We all need to learn a lesson from tales of student debt

To many young people, debt seems like a far away concept that may come later on in life - yet the concept of owing money may be a reality closer than we think.

The Money Advice Trust (MAT) has released results of a survey regarding young people’s debt and worries that concern it. The average debt held by people falling into the age bracket of 18-24 has reached a whopping £2,595, according to the survey.

This debt excludes student loans and mortgages, which makes the results even more astonishing than they initially seem.

32% of 18-24 year olds say that their debt is considered a ‘heavy burden’, which is understandable. It doesn’t take any sort of financial expert to understand that money is the centre of almost everything. Without it, you’re not going to get too far, as unfortunate as it may be.

Yet, this may not be down to stupidity, or even the carelessness of the young (something we seem to be constantly reminded of). In fact, it could be a necessity.

But isn’t it high time young people devised a plan?

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Although 37% do not have a plan of how they hope to repay their outstanding debt, 69% of young people have set a budget and 71% log onto their internet banking weekly (something I’m sure we can all agree can be daunting).

As 42% of young people say they have found managing their finances harder than they initially thought, it may mean a lack of teaching of the subject at an early age. I mean, it seems as though we all know the Pythagorean theorem but still have no idea on what the going interest rate is, or the pros and cons of an overdraft.

Obviously, it may well be in the best interest of the lender to research before borrowing but when you reach the golden age of 18, the idea of being able to buy the world and put it on plastic until the end of the month, seems a little bit too tempting.

Another problem is not just the lending itself, but maybe even more so the fact that there isn’t a solution being sought. It was recorded that only 2% of young people have looked for help from a money or debt advice charity. However, National Debtline were contacted by Emma (whose name has been changed) who had got herself into some difficulty after being lured into signing for a credit card at 18, after being convinced by the promise of a good credit history. Emma became reliant on the card and began to spend more than she was able to afford. After having to further lend a loan of £3,000 she sought help and is now back on track.

Personally, I can see why many young people are falling into debt. As I am a student of a university, it sadly means that I am already in thousands of pounds worth of debt, but aside from this the offer of an overdraft was too good not to take - especially with overdrafts for young people (not only students) being advertised to openly.

Although I have only dipped into my overdraft (and have managed to pay it off) there are people in a predicament much more damaging than my own, people like Emma who seems to be a spokesperson for many other young people who have found themselves in financial bother at a young age.

Yet, by the same token it seems as though we can make an example of Emma’s story as it shows how help can be given and can vastly improve a situation that otherwise may have looked dire.

We all need to learn a lesson from tales of student debt

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