University Life
By Richard Green, Sat Dec 10th

Recent findings from the Educational Policy Institute indicatedthat the UK is the third most expensive place in the world to goto university. Combine this with figures from the Prudential,showing that a third of university students have consideredabandoning their studies due to the financial strain they haveencountered, and it is not surprising that many prospectivestudents are finding the need to seriously think through themerits of going to University.

Whilst it is true that there are currently loans available fromboth the government and from banks that are designed to seestudents through their period of studies, for many this willmean emerging into their adult life with mountains of debt.Barclays Bank has stated it believes that once top-up fees areintroduced it will cost about £33,000 to put a child throughuniversity in England and Wales. At a time when the number ofstudents has greatly increased and the number of high paidgraduate careers appears to have diminished, students now haveto factor in the cost of living when making the importantdecision of where to study. In an article by the Scotland OnSunday (http://business.scotsman.com/archive.cfm?id=644512005 ),the experiences of a university student from Glasgow show thatthe question of finance already weighs heavy for some studentsin their choices of where, or even if, they can study. Movingout of the parental home to take full advantage of universitylife may become less of an option for students as costs increaseand financial assistance decreases.

The president of the National Union of Students in Scotland,Melanie Ward, said: "I think most students underestimate theamount of debt they will leave university with, which will beabove £13,000."

With graduates needing to earn £22,000 a year in order to payoff anything more than just the interest on their student loans,many people are in their 30s or even 40s before their debt isfully cleared.

Graduates are also finding that they have to make toughdecisions as soon as they complete their courses.

With banks,building societies, credit card companies, and other privatesector lenders requiring the sums borrowed to be repaid. Theimmediate question of, “Do I build on the knowledge, workexperience and internships, that I've had over the last fewyears and pursue my dream career, or does the chasing of theperfect job I’ve been working towards for years, have to takesecond place to getting back into the black?”, is now an all toointrusive reality for many.

Some students are finding it so difficult to make ends meet thatthey are trying to seek alternative means of resolving theirdebt. Checkmyfile.com ( http://www.checkmyfile.com/) has shownthat that the number of students declaring themselves bankrupttripled in 2004. Another method of reducing graduate debt isgetting the loans written off through undergraduate bursaryprogrammes by the military or teacher training, in return foragreeing to a placement period following graduation. There arehowever some potentially serious drawbacks to both types ofschemes. These include possible damage to future careerprospects or compulsory placement period in a career which thegraduate does not want to proceed with long-term.

All is not doom and gloom however, with university authoritiesand the Students’ Union offering advice at college, and aftergraduation. Public sector organisations like the Citizens AdviceBureau ( http://www.cas.org.uk/ )can provide advice if realdifficulties occur. Speaking directly to your lenders can oftenresolve problems. Switching between loans and credit cards is agood way to help reduce interest payments. Financial websiteslike Moneynet ( http://www.moneynet.co.uk ) can provide a usefulsource of information by enabling students and graduates to seewhich loan or credit card provider is currently offering thebest deal and 0% introductory rate.

It seems budgeting and hard decisions are required by allpotential students these days, with a degree in personal financea desirable pre-requisite before starting actual studies.

About the author:Richard works in Edinburgh for a media company, occasionallywriting for the personal finance blog Cashzilla, and drinkingtoo much coffee.