Struggling students face increasing debt problems
One in seven university students have been chased by debt collectors, according to financial technology company Intelligent Environments.
In January this year, the company conducted a survey of 300 UK undergraduate university students that receive a maintenance loan.
The company said a worrying 15 percent have been chased by debt collectors, demonstrating the severity of the issue.
It found that almost 60 percent of students run out of money before their next payment is due and over a quarter have missed rent payments.
Intelligent Environments said: “Defying stereotypes of drunken nights and time spent socialising, the top three items students spend their money on were revealed to be rent (78 percent), food (69 percent) and utility bills (47 percent).”
Nearly 40 percent of students surveyed said their debt has prevented them from being able to afford their weekly food shop.
The company said the students surveyed also rely on extra sources of income to get through the term. This involved turning to friends or family for help, using their student overdrafts or savings and even taking out credit cards or payday loans.
Shelly Asquith, vice president of welfare at the National Union of Students (NUS), said NUS research shows almost 60 percent of graduates have existing debts left over from their degree.
Intelligent Environments said that banks can play a role to address the situation by providing students with the digital tools to help them keep on top of their outgoings.
The company added that 48 percent of students said they would be less likely to get into debt with a digital app.
Student loan debts are growing in the UK. The total, outstanding student loan book in the UK hit £73.5bn, for the financial year 2014 to 2015, according to government statistics.