Can you put an accurate figure on your student loan?
Following the Labour party’s hint that tuition fees could be scrapped if they win the election this June, we were inspired to revisit a recent piece of research exploring how students and graduates feel about their university debt.
With more than £10 billion loaned to students each year coupled with the projected rise to £9,250 from 2017, you might imagine that graduates would be concerned with the debt that they are running up. However, our research uncovered some surprising results.
Despite 2016 graduates leaving university with an average debt of £44,000, only 10% of both students and graduates that we surveyed knew the total of their student debt, and only 26% actually considered themselves to be in debt.
In 2016, Arkenford developed a segmentation of prospective university students. This provided a comprehensive understanding of the variety of reasons that motivate students to go to university, including an understanding of their worries and the reasons why they might decide against going to university altogether. Of course, finance was frequently mentioned as a concern. Some deliberated, given the increase in tuition fees in 2012, if university is worth it anymore. Others wondered if they should consider other more cost effective options which will get them onto their chosen career path.
For the majority of students, irrespective of whether they fell into the £3,000 or £9,000 tuition fee group, finance is something they have to think about on some level. Whether this is as simple as deciding whether they can really afford another night out, or as tough as figuring out how to manage a job on top of university work to pay for food, rent and bills. Perhaps they’ll even have to consider whether they can afford to go to university at all.
48% of those that we surveyed said that financial factors were something they had to consider when making the decision whether to go to university. But before starting university, only 22% felt worried about the debt they would be in afterwards. Unsurprisingly, the £9,000 a year cohort were more likely to say that financial factors were a consideration when making university plans. This group were also twice as likely to say they were worried about the debt they would face afterwards. But these figures were still relatively low, with only 30% of this fee group feeling worried about debt.
Post university, the picture doesn’t look too different. On average, only 26% of graduates that we surveyed felt concerned by their student debt. This might initially seem surprising. Especially given that the majority don’t actually expect that they will ever be able to repay their loans. Of those we surveyed, a third felt they would probably not fully repay their loan, and a further third expected that they would definitely not.
On the surface, having a huge loan to repay might seem like a daunting prospect. However, a huge 74% of those we surveyed felt that their debt has little to no impact on their day-to-day life, and just under half did not think it would have any impact on their future. Could this be why graduates are so easily letting their student debt slip from their mind?