Future Finance CEO Brian Norton discusses the implications of their bi-annual research report
Our latest bi-annual survey of 1,000 UK students has shown that a significant number are still resorting to risky and expensive ways of supplementing their finances.
A quarter of students questioned said they have outstanding debts to a payday lender. Of that quarter, a astaggering 92.4% admitted to incurring late charges with 54.5% revealing that they always incur late payment penalties.
Lack of funding remains a serious problem for UK students enrolled in, or considering enrolling in, higher education. The National Union of Students estimates that UK university students need on average an additional £8,000 above what is provided by the government-subsidised loan scheme to cover the costs of tuition and living expenses.
This research has highlighted that UK students continue to resort to risky measures to try and meet the funding shortfall. To supplement their finances, around 24% of students in the survey admitted resorting to gambling and 13% reported participating in paid clinical trials.
There are, of course, less dangerous options available to students. 64% said they relied on part-time jobs to meet the costs of higher education, but one-sixth of these feel that their education suffers as a result of the additional workload. Just over half of students surveyed said they relied on the ‘bank of mum and dad’ but for many students this may not be an option.
“UK students continue to resort to risky measures to try to meet the funding shortfall” BRIAN NORTON
There is little doubt that higher education remains a good investment, both for an individual’s future and for companies and the general economy. According to the latest release of Graduate Labour Market Statistics by the Department for Business Innovation & Skills (March 2015) median salaries in the UK were £22,000, £31,000 and £39,000 for non-graduates, undergraduates and post-graduates respectively.
Equally, it’s estimated that a 1% increase in the share of the workforce with a university degree raises the level of long-term productivity for the UK by 0.2% to 0.5%. Nevertheless, the pressure on students to find alternative sources of funding could increase in the next few years as government changes to the existing scheme which will see all maintenance grants for UK students scrapped from the academic year 2016–17. Higher education in the UK is a smart investment. However, the latest results of this survey make it plain that the growing gap between the costs of education and available financing sources is still leading students to make bad choices, or in some cases, could simply exclude them from furthering their education altogether.
Future Finance is the UK’s specialist student lender. We have received over 22,000 applications from students at every university in the country to date and have lent a total of £13m.