Student Debt Prevents Graduates from Saving
Student debt is expected to take the average graduate 11 years to clear, and as a result, is forcing many to put their lives on hold, research shows.
The research by uSwitch reveals big life decisions such as getting married or starting a family are being put off due to the burden of student debt, as six in ten graduates admit they are unable to save for the future.
The average debt a graduate now faces stands at £21,198, and the research shows over two thirds of graduates underestimated the amount of debt they would accumulate.
“The fact that graduates have to put their life on hold because they are knee deep in student debt is a sorry state of affairs,” said Michael Ossei, uSwitch personal finance expert.
“Without a degree getting a job in today’s stagnant market may be even harder. Going to university used to be the norm, but it is now becoming a catch 22.”
For some who have graduated, their financial situation is so bad as a result of their student debt, 21 percent said they would now potentially consider bankruptcy.
Others are uneducated about the debt that they hold, with 40 percent admitting they do not know the rate of interest charged on their student loan, and 14 percent say they have no idea what they are being charged on their overdraft.
Worryingly, a quarter of graduates are unable to find even an entry level position to start their careers, which would make their degree worthwhile.
The current state of the job market sees the average graduate in their overdraft by about £1,200 as their current situation means they are unable to clear this student hangover debt.
Even those that graduated between three and five years ago are still struggling to clear their overdraft of over £1,300.
If you are struggling to save money due to your student debt, then a prepaid credit card could be the solution. These are available to anyone, whether you have good or bad credit as they do not have an overdraft facility so the user can only spend the amount they loaded onto the card – of which they may have laid down a budget for.