after completing their current university course will be over £20,000. First year undergraduates now expect to leave university with an average £30,000 of student debt.
Although estimated levels of debt are increasing, there has been little change in students’ concerns with the levels of debt they are accumulating; 44 per cent said they were concerned, compared to a similar number (47 per cent) last year. However, there is a significant difference between genders, with 48 per cent of female students saying they are concerned compared to just 39 per cent of men.
Of the 85 per cent of students using student loans to finance their education, 19 per cent believe they will never pay off their student debt, and 31 per cent believe it will take over 20 years. Both figures have increased since 2013/14, when 14 per cent felt they would never pay off their debt, and 29 per cent thought it would take over 20 years.
In addition to concerns about levels of future debt, many students also struggle to make ends meet each month while studying; 54 per cent are unable to meet, or just meet, monthly outgoings (36 per cent of this group can meet their monthly outgoings, but money is tight).
Two in five students said they feel they meet their monthly outgoings with money left over. Of this group, 48 per cent kept any surplus money in their account, 22 per cent bought or did something to treat themselves, 11 per cent went out for a special meal and 9 per cent booked a holiday. The remaining 10 per cent put the additional money in to a savings account or ISA.
Despite the financial implications of studying, student confidence in getting a job in a preferred industry after graduating is high, with 58 per cent feeling confident, compared to 34 per cent that do not (of which 10 per cent are not at all confident, and 24 per cent not very).
Confidence is highest amongst first year students, at 62 per cent, and lowest among those in their second year of study (53 per cent).
Confidence varies between subjects being studied, in particular medical students (93 per cent), computer sciences (71 per cent) and business, economics or accountancy (69 per cent). At the other end of the spectrum, just 32 per cent of psychology students were confident they would secure a job in their preferred field, along with 37 per cent of arts and humanities students.
“For those that find money is tight at university, student current accounts are in place to help ease the burden,” said Claire Garrod, current accounts director at Lloyds Bank.
“Students should look for accounts that offer an interest- and fee-free planned overdraft, as well as discounts and cashback offers. Money management tools and banking apps can also help students to manage their money on the go and feel more in control of their finances.”