ClearDebt’s newest member of the marketing team, a recent graduate, fears that people like her are entering working life with the mantra “Borrowing is good. Debt is good. It’s the norm”.

With the riots of the past week echoing the student riots last year and with the release of A- level results this week, it feels as if the student debt topic is as fresh as ever.

Year upon year thousands of graduates take to the graduation stage in every university nationwide. Neat and alphabetically ordered with the stereotypical worries of not tripping and making sure a mantelpiece-worthy photo is taken.

However I wonder if many graduates list as their prime concern, that their degree certificate equates to nearly £27,000- and that is the old fee costs.

The new fees will see graduates leaving university with a total debt of £56,000 instead of the £27,000 for 2011 starters.

But what does this debt really mean and can it really be that big of a worry when the majority of university leavers have it?

A debt which can easily be ignored

I personally feel, like the majority of my friends, that a student debt is a debt that doesn’t really belong to me. Having worked at ClearDebt for a couple of months now and hearing about debts in the tens of thousands I‘m ashamed to say that, at first, I found it difficult to share the clients’ obvious distress and worry; because, in reality I could easily match some client’s debt pound to 27,000 pound.

I feel that aside from a relatively unassuming letter from the Student Loans Company every once in a while, my student debt has no real bearing on my day-to-day. When I were to say to older generations, who are typically more averse to borrowing, that I have £27,000 of debt before I even start work they are horrified. Yet the Student Loans Company is set up in such a way that it just silently chips away 9% of my earnings and only when I earn over a certain amount, with various different stipulations all designed so that I barely notice it.

A student debt in this respect is like a niggle, not a worry, not a panic but a niggle- I know it’s there but find it pretty easy to ignore- not much of a burden really.

Student debt creates  a worrying precedent for the future

However I do feel that the debt level university leavers are coming out with is setting a worrying precedent for the future.

Along with my student loan I also have a meaty overdraft that ticked my union bar bills over nicely during my time at university. With all the no added charge, no hassle borrowing and extending it right up until it was positively fit to burst, I was lulled into a false sense of security.

My student loan had detached me from any real ownership of my debts and when I saw a negative number every time I checked my bank account I barely registered that I would eventually have to be held accountable for it.

Having been out of university for a year now, the faithful, always- there -when- I- need- clothes/ alcohol/ night out – overdraft is quickly not being so faithful. Where has all this added interest come from?

Student loans allow you to borrow vast sums of money in an easy, flexible, largely low-key way. This is not how other debts work and borrowing and borrowing and again borrowing will in later life lead to a concerning outcome.

Thankfully I never succumbed to the offer of my very own student credit card whereas a couple of my friends did. My mounting overdraft interest is looking a whole lot more appealing in comparison to that expensive nightmare.

Lack of money management skills

Ultimately, student debt for me  has been pretty simple. I went to university, graduated and pay back a measly amount every year and that’s about it. I could very easily live by the mantra of “Borrowing is good. Debt is good. It’s the norm.”

The problem is with this is the lack of money management or understanding of budgeting. Coppering up at the supermarket once you have run through your freshly extended overdraft is not a successful budget. I believe that the tell of how badly student debt affects the ‘youth of today’ will not be seen in the vast student loan sums they owe but rather in their attitudes to money and debt. Not to forget the credit cards and overdrafts. I am guilty of this and only a year later have I begun to think ‘errm … I didn’t really think that through, did I?’

I am still struggling to make a dent in my overdraft as it grows bigger and bigger with interest; it is still difficult to strike the balance between spending and saving. One thing that has helped me is speaking to the clients here at ClearDebt and Abacus and seeing how they are sticking to strict budgets in order to make monthly payments- out with the old student ways, in with the new.

If you would like to share your story on the ClearDebt blog, please get in touch by emailing marketing@cleardebt.co.uk or leave a comment below.

For any further information regarding student debt, student finance or university fees, visit the Directgov website.

•    Average level of unsecured debt for young people aged 21 and under is almost £9,000
•    Debt level of 18 – 21 year olds in the UK 91% of their take home salary
•    37% of those with debt problems in the UK are 30 years old and under

Leading debt solution company, ClearDebt, releases figures showing the average 18 – 21 year old owes £8,195 in unsecured debts against their £8,987 take home salary.  Despite earning less than any other age group, the younger generation of the nation are continuing to spend their way into debt whilst trying to maintain a lifestyle  beyond their means.

The research is released as MoneySavingExpert and Mumsnet close their petition to government to re-instate plans to make financial education part of the curriculum.

Jacqueline Cohen, Marketing Manager of ClearDebt explains, “The data collated backs up the essential need to prepare children for financial independence – as they enter adulthood, they’re put into a situation where they’ll sink or swim – without the necessary education and understanding about how to manage finances, they’ll undoubtedly…sink.”

