Better education will help reduce student debt, says Payplan

Numbers of parents seeking help to resolve their children’s student debt issues are rising, according to national free to client debt solutions and advice company Payplan.

The company’s phone and website help lines have seen a worrying increase in cries of help from anxious parents keen to resolve their children’s financial crises.

Even grandparents are being called upon to help ease this financial burden, according to a retirement equity release company, with the average ‘Bank of Gran and Grandad’ paying out £23,328 to help families keep on top of costs.

Credit card debt and money owing on unsecured loans - on top of the student loan - are the main issues facing graduates and their families.

All represent a further knock for families who have struggled to put their children through university, often making sacrifices themselves, only to find more money problems facing them long after graduation day.

Payplan now wants to see more done to prepare and educate students to the financial hurdles that could potentially lay ahead for them after university.

“Debt is part and parcel of society, we can’t sweep it under the carpet and pretend it’s not happening,” said John Fairhurst, MD at Payplan. “It needs to become part of the school curriculum, not just something touched on in economics, but a core subject taught to every pupil as early as possible.”

Last week 200 MPs signed a motion calling for financial education to be made compulsory in schools. At present, ‘how to handle money’ is only taught ad hoc in a handful of schools.

“We send teenagers off to university and college and the grant system means they automatically rack up millions of pounds of debt between them. What advice or information is there beforehand to prepare them for this?” added Fairhurst, who welcomed the MPs’ action.

The national free to client debt solutions company is exploring how its own liaison team could work with schools to provide information for the classroom. It says words such as bankruptcy, debt consolidation, and Individual Voluntary Arrangements (IVAs) should form part of everyday language, not something students stumble upon when the term applies to them – it’s too late by then.

Payplan’s qualified consultants will always discuss all options with students and their families to help find a solution to consolidating student loans. More details and advice are available on the Payplan website: payplan.com