Higher Education And Personal Debt

For those approaching school leaving age, Higher Education is seen to promise wealth throughout your career

. It's true, indeed, that Graduates are generally on higher salaries than those without a degree. But in order to obtain the degree to offer the highly paid career such students seek, there's often a major obstacle: Money.

For those who are due to start University in September/October 2010 in the UK, the expectation is that by the time they graduate they will have 20,000 of debt. This is not just down to the necessary costs of tuition fees and the student loan. It is the credit cards and the overdrafts that are taken out to fund the lifestyle. But what exactly does this lifestyle entail?

After they have paid their tuition fees, what is next? Well it is the costs of things that are totally necessary like rent on their accommodation, the bills such as gas and electricity and obviously there is food to consider also. When you have no job, so therefore no regular income, it can be very difficult to pay for these things without some extra help. Add onto this the important costs associated with a university course such as books and materials and it can get very expensive. This is all before fun recreational activities, so you can see exactly why students turn to credit cards and overdrafts to help them through.

Most banks in the UK offer student accounts that provide interest free overdrafts as well as credit card options for students that provide low limits with lower than normal interest rates but these credit cards can still become expensive when compared to interest free overdrafts.

It is very unlikely that anybody who goes through higher education will escape without falling into debt in some form or other. This should however not deter people from going to University in the first place. It is true that graduates do earn more than non-graduates, and as long as they are sensible with their debts and manage them well, they should not lead to any long term issues with their finances.

by: Deb Teller

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