Showing support for the campaign by MoneySavingExpert and Mumsnet, ClearDebt wholeheartedly back up the argument for financial money management to be taught in schools.  Jacqueline Cohen continues,

As Santander release figures confirming 773,000 10-15 year olds in the UK work part or full time, there has never been a more important time to teach children how important it is to manage their money effectively.  The fact that at just 18, they have already worked up £15,000 of debt is heartbreaking – surely we can do better for them than that?”

The research by ClearDebt also shows that the highest average debt is currently attributed to those age 64, who owe £43,581; the highest ratio of debt/income (take home pay) peaks at age 66 when for every £1 they earn, people owe an average of £3.14 in credit card balances and unsecured loans.

The data analysed by ClearDebt indicates that no matter how old people are getting, they are still getting further and further into debt, making retirement feel difficult and dark.  Supporting the need to teach the young before they get onto the debt ladder, these statistics could not be more relevant to the Financial Education Petition.

The subject of student debt keeps coming up. 

Yet the reasons of the debt are certainly no longer being attributed to the age old student stereotype of too many parties and out of hours activities.  Instead, the blame is sternly being placed at the door of government.  In particular, those responsible for the distribution – or lack of distribution, of student grants.

We’re already half way through the student year and the National Union of Students (NUS) are confirming around 28,500 school leavers are still waiting to receive their student grants.  Still?!!  Appalling.

It’s bad enough we live in a society where university is quickly becoming a class system – only those with the funds to go there, are the ones privileged to receive such a high class education.  And for those without the funds?  Those with the right level of desire, potential and intellect, but reliant on grants to afford the cost of this education, are having to opt into debt into order to follow this path, whilst they wait, wait and wait some more for the grants promised.  I wonder – are government adding the loan interest to the grant payments for those affected?  I doubt it.

September 2009 saw 16% of student loan applications waiting to be processed.  I can only imagine with a six month delay on the distribution of grants this figure will have substantially increased?  What a way to start their adult life!

Come on now – surely we can do better than this for our children?

In days gone by, university students were widely tarnished with the brush of little study and a lot of sleep.  However, with student debt growing rapidly, the recession has given many students a reality check – and in doing so, has put to bed, no pun intended, the stereotype of this “group” which we all know and love.

As university halls empty out for the festive season, and many a family home welcomes back their studious children – along with their bin bags full of dirty washing, it seems the Christmas holidays will be less than a rest for many.  Whilst the majority of us dig into our Christmas pudding, students around the UK will be working extra hours in our retail stores to earn, rather than spend, during the festive season.

Research earlier this year confirmed students are panicking about the debt they accrue during their years of study – particularly when being told it could take up to 20 years to pay it back!  New research by Studentgems now shows a reaction to this situation as 82% of students questioned have taken jobs during their Christmas break in order to have a little more budget on their balance sheets when the semester begins again in the New Year.

Furthermore 16% of these students will be working on Christmas Eve, Christmas Day and Boxing Day, giving up their own Christmas in return for higher wages.

Sadly, 93% of the students questioned admitted that the jobs they’ve taken for the holiday period will neither be rewarding nor relevant to their future career but will pad their pockets and ease the burden of worry surrounding student debt and the cost of attending university in the UK.

So the question is, is this a good lesson for students in the UK to learn? Or are we hindering them with debt and worries they shouldn’t have to be concerned with, when real life is still a few years off?

Studying at uni and working in a bar on nights and weekends, is often how many students, in my day, made ends meet.  In fact, the whole experience of uni was so special because we were all living on a shoe string – materialistic accessories weren’t important – infact, if you did have your own car…you certainly stood out from the crowd.

So, I find it quite concerning that some experts are now saying student debt may not be just a result of the fees they have to pay, but actually, the main cause being, the lifestyle they insist in maintaining – despite the fact they have no income to support themselves.  Middle class students are often not opting for jobs around their study hours and instead relying on weekly allowances and credit cards from their parents.  The ugg boots, blackberry’s and laptops come with them in their brand new cars and all of a sudden, student life doesn’t look so humble after all.

And despite such eloquent education available to them at university, it seems there is one lesson, our students are failing to learn.  Professor Kevin Sharpe states that he believes the difference between students of today against those of yesteryear is their lack of budget sense and understanding of living to their means.

The latest student survey confirms students are graduating with debts around £23,000. With such figures hanging over their higher education experience, I have to ask, what is going wrong?  Has the student lifestyle really become a fashion statement or is this genuinely just an effect of “the crunch”?

To help debate this more, let me know of any students you know and the lifestyle they live to see if this latest research is spot on?