Students consider leaving university as debt spirals

There has been a worrying uplift in students overall estimated debt – rising almost 14% to £19,217 compared to last year’s estimate of £16,909, according to the fourth annual Lloyds Bank Student Finance Report.

While nearly a third of those surveyed (59%) think they will be in debt of over £10,000 on completion of their course, up from 3% from last year (56%).

Possibly as a result, one in six (17%) of full time university students surveyed have considered leaving education to take up a full time job. The spiraling levels of debt are also putting a further strain on families, with 41% of students asking their parents for financial support to help them to finance their university education. 

The students surveyed who are in their first or second year have a much higher estimate of overall debt than average at £22,050 and £23,173 respectively. Nearly half (47%) of full-time students were worried about the levels of debt they were taking on due to their present degree. This is a three percentage point rise from last year, while a much greater level of full-time students that were undergraduates were concerned about the level of debt they would leave with, at 55% an eight percentage point increase higher than the average.

Around one in six students say they don’t have enough money to meet their monthly outgoings, with 17% of full-time students in 2014 claiming this to be the case. Two in five university students (40%) admit they are only just meeting their monthly outgoings, but money is tight – a two percentage point increase from last year.

Furthermore, 34% of first year undergraduates said that the cost of tuition fees was a factor in their decision about which university to study at, with 10% identifying it as a key factor. This was considerably higher amongst those who also said they were concerned about how much debt they would be taking on after completing their degree (44%).

With money tight, just under half of students have turned to paid work to supplement their income. 48% of students had a full or part time job within the last academic year, with females most likely to have a job (52%) compared to males (43%).

Of these, nearly half (46%) said they found employment to support themselves through university and help make ends meet, a three percentage point increase from last year, which rises amongst first year undergraduates to 49%.  An additional 26% said it was to pay for social activities and luxuries, while a smaller 12% cited experience in the job market and CV building as their primary motivation.

In addition, 17% of full-time students surveyed have considered leaving university and starting a full time job, while just 11% of students have considered taking a year off for travelling.

Phillip Robinson, Director of current accounts for Lloyds Bank said: “An ever increasing number of students are worried about the debt they are taking on to meet the rising cost of university, with students’ estimated level of debt at £19,217.  

“Student current accounts are in place to help ease the financial burden of university. Students should look for accounts that offer an interest and fee-free planned overdraft, as well as discounts and cashback offers. Money management tools are also in place for students, together with banking apps to help them manage their money on the go and feel more in control of their finances.”