Category Archives: Student Finance UK

Money Saving Tips To Make A Student Loan Last

Money-saving tips to make a student loan last

Being a student is tough, particularly when it comes to finances. The cost of going to university is often too much for many students and they end up needing a loan.

If you’re taking out a student loan, there are a few money-saving tips to make it last a little longer.

Below you’ll discover some of the best ways to save money so you don’t feel the pressure of being permanently poor. Continue reading

This post was submitted by Paul Gray.

UK to Toughen on Student Loans to EU Students

The UK’s Student Loan Company (SLC) – a government-owned organisation that oversees the student loan system – is struggling to recover payments from EU students. As a result, legal action is being considered.

The SLC began issuing loans to students from EU countries for university study in 2006. Recent figures released for England only show that of those EU students who graduated in 2010, 27% or around 1,700 students – are officially categorised by the SLC as “repayment status to be confirmed”; or in other words, no repayments are being made and the SLC has no knowledge of the borrower’s work status or even residential location. Further, around 600 students – or roughly 10% – are known to be living overseas but have failed to provide the SLC with employment details and have now officially been noted as in arrears.

Of those students who graduated in 2011, 33% have been classed as “repayment status to be confirmed” and an additional 700 students are known to be resident overseas and are now officially in arrears.

For international students that remain in the UK to work after their studies, the process of paying money back to the SLC couldn’t be simpler. Repayments are automatically deducted from a worker’s pay check through the UK’s Pay As You Earn Scheme (PAYE), which also covers tax for example. The threshold before any payments are taken is currently at £15,000.

Of the 2010 graduates, around 700 from the EU have made payments automatically in this way in the last financial year. There are a further 8% who are still in the UK and working but whose earnings are below the current earnings floor.

Around 600 have actually repaid their loans early and in full.

The SLC is now serious about pursuing bad debts on its books. An SLC representative said: “We are currently in the process of reviewing accounts of both UK and EU borrowers who are known to reside overseas and who are in arrears, with a view to issuing legal proceedings against those who do not respond to the initial letters.”

A statement from the Department for Business, Innovation and Skills – who oversees the SLC – said: “The majority of overseas borrowers are honest and want to repay the loans they have received. However, all borrowers need to know they cannot evade their obligation to repay simply by moving overseas.”

£2.1 million was collected from EU students who graduated in 2010 in the last financial year, with the total outstanding debt for this group being £35.9 million.

Eradicating student loan debt problems

For a student, handling financial responsibilities is considered to be the toughest job. Students pursuing higher education rely on loans for their educational expenses. Before taking out the loan, ensure that you plan out your loan repayment strategy so that you can avoid incurring debt. Debt relief companies avoid managing student loan debt and remember, filing bankruptcy also will not discharge your debts incurred from student loan.

Therefore, here are some useful tips to reduce your debt burden and manage your money wisely:

1. The first step to reduce your debt woes is by calculating the total amount of debt you owe to the creditors. If you are not well organized, then you might have problems repaying your debts as you can lose track and default on your payments. You need to plan strategically to repay the loan. Try to prepare a list of the debts in descending order so that you can start working on paying your high interest debts.

2. Try to structure a budget so that it will be easier for you to curb your expenses and save a considerable amount to pay off the debts. You can prepare a list of your monthly income and expenses and formulate a budget plan according to your current financial situation. Budgeting will guide you to start within your means and in this way you can avoid incurring more debts.

3. You can approach your creditors to restructure you payment plan to make it affordable for you. You can convince your creditors regarding your financial crisis with proper evidence, for instance income proof, recent billing statements etc. Then your creditors might be willing to accept your settlement offer.

4). If you default on your student loan payment, then it can be a peril. Before taking out a student loan, try to analyse your career options so that you can secure a job after graduation. But if you are already struggling to pay off your student debt, then the above mentioned tips will guide you to repay your student loan debts.

This post was submitted by writerpatricia.

The Rising Cost of University Education in the UK

With the cost of university tuition fees potentially almost tripling in the UK, the question of “Is a university education really worth it?” becomes more and more relevant. In this infographic we take a look at some of the important (and not so important!) factors needed to answer that question.

How do you plan to cope with the raising costs of education here in the UK?

Cost of University Education in the UK

This post was submitted by Sean.

Should College Students Own Credit Cards?

Should College Students Own Credit Cards?

