How To Deal With Debt As A Student

Jane Wardle

Written by Jane Wardle on December 3, 2018

Updated January 14, 2021

Stay out of debt as a student

The stress caused by debts that you can no longer afford to pay, on top of exam pressure, coursework, dissertations and paying your monthly bills can turn student life into a living nightmare. If you’re finding it difficult to make the payments on credit cards or loans on top of paying your rent and shopping for groceries, you might need help with your debts. The sooner you act, the easier it will be to sort out your debts so don’t wait if you are struggling.

It is best to steer clear of profit-making debt management companies. These companies are likely to charge any advice and assistance they offer. It is much better to use free, impartial advice from non-profit organisations.

Resisting The Temptation of Too Much Credit

Dont spend too much as a student

University students are usually on an extremely low income, relying on student bursaries and loans to cover your costs of living. You may find part-time employment to fit around your studies; however, even with a part-time income, money is still tight for most students.

Banks and building societies regularly offer students tempting credit products such as overdrafts and student credit cards, and it’s, therefore, no surprise that many students are keen to accept these offers.

To stay out of debt, you must live within your means. If you are already in debt, there is support available, but it is vital that you do not do anything that will make your situation worse. The key points are:

  • Do not continue to use a credit/store card
  • Do not extend your overdraft
  • Do not take out payday loans.

Student overdrafts and credit cards can seem like a good idea at the time, but quite often they can end up out of control if you overuse them. They must be used with caution.

Things You Can Do To Reduce Your Spending

Living on a low income means you have to carefully plan your spending and how you handle your living expenses as well as your debts. By reducing your spending, you can save more money to pay towards your debts.

Take a close look at your budget to get an idea of how much you have left at the end of each month once you’ve paid all of your bills. This will allow you to see what you are spending your money on. You should also make sure you are shopping around for the best deals. This means using comparison sites for utilities (if you pay your own energy bills) and insurance policies, shopping around for your groceries etc.

You may find a budget supermarket such as Aldi or Lidl works out cheaper for your weekly shopping. Learn how to batch cook staple meals and freeze your leftovers. This is one of the most economical ways to cook your meals and prevents food waste. You could also try meat-free meals regularly to save money. Eggs and beans are excellent sources of protein to keep you fuller for longer and are very cheap. Markets are a great way to source cheap fruit and vegetables too.

Always check to see if student discounts are available as you can save a considerable amount. Try sites like Student Beans for discounts and offers, and Student Cash Point for funding opportunities and free money.

If You Are In Debt

If you do find yourself in debt, then it is important to deal with the problem straight away. Usually, a payday loan will not be an answer and will often add to your debt with their incredibly high-interest rates. Start by making a plan and a budget for how to pay your debt back.

If you owe your landlord or a utility company, get in touch with them to explain the debt and what you can offer and when. Often a company will help you by allowing you to pay in affordable instalments or by freezing interest for a short while. Your university is likely to offer money advice on site, if not, get in touch with a debt charity such as Stepchange if you are unsure what to do.

If you are struggling, your family may be able to lend you the money without interest. However, this can put a strain on family relations, so make sure to have an agreement in place. It helps if you address the fact you have a responsibility to pay them back, rather than avoiding talking about it.

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