Advice to Young People
Young people are particularly vulnerable to debt,
as unemployment and low pay is a major factor, as well as tempting offers
such as 0% finance on goods purchased, and discounts offered by store
cards. Also, young people tend to go out more socialising, which can
be an additional drain on resources.
However well you manage your money, if you've got little money coming
in, it is much easier to get into debt.
Obsessive gambling can quickly lead to debt. Most young people with
gambling problems play fruit machines although more recently lottery
scratch cards have become popular.
Credit Purchasing Almost anything for sale over £100 is offered
on credit. It sounds good, paying a lump sum over time, but you will
end up paying a lot more for your purchase in interest. It is better
to save up and pay in cash. Also, you may think you can afford the
credit repayments now, but circumstances change and an event could
mean you are suddenly unable to keep up the payments.
What Can I Do About It? Firstly try not to be tempted with discounts
offered, and ask yourself the following questions: 1. Do I really
want this item or this loan? 2. Can I save up the money, or use savings,
and pay just the cash price? 3. Can I afford it? Will I have enough
cash at the end of the month to cover repayments and leave something
for extras and emergencies? 4. Will I be able to keep up the payments
for months or years? How will I find the extra cash if the interest
rate goes up?
It is quite easy to get into debt whether from student loans, excessive
use of credit cards, gambling, etc. Many organisations advertise consolidation
loans or other types of finance to cover your debt. It is always best
to speak to someone independent as they will be able to look at what
you owe and help you decide how best to pay off your debts.
Debt is increasingly recognised as problem for young people. Many
Citizens Advice Bureaux and benefits advice centres employ debt counsellors
and money advisors. If you are having problems with money and would
like to talk to someone there is a National Debtline on 0808 808 4000,
as well as a range of local services. Another one is 'Youth Access' on
0208 772 9900 Mon.-Fri.9-5.
Further Reading
The Office of Fair Trading (0870 6060321 or www.tradingstandards.gov.uk)
produces the following leaflets: Moneyfax - The Guide to Credit
and Debt (published in association with BBC Radio 1).
Creditwise - your guide to trouble free credit.
Debt - what to do when bills pile up.
Using a pawnbroker - just another way of borrowing
money - No.11 in the Know your rights series.
Advice for Students with Debt Problems
Tuition is paid for with a little spending
money left over, and you don't have to start repaying those loans
until after you graduate. The ultimate freedom right?
Wrong, now you are responsible for making sure all your bills get
paid on time, there is food in the refrigerator, getting transportation,
buying books, and of course, having a little left over for entertainment.
With all these new costs and responsibilities it's not hard to see
how a college student can find himself or herself in debt very quickly.
40% of students are employed during term time, which is having an
adverse affect on their studies. 40% of these work for between 12.5
and 20 hours a week, 30% miss lectures to work and 20% miss course
deadlines and fail to submit academic work.
The average student debt is £11,000, which is increasing now due
to the abolition of grants and the introduction of tuition fees.
There are various sources of funding, as follows:
Local Education Authority
You may be able to get means tested help from
your LEA.
Disabled Students Allowances (DSA)
This is to help with the costs incurred from
undertaking a course, and this does not have to be paid back.
Child Care Grants
The amount you get depends upon yours and
your family's income;
Care Leavers Grant
This is to help with the cost of accommodation,
up to £100 per week, during the summer break.
Lone Parents Grant
This is means tested.
Parents Learning Allowance
This is for help with course related costs
if you have dependant children, and is means tested.
Student Loans
These are for help with living costs, and
the amount you get is dependant upon your's and your family's income.
You need to apply to your LEA for each year of the course.
Access to Learning Fund
You must be in receipt of a student loan to
qualify, and this is paid by your university/college. You do not have
to repay this money.
Career Development Loans
This is to be applied for if no other source
of help is applicable. It is run in partnership between the Department
for Education and Skills (DFES) and 3 high street banks - Barclays,
the Co-Op and the Royal Bank of Scotland.
Trusts and Charities
Usually these relate to particular subjects
being studied or having links with a particular area.
NHS Bursaries
This is to pay fees for a NHS funded degree
or diploma, and does not have to be paid back.
Benefits
Those students who are disabled or single
parents may qualify for some benefits, but the majority of students
do not.
Council Tax
If you live in halls of residence or a shared
house with other students, you will be exempt.
Sources of more information include :-
The National Union of Students has published 'Student hardship -
the facts'.
DFES 0870 000 2288
www.dfes.gov.uk
Student Loans Company (SLC)
www.slc.co.uk
National Union of Students (NUS)
www.nusonline.co.uk
NHS Students
www.nhscareers.nhs.uk
Trainee Teachers
www.canteach.gov.uk
The National Bureau for Students with Disabilities (SKILL)
www.skill.org.uk
Council for International Education
www.ukcosa.org.uk
Education Grants Advisory Service (EGAS)
0207 254 6251
501-505 Kingsland Road, Dalston
London, E8 4AU
Career Development Loans 0800 585 505
Funderfinder www.funderfinder.org.uk
Support for Learning
www.support4learning4.co.uk
Scholarship Search
www.scholarship-search.org.uk
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