UK Graduates Looking Short-Term At Their Long-Term Financial Responsibilities

With almost two thirds of university entrants from England and Wales who applied for maintenance grants for this year being unsuccessful, and the average graduate owing £13,501 when they leave, according to Barclays, combined with a survey by High Fliers Research showing that only 21% of students were confident of managing to enter a graduate-level job this year, it is not surprising that there is a feeling of gloom hanging over many UK university entrants.

According to a survey of students from 30 institutions; 63% believed there are not enough graduate jobs for everyone leaving university this year, with a fifth stating that they felt that there were only limited jobs available.

Jeremy Law, the head of student and graduate banking at Barclays said, "If this trend continues, students starting a three-year course this September could be graduating with debts of almost £20,000?graduates will find themselves with debts for years to come which may affect their ability to buy homes and invest in pensions?prince or pauper, these levels of debt may act as a deterrent to some people considering going to university."

There are sources of help advice available to prevent student's finances snowballing out of control, with important financial institutions such as Moneynet and other online comparison web sites providing guides to help students with their money, and Barclays Bank recently encouraging students to;

"Consolidate their borrowing and pay off the debts with the highest interest rates first by making use of the cheapest borrowing options, for example, interest free graduate overdrafts or graduate loans?where possible graduates should keep a tight reign on their finances to help set them up financially for the future."

With increases in general levels of graduate debt, negativity surrounding job prospects, and the government concerned with meeting its 2010 target of getting 50% of the under-30s into university, you might expect trepidation over long-term debt to be entering into the psychology of both students and government alike, however this does not, overall, appear to be happening. The government is determined to continue with its plans, and students are still racking up huge student loans and personal debts by focusing on everyday financial pressures, rather than their future.

While worries about money add to their levels of depression, anxiety and stress, university students in Bath declared that it was the short-term lack of cash for paying bills and covering everyday expenses that caused them the greatest concerns.

Students interviewed By Dr Adrian Scott of the University of Bath indicated that, "They think there's nothing they can do about the debts, so there's no point worrying".

A report, conducted for Liverpool Victoria has suggested that in 18 years time when today's 'Child Trust Fund Generation' go to college, English student debts will average approximately £43,825 which would be about 83% of their first years graduate salary. A worrying figure, but one which does not, according to Liverpool Victoria; "take into account that there is a big push by some universities to get the cap on top-up fees lifted and this would have a massive effect on these figures - probably doubling or tripling the debt."

Dr Scott also found that students were becoming more accustomed to the idea that they would have substantial levels of borrowing, and their perceptions of what was considered an acceptable level of debt was changing. Cognitive strategies rather than financial adjustments were occurring to justify long term debt instead of dealing with it head on. An annual Unite/Mori survey analysing student attitudes, published earlier this year, showed that students were becoming increasingly acclimatised to the idea that, as a student, they would have to acquire certain amounts of debt, which would need to be paid back after graduation. Possibly a major shift in attitudes towards debt will occur should the cap be lifted on top-up fees, but presently students are not being put off going to university by the idea of starting their working life shackled with debt.

Overall personal debt in the UK is increasing at a rate of £1m every four minutes however the rate of change in the levels of student debt are accelerating far faster than the already worrying UK average (five-fold increase in total graduate debt over the last decade). If no change is made to the graduate jobs market or to student funding, and future graduates are to avoid running the risk of being branded an adverse credit risk at the start of their earning career, then they need to take the financial bull by the horns at an early stage, and take long-term financial planning seriously whilst at college, to reduce their arrears on leaving rather than looking to the never-never.

Resources: Moneynet University of Bath

Richard lives in Edinburgh, occasionally writing for the personal finance blog Cashzilla, and staring out the office window when he should be working.

---

Personal Finance - Have Consumers Had a Belly Full of Personal Debt?

For months, we were trigger-swipe happy, putting our groceries, clothes,... Read More

The Magic Of Compound Interest

Christians are called to be good stewards of God's resources.... Read More

Expenses A ? What Are They And What Can We Do About Them

It is crucial as an individual who is striving for... Read More

Bankruptcy Chapters Explained

Chapter 7The potential chapter 7 debtor should understand that a... Read More

UK Graduates Looking Short-Term At Their Long-Term Financial Responsibilities

With almost two thirds of university entrants from England and... Read More

Understanding Your Finances Can Give You Power And Choice

What is finance and what do you need to know?... Read More

Should You Borrow From Your 401(k) Account?

If you have a 401(k) account, it can be very... Read More

Basic Bank Accounts Failing the Basic Needs of Consumers

The lists of bank and savings accounts that are available... Read More

How To Survive The Grocery Shopping Blues

If you are the normal consumer, then you've probably experienced... Read More

Why You Should Seek Professional Help With Asset Management

Everyone needs to maintain their lives. What I mean by... Read More

5 Ways to Absolutely Destroy Your Finances!

Ben Stein has a book called How to Ruin Your... Read More

Adverse Debt Levels Blight UK Consumers Personal Finances

Debt levels are at an all time high in the... Read More

How to Choose Wisely a Credit Card

So, you've made the decision to apply for a credit... Read More

Succession Planning

Have you ever thought about what you are going to... Read More

How Check 21 Affects You

The Check 21 Law is the new federal law for... Read More

How to Save Money in a Grocery Store

Now there are ways to save money in the grocery... Read More

Are You Ready To Be Fired?

Your boss has just informed you that your department is... Read More

How to Save for A Down Payment

Saving for a Down Payment is hard work, so it's... Read More

Honor Those Who Serve with Checking Account Supplies

Our global society has had a wake up call in... Read More

Dramatically Improve Your Stock Trading Success

Get Access to Realistic profitable strategies & discover the mindset... Read More

Car Donations and Used Car Donations

Car donations and used car donations are the way many... Read More

Roth IRA Contributions - IRS Rules

Confused about whether you can contribute to a Roth IRA?... Read More

Five Secrets for Long-term Financial Success

Future financial success is not a guarantee that any one... Read More

Personal Finance ? Why You Should Compare, not Despair

Sorting out your personal finances can be a tricky and... Read More

What Happens if You Die Without Making a Will

If you die without making a Will in the UK,... Read More

Know Thy Finances

The first step to financial success lies in knowing your... Read More

Make or Break Your Retirement!

The Prudential has dubbed those who refuse to leave home... Read More

Saving Dimes Can Go a Long Way

On the other hand, there are those people who are... Read More

Vacations Made Easy: Buying a Florida Investment Property

Vacations Made Easy: Buying a Florida Investment PropertyA relaxing beach... Read More

Your Dry Cleaner?s Double Standard

Women are charged more for dry cleaning services. Don't fume,... Read More

Bank On It: Places to Hide and Invest Money

Today I passed a thermometer at a bank that read... Read More

Identity Theft is a Major Problem: Whose Responsibility is It to Protect the Consumer?

We have heard a lot about consumers' personal information getting... Read More

Avoiding A Nightmare On Renovation Street

You've decided you want a bigger, better and more desirable... Read More