Students forced to resort to short-term loans to make ends meet

Following the ending of maintenance grants in 2016, debt among students has continued to rise. The reliance on loans means that students are being pushed to ever greater measures to survive.

According to figures from the Money Advice Service, 6 per cent of students have resorted to short-term borrowing in the past. These loans often involve very high interest rates and can trap students in debt. 

The ending of maintenance grants has increased the average debt across all students. The implications of rising student debt on non-tuition loans are that the average debt on graduation will often be highest among students from less affluent backgrounds.

Money Advice Service is an organization set up by the government to raise awareness around managing money.  They found that students from less affluent backgrounds are 34 per cent more likely to be unsatisfied with their financial circumstances than those who come from more financially secure backgrounds.

According to their figures, in the last six months 176,000 students have fallen behind or missed payments on university accommodation, credit cards, household bills or other debts.

Increase in Maintenance Loans, House of Commons Library, Student Loan Statistics 

The organisation recently held its first public awareness campaign, Talk Money Week. Its goal was to sensitize people to the issue of overreaching expenditure and to remove the general stigma around conversations about money.

As student debt continues to rise, it is becoming increasingly important for students to budget their expenditure. Students tend to spend a majority of their maintenance loan on recreational running expenses.

A survey by NUS shows that “excessive alcohol consumption” among students is becoming a trend leading to deficit budgeting.

The Money Advice Service recommends that students add up their total income and then carefully divide their expenditure. More tips on saving and managing student income can be found on their website.

Compounded with an increase in student loans, maintenance debt can leave students in a debt trap. Perhaps now is a better time than any for students to make some constructive changes in their daily expenditure.

Featured Image – NUS Twitter


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