These small pieces of plastic were invented as a way to make life easier – with a credit card, you could make cashless purchases, you didn’t have to worry about theft when carrying around large amounts of cash, and you didn’t have to pay back the money immediately to your card company. Today however, credit cards have become more of a scourge than a blessing – they are responsible for most of our financial woes and have only served to sink us deeper into debt than ever before. The reason for this is that we’re not using them the way we should; a credit card is just like a weapon – it can hurt you badly if you’re not responsible with its usage.

So this begs the question – are college students ready for the responsibility of owning and using credit cards? Will the card bring them greater freedom or is it going to tie them up in debt that they could spend a lifetime repaying? The answer is not simple. While the advantages of owning a credit card are many, there is a downside to using these pieces of plastic as well.

On the plus side:

  • The biggest advantage of owning and using a credit card in college is that it helps you build a credit history. You’re not starting out with a blank slate when you graduate, and this makes it easier to secure a home mortgage or take out a loan to buy a car.
  • If you’re able to pay off your bills in full every month, you add to your good credit history.
  • You’re also able to borrow money at no interest – when you use your credit card, your card company is actually lending you the money to make a purchase. And if you pay the amount due in full every month, you’re actually living off someone else’s money and earning interest on your own.
  • You learn how to use credit cards responsibly at a young age, and this experience makes it easy for you to avoid overspending and using your card with abandon when you’re older.

On the downside:

  • The usefulness of the card depends on the character of the person who owns it – if you are responsible and understand the consequences of credit card debt, you’re likely to be fine. If not, the high interest and the resultant debt could stress you out and cause various other problems.
  • You want to graduate with a degree, not with credit card debt. But if you don’t pay your bills in time and in full, you could end up paying for it the rest of your life. Besides, your credit history too takes a beating, one that is hard to recover from.
  • It’s easy to give in to temptation and use your card even when you know that you cannot afford to pay back what you’ve spent when your bill is due.
  • If you borrow cash against your card, the interest rate is exorbitantly high – most students are not aware of this and many other facts about credit cards and get into financial trouble because of their ignorance.
  • Credit card companies lure you in with offers and freebies; however, if you don’t read the fine print and know what you’re getting into, you could end up with a bad credit history and a mountain of debt.

Remember, we’re not talking about using a parent’s card and not having to worry about the monthly repayment. So unless a student is willing to accept responsibility for and be able to make the payments on time and avoid the high interest that credit card companies charge, it’s best to stick to using a debit card.

By-line:

This guest post is contributed by Mark Macaluso, he writes on the topic of Masters in Accounting . He welcomes your comments at his email id: mark.macaluso985gmailcom.

This post was submitted by Mark Macaluso.

How To Find A Student Job When Still In College

Finding a job that we love and a career that is fulfilling is probably the reason most of us go to college, so imagine how great it’s going to feel when you graduate knowing you have a position lined up and all ready for you. Not all of us begin the job hunt when still in college, but what with the economy being down and jobs being harder to come by than they were before, every college student must make it a point to start looking for a way to earn a living even before they graduate. It’s not as hard as it looks at the outset; to search for and find a job while still at college, here’s what you need to do:

  • Start early: It’s never too early to start looking for a job. Even if you’re in your freshman year, make it a point to cultivate and nourish relationships with people who will be able to offer a helping hand when it comes to your job search. Look to alumni of the college and other people who have wide networks of contacts. And most important of all, know what you want to do when you graduate and don’t waste time changing majors in your first year.
  • Use all the avenues open to you: Start with your college’s career service office and check out which companies are looking to hire this year and which ones are keen to take on graduates with little or no experience. Begin to look for opportunities and send out resumes on online job portals even as you’re busy with activities and lessons in your senior year. It is a tedious job, but one that must be done. The more resumes you send out, the higher your chances are of securing a job. Besides this, you must scout for options at career fairs that are held in your senior year. You can gauge the mood and mindset of potential employers and decide which career is best suited to your talents and temperament.
  • Get some experience: Use your summer breaks and other vacations to gain experience working as an intern in a firm that does work in the field you’ve chosen as a career. While this does not pay in terms of money, it’s payback time when employers are searching for people with experience. If you’re undecided about a career choice, internships help you decide on and choose jobs that you are passionate about.
  • Stay connected: In today’s world, it’s easy to stay connected at all times what with the sophisticated technology that is available at our fingertips. Use the power of social networking to expedite your job search process – Facebook, Linkedln and Twitter can be used for so much more than just fun and entertainment.

Even though the job market is down at present, the process of searching for a job has become much easier because of the multiple avenues open to us. So use them wisely and ensure that your future is secure even before you graduate.

This guest article was written by Adrienne Carlson, who regularly writes on the topic of accelerated online degrees . Adrienne welcomes your comments and questions at her email address: adrienne.carlson83@yahoo.com

Banks’ Student Love Affair Over

Financial institutions in the UK used to love students and would often go out of there way to sign them up. And why not? Students represent a fantastic opportunity for banks and credit card companies given their future earning potential and the fact most students tend to stay most their lives with the bank they had as a student. Banks used to spend millions in freebies trying to attract fickle students but are the days of student perks over?

The student financial market is seeing change, just like other areas of the economy. Freebies are disappearing as are added extras and favourable borrowing arrangements. Increasingly, you’d be lucky to be offered free cinema tickets along with your basic bank account – useful, eh? The credit crunch is hitting the student market just like others and the banks are seriously tightening their belts. No more iPods and cheap overdrafts. Sorry. There is of course another added risk for the bank which has shaken the very attractiveness of the student. With many students leaving university over £20,000 in debt and the credit crunch also harming the job market, there are worries that students may struggle to get those well paid jobs. This would put pressure on students’ ability to re-pay any bank debts and of course, this is something the banks worry about a great deal.

Whilst the situation might change, unfortunately it won’t in the short time. And remember, banks are also tightening their application criteria. You may be offered a reduced credit card and for many, the idea of a student credit card is out the window.

Top 10 Student Money Tips

Student money guide from UK Student News and EventsMany UK students are waiting with baited breath for their A level exam results. For many of you, going to university will represent the first time you’ve had real independence and responsibility. Part of this responsibility will be managing your money. In fact, student money matters rate highest of all things currently worrying students. If you have decided to take a student loan, you will be receiving three lump sum payments throughout the year, which you will have to manage; bills need to be paid and of course you need enough money to live and party. Getting it right financially is very important; being down in the dumps with money matters will not only make you miserable, but could affect your studies too. But don’t panic, there is some great student money tips in this article to ease you into student life.

When you reach 18 years of age, you begin to come of age financially and unfortunately, you become a prime target for banks. They want to sign you up as quickly as possible – after all, you’re soon to be a graduate with great earning potential! – and will offer you all manner of incentives and schemes, which more often that not, can be impossible to decipher and make comparisons between the banks. In the UK there are 11 financial providers providing student services. These will all include interest free overdrafts. However, it is important to remember when arranging your student money matters that not all student accounts are the same; in fact, they vary considerably. Get the low-down with our top 10 student money tips.

1.    Don’t make any decisions based on incentives

One of the most important student money saving tips is to make sure you choose the right account. Making a decision based on freebies and incentives is not a smart money tip and could make things harder for you in the long term. Being a student, your overdraft will be the most important thing for you; it will enable you to survive! You should be sure to research the best overdraft deals rather than being impressed by free cinema tickets or CDs. The only exception to this student money saving tip is in the case of NatWest: if you live a long way from your university and will be doing a lot of travel, NatWest’s offer of heavily discounted rail travel should be considered. Freebies really shouldn’t be a sweetener for you when it comes to opening a student account; once you receive your NUS card as all students do, all manner of discounts will become available to you anyway.

You should also avoid any accounts which offer you a cash incentive, such as Lloyds TSB. While it may sound great to be given some free cash, nothing is ever free in life. If you read the fine print you’ll see that 80% of your cash incentive will only be given to you if you refer 4 friends to Lloyds TSB and they open accounts and deposit at least £200.

2.    Choose the best account for your needs

Now that you’ve begun to look past the incentives and freebies, what features do students need with their accounts? This is really a question that can only be answered by you, but our student money advisors have come up with some things you should be thinking about.

Unless you’re one of a lucky few, as a student you are unlikely to be interested in what credit interest is on offer – you’ll be living in the red for most of your student days, believe me! So, student money saving tip two is to really research the overdraft facilities available – these really will vary from bank to bank.

3.    Save as much as you can before you go to university

Having recently finished your A Levels I’m sure all you’re thinking about is letting your hair down and having a good time. However, you should think about doing some work during the summer break. If you can put just a little bit of money aside for your future it will make a big difference. A great money student tip is to make your summer savings work hard. Instead of leaving your money sitting in your current account earning a very poor rate of interest, you could consider investing it more wisely. We’re not talking about tying your cash up, but there are definitely more efficient uses for your hard earned cash. You should look at putting what money you can into a cash ISA which will give you interest at over 6%. Even better for students, money earned in interest on an ISA is completely tax free!

