Avoiding debt
Jenny Blythe outlines the do's and don'ts of student finance
No one could remember the last time that it had happened. At the National Union of Students conference in July a guest speaker received a standing ovation. He was Andrew Cubie, the man behind the report into Scottish student finance. His original recommendations have been watered down, but Scottish students are now in a more "favourable position," as they no longer have to pay tuition fees and bursaries of £2000 are available.1 Applications to Scottish universities have increased this year by 2.1%.2 In the rest of the United Kingdom numbers of applications have gone down - the biggest drops are among mature and overseas students. Major reasons have been the increasing financial strain on students and fear of overwhelming debt.2 In his speech at the conference Cubie
made clear his feelings on the subject: "It is unacceptable
that people with potential are held back due to financial reasons," he said. "This is an issue of fairness."1
Debts could rise to £12 000
In last year's BMA report into student finance, the average debt among respondents was £8000.3 However, the National Union of Students has predicted that this will increase to nearer £12 000 in the next few years because of the abolition of grants.
Why do students get into debt? Alison Aherne, student welfare officer at
Guy's, King's and St. Thomas' Medical School, said it came down to a "lack of realistic funding." She said that "sometimes, debt is
unavoidable. After paying for all the fundamental things, such as accommodation, travel expenses, books, and equipment, there is
very little left to live on. Even clothes are a
necessity to a certain degree for medical students as they need to look smart for the ward rounds and clinics."
As a consequence of debt, course work can suffer because of the stress of financial burden or from working too many hours in a part time job. Banks and credit card facilities offer incentives to open accounts, more and more money can be borrowed, and the cycle of debt continues.
Nick Jenkins, chairman of the BMA's medical students committee, is also concerned that this rising level of debt will lead to medicine becoming a "domain of the privileged."
How to avoid debt
- It may sound boring, but do sit down and
make a realistic budget plan, preferably
before you start the academic year. Think
about your income (grants, parental
contribution, etc) and your expenditure
(lodgings, travel expenses, books) and for
how long you are budgeting (the nine
month academic year, the 12 month
period, or until
the next weekend when you are
going home to raid the fridge).
- If you realise at this stage that there may
be some problems, do contact either your
bank or the financial services at your
university. They will be impressed that you
have been sensible enough to look ahead
and will be able to give you information
about overdrafts and hardship funds.
- Do be aware of all benefits that you
have a right to as a student. The Young
Persons Railcard gives you travel
discount. HC1 forms, available from
chemists and university welfare offices,
entitle you to free NHS prescriptions.
There are also student discounts
available in high street shops.
- Do split your spending into essential
and non-essential. It is essential that
you have a roof over your head,
enough food to eat, and the correct
equipment to do your work properly. It
is not essential that you have the
hippiest interior design, the best cuts
of quality steak, and the most
expensive stethoscope.
- Do consider limited part time work, but
don't do it unless you are absolutely sure
that it won't jeopardise your course.
Student unions are often a good place
to work as they are more "student
friendly" in their attitude to your need
for time off work during exam time.
What to do if you are in debt already
- Don't ignore the situation. Outstanding credit card bills won't go away and the interest will build up.
- Do seek financial advice from your university welfare office. They have dealt with similar situations hundreds of times and have access to the information and support that can help you.
- Do look at alternative sources of funding - for example, hardship funds, top-up loans.
- Do separate your debt into priority and nonpriority debt. A student loan, while you are still a student, is not a priority debt next to, for example, an outstanding council tax bill, which can lead to imprisonment.
Don't take the attitude that, as a medical student, it is okay to have large amounts of debt as an almost guaranteed highly paid job at the end of five years means you can pay it off quickly. "A debt is a debt NOW," says Alison Aherne, "and taking control of your financial situation is an important life skill to have."
Jenny Blythe, second year medical student, University of Dundee
Email: blythe_jenny@hotmail.com
studentBMJ 2000;08:303-346 September ISSN 0966-6494
- Utley A. Surprise standing ovation for Cubie. Times Higher Education Supplement 21 July 2000:4.
- Goddard A. Students swap the campus for home. Times Higher Education Supplement 21 July 2000:4.
- BMA Health Policy and Economic Research Unit. Survey of medical students' finances 1998/99. London: BMA, 1999.
