UK students’ mental health and general well-being are suffering because of steep level of debts racked up during university, a new research by Intelligent Environments found.
A total of 75 percent of students who receive maintenance loans feel stressed about their debts accrued while in university, with over a third saying they cannot afford their weekly food shopping.
It also found that exorbitant tuition fees and rising costs of living were the reasons for the “overwhelming” stress levels felt by the majority of students.
David Webber, the managing director at Intelligent Environments, called the results “worrying” and that such debt can have a “devastating effect” on people, “impacting everything from exam results to relationships with partners, family and friends”.
Rent stood out as UK students’ main financial concern, with 78 percent of students saying that was the top item they spent their money on.
More than half said they ran out of money completely before their next payment was due. This has led to over a quarter of students admitting to missing their rent payments with one in seven saying they have even been chased by debt collectors for doing so.
After rent, the two highest expenditure for students were found to be food (69 per cent) and utility bills (47 per cent).
This new finding follows a research last year, which found that the total student debt in UK is currently estimated at £71 billion, with students in England leaving university with the highest average debt in the English-speaking world.
Earlier this month, the UK government began controversial plans to sell student debts to private loan companies, in a move that experts warned could lead to high costs on students and taxpayers.
Forced to cope, consequences on students are dire
The sheer cost of university is straining the industry and its students from the application process right until after they graduate – prospective students are put off from applying to college whereas those who graduate find themselves in great debt.
Figures from the Universities and Colleges Admissions Service (UCAS) this year showed an overall dramatic decrease in university applications by prospective domestic and international students.
While in college, those who receive maintenance loans said they had to depend on additional sources of income to tide them over for the school term, with nearly two-thirds (65 per cent) turning to parents or other family members in times of need.
The rest had to rely on their student overdrafts (58 per cent), dip into their savings (27 per cent), incur further debts on credit cards (six per cent) and even take out payday loans (nine per cent) to survive.
And with the increasingly unaffordable fees and living costs, students who graduate then find themselves unable to repay the unmanageable loans that they have taken out, industry experts warned.
— Vonnie Sandlan (@VonnSand) December 7, 2015
As a consequence of this sordid state of student finances, the mental health and general well-being of students are suffering as they try to cope with this.
“There is an undisputed negative relationship between debt and mental health. Being unable to pay bills is particularly stressful,” said Estelle Clarke, advisory board member for the Intergenerational Foundation to The Independent.
The National Union of Students (NUS) vice president, Shelly Asquith, said: “Students are being mounted with colossal levels of debt that are increasing year on year.
“We also believe that increased poverty and debt is a major factor in the sharp increase of students experiencing mental ill health.”
Fionnuala Allen, a second year Nutrition student at Manchester Metropolitan University, receives maintenance loan and works around 30 hours per month but most of her money goes to her rent, food and utilities.
To cope, Allen had to make sacrifices, cutting back on her food or skipping classes so she could work when shifts become available.
“People assume students spend their money on nights out, but I regularly have to choose not to go out, so I can buy food. I’ve also had to miss classes and delay assignments when shifts become available and I have to take them when I can,” Allen said
“My housemates and I were also on a diet of rice and peas for a week because it’s cheap and you can buy it in bulk,” she added.
“It’s really stressful constantly thinking about money when I should be focusing on my studies.”
Webber called on banks to help students in their relationship with money through digital solutions so that students can “keep on top of outgoings and monthly budgets” and without having to resort more forms of borrowing.
“Greater visibility around spending habits will make people more aware of their bank balance, making it harder for them to go into debt unnecessarily,” he added.