4.    Budget and stick to it

Part of the university experience is learning how to manage your money. It can be so easy to just draw £10 or £20 at a time without giving it any thought; this will however soon add up! If you let your spending run away you could find yourself without any money to pay bills and to enjoy your time at university.

It may sound boring and I bet your parents have already bored you to death with this topic, but setting a budget is an important aspect of student money matters. More impotently however, is having the discipline to stick to your budget.  Our student money advisors recommend that you should try to incorporate a 10% ‘what-if’ allocation in your budget. Run through your total income and your total expenses and you can see what money you have left to enjoy yourself.

5.    Use your student loan wisely

You should receive your student loan payments three times throughout the academic year. The first instalment should reach you around the same time you start university, during fresher’s week. This can be the most dangerous time for student finances; every club will try to sign you up, you’ll want to go out with your new friends and you will of course be caught up in the excitement of being at university. Try to keep your head and don’t blow all your cash really quickly – you’ll be stuck with no cash until your next loan payment and believe me, from personal experience, it is no fun having no money at university.

6.    Be cautious of credit cards

This is the largest of all student money matters and can cause serious amounts of grief if mismanaged. I unfortunately had to find out about the dangers of credit cards myself. I quickly overstretched myself, couldn’t pay the bills and find myself in quite a bit of trouble. In fact, despite graduating many years ago, the mismanagement of my credit cards still affects me today. The problem is that you may be offered several cards, with what appear to be small limits, normally in the range of £500. However, with a very limited income as a student, even paying this small debt off can be a challenge. The best student money advice we can give surround credit cards is only take one for a specific purpose – emergencies, for example – don’t get one just for the sake of it. Most importantly, please remember that if you do find yourself in financial trouble, you are not the first and you certainly won’t be the last. If you are struggling with credit card debt you should get help as soon as possible. Don’t ignore the problem. Speak to you university and get help. Don’t ignore the problem – it most definitely will not go away.

7.    Make use of online banking

Modern technology has made it much easier to keep a check on your finances. More often than not, all your student money matters can be dealt with through your online banking facility. Make sure you login a couple of times a week and look through all payments which have left your account. If you see a payment which you don’t recognise, you should call your bank immediately to have it investigated.

8.    Don’t run away from your problems

I touched in this when discussing credit cards. However, it is so important that it definitely deserves its own spot in our top 10 money saving tips for students. It is likely that during your time at university you will run into financial difficulty at some point. It is so important for you to face any problems you have and deal with them as quickly as possible. Not only will this stop any charges from getting out of control, but it will help you to quickly eliminate the stress from your life. There are a wide range of sources of money help for students, from either your bank, your university or online. If you are approaching your overdraft limit and know that you will exceed it, speak to your bank. Unarranged borrowing will cost you a fortune. It is much cheaper to ask them to temporarily extend you overdraft, normally for a charge of around £20. Do the right thing, pick up the phone and speak with your bank, don’t hide away from your problems. Remember that all your financial activity will be recorded on your permanent credit file and unresolved issues at university can come back to haunt you in later life. I can’t stress this enough – don’t make mistakes like me, be responsible with your money!

9.    Protect yourself

Just because you’re having the time of your life away from home and at university, don’t let your personal security lax. There are some simple steps you can follow to secure your student money. Don’t ever ask a friend to go to the ATM for you or let anyone use your card and PIN. Recent surveys have found that around 70% of all students allow their friends to use their card. This is very bad practice. You should also ensure that you properly dispose of your receipts and any communication from your bank. Student money advisers would recommend you to keep your bank statements, but if you wish to dispose of them, invest in a shredder to ensure financial security. Identity theft is sadly on the increase, but if you are aware of the issue, you can take measures to protect yourself. As an extra security precaution, we’d recommend that you keep your correspondence address as your parent’s address. Living in shared accommodation presents a real opportunity for identity theft; by keeping your confidential documents as far away from prying eyes as possible can be real help.

10.    Buy insurance

Many students will choose to ignore this option – do so at your own risk! You may think your stuff is safe in university halls, but unfortunately thefts do happen on campus. You will probably be provided with details of great student insurance rates from specialist companies as part of your university welcome pack.