Social Networks and Certain Truths about Student Debt

October 1, 2007 By

There’s an awful lot to be said about student debt, especially by the students themselves. Since the introduction of top up fees for students enrolling courses in 2006 there’s no real doubt that the cost of University has gone up. However, in actual fact, while the cost of University has increased by some £6,000, none of the new fees are payable up front, meaning that the actual period of time spent at University will be paradoxically cheaper than before. From 2006 the fees have been paid by the government to the University, and then the bill is presented to the student after their studies and they are earning over £15,000 per year, even then they will be paying the loan off over a very long time period. Students can also apply for other loans that are specifically for living expenses, which are given to them at the start of every term.

The student finance structure is not easy to understand if you’ve never been involved with it before. Most unfortunately, however, a lot of people do not go to the correct sources when trying to work out how much they will get, and how much they owe. Social networking websites, especially Facebook, are often particularly bad sources to try and gain information, yet a lot of students seem to take it as gospel. To use an example, making a search for student debt on Facebook currently returns 112 groups on the subject it’s a hotly debated topic, but it’s unfortunate that many of these groups are propagandist.

One particularly prevalent group on Facebook is entitled, Grants to reimburse students / graduates who began uni between 96 and 06. The reasoning behind the group is stated as follows:

This Group concerns the issue of the introduction of new Maintenance Grants to students wishing to attend University.

These Grants were not made available to those who studied between 1998 to 2006. The introduction of top-up fees increased tuition fees approximately three-fold for UK Residents. This Group proposes to compensate those who did not receive the Grant.

However, what this group doesn’t note is that tuition fees were actually 66% less for those that went to University between 1998 and 2006, and students from households that earn over £60,005 per year cannot actually apply for a grant at all anyhow. Incredibly the group has over 68,000 members at the time of writing (04/03/08) - how many of them come from households earning over £60,000 a year?

Furthermore there are petitions on the 10 Downing Street website that demand to write off student debt altogether. One claims that graduates shouldn’t pay tuition fees because ‘they do (sic) enough for the country by adding to the GE per capita, the tax and NI contributions that the government obtain from our working contribution to society…let alone the tax we pay on everything we buy, and everything we save!’ This has 9,533 signatures. Unfortunately, it seems that the person who set up the petition doesn’t really understand tax at all, because if student debt were written off then where would the government get the money from to finance this move? It would have to taxed. And who better to tax than the people who actually went to University? It’s a complete catch 22!

Useful official financial advice for full time students is at the official government website.The site clearly states how much money you will be able to get during your studies at University. If you’re a student or graduate then unfortunately you will probably be wasting your time waiting for the government to reimburse you, even if social networking groups suggest that their campaign will work if enough people are behind it.

If you’re a student wanting to raise extra finance, then take a look a look at Alliance and Leicester. They offer some of the most competitive financial products on the market, especially when you sign up for one of their current accounts. A particular benefit of this, particularly for graduates paying interest on their overdraft, is that they offer a 0% overdraft facility of up to £2500 for 12 months. Having the account also gives you the opportunity for discounts on the bank’s loans products, which are already set at a very competitive rate.

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