Many students find that living on student funding alone is very difficult and it is widely accepted that some level of student debt is inevitable. However you need to ensure that any debt you do have is not only manageable, but it doesn’t affect your credit record.
This section gives an overview of the different types of debts you may incur and information and advice on how to deal with it.
However if you are experiencing financial difficulties don’t ignore them. Come and speak to the Student Money Advice Team for further advice and information.
Information available on this page:
Student loans
The first thing to remember is that if you have taken a student loan, they are designed to leave you with a manageable debt that will not become payable until after you have left University and then only when you are earning above a certain amount of money. For that reason they are classed as separate to the other debts you may incur during your studies.
Other debts
Other debts that you may incur during your studies can be for rent, electricity, gas, food – and that’s without the social aspects of being a student. It’s your responsibility to make sure that your debt is kept to a manageable level and that your creditors (the people who you owe money to) are fully aware of your situation.
Debts can be split into two main categories of priority and non-priority debt. It’s important to distinguish between the two types as the actions that can result for non-payment are vastly different.
Priority debts
Priority debts are debts where a creditor can take action against you that will have a serious consequence such as eviction, cutting of services or imprisonment. Examples of priority debts and the ramifications of non-payment are:
- Rent / Mortgage arrears – Can lead to you being evicted or having your house re-possessed
- Service arrears (e.g. gas & electricity) – Your supply to these services may be disconnected if you fall into arrears
- Council Tax arrears – Most students are exempt from this, however you need to make sure you have followed the guidance given in our Council Tax section. Failure to pay when you are not exempt can result in you being taken to court and fined. Ultimately, in extreme cases, you can be imprisoned.
- Unpaid Court Fines – Failure to pay court fines can result in imprisonment
Non-priority debts
Non-priority debts are debts where a creditor can only take limited action to recover the debt. These debts still need to be repaid as failure to pay will often result in the company pursuing you for payment in the County Court. This can ultimately results in you being served with a County Court Judgement (CCJ) that will stay on your credit file for six years.
Examples of non-priority debts include:
- Bank overdrafts
- Credit card repayments
- Unsecured personal loans
- Catalogues
- Gambling – Gambling is an activity that is easy to become absorbed in. There’s the temptation to attempt that first win over and over again or to re-invest your winnings on another gamble. You may become addicted to the art of gambling, which may lead to a breakdown in relationships with both friends and family. It may jeopardise your education and have serious financial implications. For more information please view our information on Gambling.
If you are experiencing difficulties in repaying non-priority debts, the first thing to do is to contact the company concerned and advise them that you are experiencing financial difficulties. The company will try to come to some arrangement suitable to both of you in order to repay the debt. However, if you are unable to come to an agreement and need further advice or information please contact the Student Money Advice Team.
Useful contacts
In addition to the Student Money Advice Team the following contacts are also of use if you are experiencing debt problems.
The Money Advice Service
The Money Advice Service are a not for profit government organisation created solely to help people with their finances. Their easy to use website includes a Web Chat function so you can chat with advisors instantly.
Web: www.moneyadviceservice.org.uk
Telephone: 0300 500 5000 (Lines are open Monday to Friday, 8am to 8pm. Saturday, 9am to 1pm)
Citizens Advice Bureaux
The Citizens Advice Bureaux is available all over the UK. They provide free advice and guidance all financial situations. To find your local Citizens Advice Bureaux please use their office locator on their website.
Webchat: https://www.citizensadvice.org.uk/wales/about-us/contact-us/web-chat-service/
Freephone: 03444 77 20 20
Web: https://www.citizensadvice.org.uk/
National Debt Line
Freephone: 0808 808 4000 (Line are open Monday to Friday 9am to 9pm and Saturday 9.30am to 1pm)
Web: www.nationaldebtline.org
Step Change Debt Charity
Freephone: 0800 138 1111 (Lines are open Monday to Friday 8am to 8pm)
Web: www.stepchange.org
Credit Union
The Credit Union offer a range of financial services, to find your local Credit Union please view their google branch locator