Lifestyle

1 in 10 students blow their student loans in the first fortnight of term

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Across the UK, new students are settling into the university routine or just about to embark on the adventure. This also means that tens of thousands of teenagers are being handed large(ish) sums of money in the form of their student loans, and for some, this is the most money they’ve ever had in their bank accounts.

So is it really any wonder that one in ten students spend over £2,700 within the first fortnight of term?

According to new research from the Institute of Inertia – a partnership between University of Sheffield and comparethemarket.com – over half (51%) of students are set to spend all of their student loan before the end of the first term and a quarter will fall into their overdraft.

The study of students and parents already at university found that despite the poor looking bank balance by the end of the year, 89% of students felt self-assured when it came to their financial management skills.

But a large majority said that the lump sum of student finance once a term wasn’t an ideal format, and four out of five would rather receive their loans in smaller instalments throughout the year.

Counter to this belief of good financial management, two thirds of students surveyed rely on the bank of mum and dad to make ends meet so they can afford the basics such as accommodation fees, bills and food.

Jody Baker, Head of Money at comparethemarket.com, said: ” For many new students, their first student loan deposit is likely to be the most money they have received at one time.

“What’s more worrying is that parents think that their children would benefit from financial advice yet many aren’t leading conversations in this area – a small move that could make a huge difference to how money is managed during term time.”

Maybe handling our finances is something we need to be taught in school so we know how to save and spend wisely? Let us know!

Words by Stacey Turnbull

Sarah and Liam are your lifestyle editors.

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