One in three prospective students 'not worried about debt'
Money education charity Credit Action has warned that student life is normalising the debt culture, after a new survey revealed that 36% of young people see being in debt as a 'normal' part of university life. The charity is concerned that a lack of understanding about debt and personal finance is enveloping the young in a dangerous debt culture - where debt is an acceptable part of everyday life - and urges students and their parents to use the information available to them in the Student Moneymanual (a partnership between Credit Action and Santander) to prevent financial difficulties arising in the future.
The survey also found that of those students planning to apply to university:
* Over 1 in 4 (27%) had never received any form of financial education (including formal teaching, informal advice, websites, leaflets, university talks);
* 46% said they have never had discussions with, or advice from, parents or relatives about personal finance.
* Under one third (27%) of respondents cited financial issues as a fear of university and only 10% spontaneously cited "getting into debt" as a fear;
Almost two thirds (65%) said they were concerned about their ability to cope with money and finances at university.
Every prospective student in the UK will shortly receive Credit Action's Student Moneymanual to ensure students understand university finances and to communicate the principles of good money management, including budgeting, banking and the sensible use of credit. The Student Moneymanual for 2012-13 will be distributed to all prospective university students via UCAS, equipping 450,000 young people with essential life skills; it can also be downloaded for free from the Credit Action website and is available from Santander Universities branches.
Michelle Highman, CEO of Credit Action, said: "I am very concerned that many prospective students are sleep-walking into significant debt, which is now the norm for most students. It is likely that the Student Moneymanual will be the only source of help they receive in understanding their options both in applying for Student Finance and in minimising their total debt. Whilst it is comforting that - on this basic level - students will have access to financial information and advice through the manual, it is vital that more is done to help young people manage money and avoid unnecessary debt. Otherwise, the continued normalisation of the debt culture will create devastating financial consequences in the future. If we are normalising debt, we need to normalise financial education."
Martin Lewis, founder of MoneySavingExpert.com and head of the Independent Taskforce for Student Finance Information, endorsed the Student Money Manual. He said: "University is a great time for learning and one of the most important lessons life will teach you is learning how to handle your money. This booklet is a great way to start to understand your finances before you go and while you are at university."
Mary Curnock Cook, UCAS Chief Executive, said: "UCAS is committed to ensuring that applicants have access to everything they need to make a fully informed choice about higher education. Access to comprehensive information about finance arrangements is really important. This booklet clearly explains many aspects of student finance including available loans and grants, plus helpful advice on budgeting while studying."
The Student Moneymanual is sponsored by Santander. Charlotte Hogg, Head of Retail Distribution and Intermediaries, says: "At Santander we understand that university is an exciting period for students but also one where they need to manage their finances sensibly. We believe the Moneymanual offers students comprehensive and sound financial advice to ensure that the only thing they need to worry about during their time at university is their studies. We are proud to support Credit Action in the publication of this manual for a second year running."
Copies of the Student Moneymanual (2012/13) can be downloaded from: http://www.creditaction.org.uk/helpful-resources/moneymanuals/students.html
Read more at www.creditaction.org.uk/helpful-resources/moneymanuals/students.html