Average Student Debt Over £10k
A questionnaire put to 2,000 students who graduated this summer showed an increase in student debt compared with figures produced almost 10 years ago in 1999. It is now estimated that the average student will graduate owing no less than £10,000; a worrying thought for any young graduate.
Since the annual tuition fee of £1,075 was introduced in 1998, the overall feeling towards student contribution of further education remains pretty much a negative one. However statistics continue to show that some 90% of students still regard university as a good investment.
It is thought that the average starting salary for graduates now stands at around £13,500 rising to £20-25,000 for those starting work in the London area or East Anglia.
Although job satisfaction has always been a particularly important factor for graduates when searching and applying for their first full-time job, it is now thought to be much less so. More pressing issues such as debt management and financial security have overtaken in the priority lane.
According to a survey produced by NatWest money matters, today's graduate is no longer a stranger to a £200 monthly repayment sum. Survey results show that £200 a month appears to have become the norm.
Despite survey results showing up to 45% of graduates in favour of the current student loan procedure, some 44% of students said they would prefer a new system involving maintenance grants and higher levels of graduate tax. The general opinion on changes the Government should make in order to improve the current system of student funding remains divided and very much undecided.
A spokesman for the Department for Education issued a statement saying: "Graduates can expect to earn an average of £400,000 more over their lifetime than the national average, so this debt (average of £10k) should be seen as a worthwhile investment for the future."
Although many students obtain part-time jobs to help finance their way through university, they are not expected to repay their loan debts until they can afford to do so. All repayments can be deferred until the graduate is in full-time employment and in a financial position to start taking hold of his/her student debts.
Graduates are advised to come up with some form of budget plan upon graduating and before they actually start earning i.e. check they are paying the correct amount of tax and making sure that debts are repaid by paying off those with higher interest rates first.
Published on October 24, 2007
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