Students face cost-of-living crisis, suggests NUS data

Students in England face a cost-of-living crisis as loans and grants fail to keep pace with rents and bills, claims the National Union of Students.

The gap between income and expenditure for a typical student amounts to more than £7,600 according to NUS analysis.

The union compared the cost of living and studying for the 39-week 2013-14 academic year with typical income from government grants and loans.

The government said it was targeting support at those who needed it most.

Rent, bills and other outgoings continue to rise year after year above the rate of inflation but grants and loan rates were frozen this year and will only rise by 1% next year, says the union.

It estimates that a student living outside London will pay an average of £21,440 in tuition fees, books, equipment, rent, travel and other living expenses.

Against this, they have a potential income of £13,747 composed of their tuition fee loan plus maintenance loans and the grants available to those on average and low incomes.

This leaves a shortfall of £7,693.

University leavers lack the essential skills for work, employers warn

Large numbers of students are leaving university lacking the basic skills needed to get by in the workplace, according to new research.

More than half of employers said all or almost all graduate recruits started work without vital attributes, such as team work, communication, punctuality and the ability to cope under pressure.

A poll of company leaders found that just under one in five businesses believe graduates are “work ready”.

The conclusions will add to concerns that schools, colleges and universities are too focused on ensuring that young people pass exams at the expense of equipping them with life skills.

Experts also warned that it raised questions over the extent to which universities are spending tuition fee income on programmes designed to get students ready for work, particularly with the cost of a degree rising to £9,000 a year in England.

The YouGov research was based on a survey of 635 employers, including 419 directly responsible for recruiting graduates. In all, 52 per cent of graduate employers said none or few graduate recruits were work-ready when they joined, with 17 per cent claiming none of them were fit for the job.

More than half of students get no parental help

The majority of students are applying for controversial new student loans.

More than half of university students receive no financial help from their parents – resulting in most having to take out loans to cover tuition and living expenses.

In a survey by website Topcashback.co.uk almost three quarters of students said they did not expect any help from parents. But a smaller number – 57 per cent – did not actually receive any.

The backdrop is steeply rising university costs and the introduction of a complex and controversial new student loans system, which launched in 2012. From that year annual university fees in England rose from up to £3,000 to up to £9,000.

The site’s research shows two-thirds of students take out student loans to help cover the cost of university and 54pc have a job while studying. Smaller numbers – two in five – use savings to help meet the costs.

A report on new loans system – effective from September 1, 2012 – is complex. All students in England can apply for tuition loans, covering their course fees, and maintenance loans that help with living costs such as accommodation, bills and books. 

Students’ parents ‘need more information’ on finance

Ministers should focus more resources on explaining the student finance system to parents to avoid children being put off university by debt, a thinktank says.

In a report titled Access for All, published on 8 July, the Strategic Society Centre says the government should target an information campaign at parents of potential students, making it a specific policy objective next year.

It follows a study by the thinktank, which is led by former Downing Street policy adviser James Lloyd, on what factors drive young people’s worries about the cost of going to university.

The study is based on a survey of more than 5,000 young people who achieved Key Stage 4 qualifications (like GCSEs) between 2004-07 and expressed a desire to go to university.

It finds parental education, earnings and occupation are all predictors of young people’s financial concerns with the costs of university.

The children of graduates who are working in non-graduate jobs are much more likely to report worries about the costs of higher education, as were the children of parents who had no experience of higher education, the study says.

Mr Lloyd, director of the Strategic Society Centre, said: “It seems that when young people weigh up the costs and benefits of higher education, the experience of their parents is paramount.

Young people lack financial skills

Young people are entering adult life with “dangerous gaps” in their financial knowledge, according to a new survey.

Under 25s are showing worrying gaps in their financial knowledge relating to bank statements, overdrafts and interest on loans, according to a new survey from Barclays and charity pfeg (Personal Finance Education Group) to mark the beginning of My Money Week, which runs June 3 to June 9.

Of those surveyed, 42pc could not interpret the difference between being in credit and overdrawn on a bank account statement, while more than a third did not know the correct meaning of APR in relation to interest charges on loans or credit cards.

Around one in eight (13pc) did not know what an overdraft was, with 8pc thinking it was a low-cost one-off loan from a bank.

Tracey Bleakley, pfeg chief executive, said: “It is clear that many young people are entering adult life with dangerous gaps in their financial knowledge that could lead them into serious financial difficulty.
“These findings underline the need for all schools to teach their pupils about personal finance, to equip them with the skills, knowledge and confidence they need to manage their money well.”

Financial education will likely become compulsory in schools across England for the first time next year, following its inclusion in the new draft curriculum.

Personal finance is already taught in schools in Wales, Scotland and Northern Ireland.

The Money Advice Service released research last month which found that most children’s financial habits have already been formed by the time they reach seven years old.

It published a report compiled by behaviour experts at Cambridge University, which found that most seven-year-olds have already grasped how to count out money and know that it is used to buy goods. They have also worked out what it means to earn money and what an income is.

Students turn to gambling and medical trials to fund university

Survey of 2,300 students finds 80% do not have enough money to live on, with one in five turning to gambling to find extra funds

Students are resorting to high-risk strategies to fund the ever-increasing cost of living, according to a survey by money advice website Save the Student.

In an attempt to get hold of extra cash one in five students has turned to gambling with their limited funds, while one in four said they would consider selling their body for medical trials or take a job in the adult entertainment industry.

A small proportion (2%) said they would consider contacting a payday loan company to access cash.

The survey of 2,332 students found that living costs had soared over the last 12 months, with 80% of respondents worried about having enough money to live on.

Does money really talk?

‘My Money Week’ takes place from the 3rd to the 9th of June and schools from all over the UK are gearing up for a week full of jam-packed events and initiatives to help young people learn about financial education.

Former private banker Vivi Friedgut is the author of Money Smarter, a family guide to finances, and welcomes the initiative but suggests that financial education at school should be supported at home.

Vivi says: “Parents are the most influential force in any child’s life; both by what they do and what they say. Financial education in schools is crucial but it complements what is learnt at home – it cannot replace it.

“Since I’ve become involved in teaching financial education to children & students, it’s apparent that many have not had ‘the money talk’ or been engaged in financial conversations with their parents; which is surprising, as critical aspects of responsible money management are best learnt in a real life situations.

“Understanding instant gratification, appreciating the difference between needs and wants and comprehending the consequences of decisions can be heightened by observing parents, as opposed to solely within the confines of a classroom.”

My Money Week is hosted by pfeg who provide schools with free resources, lesson plans, activity packs, competitions, national challenges, one to one consultancy support and a dedicated website for the financial education initiative .

The likes of The Saturdays, Sir Chris Hoy and Tinchy Strider have previously encouraged people to take part by being ambassadors and setting challenges for students.

Schools have hosted fashion shows and fetes, taken part in gardening projects, debates, young peoples’ parliaments, peer mentoring projects, community economy projects and used maths, English, drama, PSHE education, citizenship, enterprise and geography to deliver excellent financial education.

%d bloggers like this: