Debt Advisory Centre Scotland

December 21, 2011 10:50 ET

Take Steps to Avoid Unnecessary Student Debt

LONDON, UNITED KINGDOM--(Marketwire - Dec. 21, 2011) - Debt Advisory Centre Scotland has advised students to take steps to avoid unnecessary debt while at university, in order to reduce the risk of future debt problems.

The comments follow news that students who want to move on to postgraduate study are facing higher levels of debt, after the Scottish government announced it's axing a range of non-repayable grants.

As things currently stand, students who undertake postgraduate courses in vocational studies, such as educational psychology, are eligible for allowances that don't have to be repaid. However, under a new scheme announced yesterday, this system is being replaced by one offering repayable loans instead.

A total of 5,000 postgraduate students could get a loan of up to £3,400 to help cover the cost of tuition fees - but there are concerns that borrowing more money could push many students into unmanageable levels of debt.

An expert at Debt Advisory Centre Scotland commented:

"Debt is a fact of life for many students. Most students need to take out a student loan when at university to cover costs, which comes with a low interest rate and doesn't have to be repaid until the borrower is earning a certain amount. However, if students borrow money on other types of credit, such as credit cards, they will normally be expected to make regular repayments - which could be difficult to afford on a student budget.

"However, some careful financial planning and a good budget could really improve students' financial security, help them avoid the temptation to borrow and reduce the risk of debt problems further down the line.

"There are some easy enough steps students can take to keep their student debt at a manageable level. Firstly, it's a good idea to try and keep your overall borrowing to a minimum. For example, if you've already got a student loan and an overdraft, avoid taking out additional credit. Credit cards can come with high interest rates which can see the overall amount you owe build up quickly, whereas student loans are designed to be more affordable - and you won't have to pay it back until you're earning a certain amount.

"The more money you have in your budget, the less likely it is you'll find yourself short of cash. Consider taking a part-time or weekend job while you're at university to give your student budget a boost. You could also think about using whatever talents you have to earn a bit of extra cash - such as teaching a foreign language or musical instrument, or using whatever other skills you have.

"If, once you've graduated, you find yourself struggling to pay back debts incurred during your time as a student, you shouldn't hesitate to get expert advice. A debt solution such as the Debt Arrangement Scheme could help people to make their debt repayments more affordable - but you should always speak to a debt adviser first to discuss your options."

Notes to Editors

The Debt Advisory Centre Scotland provides debt help and advice to Scottish residents. It's part of the Think Money Group, which is one of the UK's leading financial solutions providers and delivers a comprehensive range of financial services, including debt, insurance and banking solutions.

For more information, visit the Debt Advisory Centre Scotland website at

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