Stress Awareness: The stress of student debt

Anne Balls

Managing money is one of the biggest stressors facing UK university students, as well as the foremost reason first-year students drop out (Times/Guardian, 2017). For international students and those from more disadvantaged UK backgrounds, the scale of debt can be even greater.

While the average UK student can now expect to finish with debts of about £50K, those from the poorest backgrounds will average £57,000 (BBC, 2017). It’s difficult to compare directly but international undergraduates are facing tuition fees that start at around £10,000 and can go up to £38,000 a year or more for medical degrees (QS, 2018).

July 2017 analysis from the Institute for Fiscal Studies found graduates in England left university with the highest student debts in the developed world, thanks to a combination of high fees, increased interest rates while studying and maintenance grants being replaced by loans.

Compare that with the US - known for its ‘high fees’. The average debt there on graduation is £28,000 (Guardian, 2017).

The Institute of Fiscal Studies forecasts that about three-quarters of students on the UK loan system will not manage to pay off their debts before they are wiped after 30 years. Students are reminded of the 30-year limit on loans in an attempt to alleviate the stress of student debt and encourage them to go to university.

Should we really be so flippant about this? Is this level of debt at all trivial? Repayment is only part of the issue. The size of the debt burden and day-to-day hardship is causing damage to our students right now.

According to a 2016 NUS Insight survey, just under two-thirds of students worry about their finances all the time or very often. More than one-third of students say that financial worries have an impact on their mental health.

Financial stress and stress of student debt – both day-to-day and long term – is linked to anxiety and depression and has been directly correlated to the surge in numbers of students who are using university mental health services.

This 28% jump in students seeking counselling coincides with the trebling of tuition fees to £9,000 (Guardian, 2016).

How can we help students?

While politicians argue the future of fees and loans, our Unihealth programme is beginning to help students. Using behaviour change techniques and evidence-based resources, our financial tips are some of the most read messages on our student mobile-messaging programme. These are actionable tips and evidenced tools that make students’ money go further and help build skills that last a lifetime.

Here is some of the content we have found is most popular:

Food – It’s one of your major bills. Learn to cook a few of your favourite dishes before you go to uni and get familiar with yellow label, discounted foods. 😊

Student discounts – Check out railcards, food and drink outlets, clothes, going out, music… The NUS website will tell you who gives discounts.

Boost your money-saving mojo with Brightside’s specially designed student budget calculator.

Extra funding – You may be eligible for scholarships and bursaries, fee waivers or hardship funds. Have you checked?

Tax – if you’re earning make sure you’re not paying more tax than you should. Claim any excess back from HMRC.

Off-peaking – Never heard of it? Google 'Mr Money Mustache' to find his positive frugality pointer. Save pounds by doing things differently.

Some of these pointers may seem obvious, but in our user survey 97% of students found these money messages helpful or very helpful. This is the stuff students need – and want.

The rise in tuition fees is old news, but the stress of student debt continues to be a major issue for students. Universities can support students by helping them to develop the knowledge and tools to manage their finances successfully.

The Unihealth programme is proof that students are receptive to, and grateful for, actionable advice on finances.