Business Recovery and Insolvency Practitioners

NEWS: Student Debt

Added: 13/12/2004

According to Barclay’s latest graduate survey, the level of debt owed by a student upon graduation now stands at £12,069 - an increase of ten per cent on last years figures.

Those graduates who aspire to home ownership upon successfully finding employment may well struggle to achieve such goals, as the average salary of a graduate stands at a mere £18,175. Whilst such debts are an unpleasant but increasingly unavoidable consequence of a university education, if dealt with properly, they can be controlled and repaid without the need for sleepless nights.

Our advice to graduates is as follows:

1. Prioritise the repayment of your debts: Credit cards will usually charge the highest rates of interest so ensure that these are repaid first. Student loans attract an interest rate of only 2.6% and only have to be repaid once you attain a salary of more than £14,000 per year, so this borrowing is a low priority.

2. Consider taking advantage of graduate overdrafts and loans to repay higher interest debt, as these offer low interest rates and are sometimes interest free.

3. Budget your income to ensure that your overdraft is reducing and not increasing, and be cautious if considering taking on further debt in respect of purchasing a car for instance.

4. Hide your credit cards!

If you would like to talk to someone about your student debt problems, or you know somebody who would benefit from professional advice, please speak to a member of our team who can offer a free consultation.

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