University education in the UK is proven to be a great investment with graduates enjoying better career prospects and earning potential than non-graduates. However, as the costs of higher education continue to rise, a survey by Future Finance, the UK’s first specialist student lender and survey company Censuswide, has found that students are increasingly resorting to ever more desperate means to make ends meet.
The survey polled 1,000 undergraduate and postgraduate students across the UK. According to the findings, almost one third of those surveyed (29%) admitted to gambling to supplement their finances with a further 12% disclosing they had taken part in medical research to raise extra money.
In addition, high numbers of students are resorting to expensive forms of short-term finance with nearly 27% of students having loans outstanding to a payday lender and nearly 52% owing money on at least one credit card.
Many of the survey’s respondents are concerned that financial challenges could prevent them from completing their studies: 83% of students recorded that they felt unable to make the most out of their university experience due to financial constraints, with 59% of students revealing that they worry about their finances most, if not all, of the time. Overall, 28% revealed that they harboured serious concerns about being unable to complete their university course because they cannot meet the rising costs of living and tuition fees.
Taking on a part-time job or using the ‘bank of mum and dad’ stood out as two methods of finance on which UK students are increasingly forced to rely.
Of those surveyed, 67% said that they currently have a part-time job with a large proportion (72%) working overtime and 36% working night shifts. A quarter of those with a part time job feel that their education is suffering as a result of needing to spend time working rather than on their studies.
Just over half of students said that they would turn to their parents first for financial support if they were struggling financially. Conversely, only 8% said they felt they could turn to their university for assistance.
Despite the cost of higher education (both in terms of tuition fees and living expenses) it remains a good investment in the UK. According to the first release of Graduate Labour Market Statistics published by the UK Government’s Department for Business Innovation & Skills in December last year, the earnings premium for graduates stands at £9,000 above individuals without a degree. Postgraduates earn an additional premium of £9,000 a year on average. According to the figures, the average graduate salary in the autumn of 2014 was £31,000 and for postgraduates it was £40,000. For non-graduates, it was £22,000.
Brian Norton, Chief Executive of Future Finance, said: “Higher education in the UK is a smart investment: graduates enjoy a lifetime of better employment prospects and higher earning potential. However, the results of this survey make it plain that the growing gap between the costs of education and available financing sources is leading students to make bad choices, or in some cases, could simply exclude them from furthering their education altogether.
“We believe that no student with the desire and ability to pursue a university education should be denied the opportunity to do so because they lack the financial resources. Whilst the UK government has done a good job of supporting this country’s excellent higher education system, a large funding gap remains.
“Future Finance was established to give UK students access to a tailored, affordable and transparent financing option to help bridge this gap. If government loans aren’t an option or aren’t enough, we believe that our loans [Representative 12.3% APR variable] with student-friendly features such as low payments until after graduation and payment holidays to help with rough patches, are a compelling alternative option for those considering more expensive sources of finance such as some bank loans, credit cards and payday lenders.”