How to Avoid Student Debt

Higher education is supposed open doors to exciting new opportunities; to maximise your potential and invest in the future. However, it can increasingly come with a financial weight: student debt.

What is Student Debt?

Student debt is the money borrowed through a Student Loan. Student Loans are intended to help pay for tuition fees – which may otherwise be unaffordable for most -and living costs while studying at university. The Student Loans Company (SLC) provides student loans, and you only start repaying them once you’re earning above a certain income threshold. Sounds good – but, as with any form of borrowing, care must be taken.

The amount you must repay will depend on how much you earn, not how much you owe. After a set period (usually 25–40 years, depending on when you took out your loan), any remaining balance is written off automatically.

How Do Student Loans Work?

Student loans incorporate two main parts:

1. Tuition Fee Loan – this is paid straight to the university to cover tuition fees.
2. Maintenance Loan – paid into your bank account to help with everyday living expenses.

Once you’re earning above a certain threshold, which depends on which “plan” you’re on, repayments are taken automatically through your salary, much like tax.

Another key way in which student loans aren’t like normal debt is that they don’t appear on your credit file. Nor do they affect your credit score. They’re more like a graduate contribution and if you don’t earn enough, you simply don’t repay.

Can You Avoid Student Debt?

Completely avoiding student debt can be nigh on impossible for most of us – unless you avoid higher education altogether. That doesn’t need to be as negative or unambitious as it may first sound. More and more professions encourage apprenticeships – and even degree apprenticeships.

Degree apprenticeships are well worth considering. Not only will you graduate without – or at least with far less – debt, but you’ll also earn as you learn. Better still, you’ll have three years or more of relevant work experience under your belt. That’s truly invaluable – especially in a time when more and more people are graduating and finding themselves unable to secure work in their chosen field.

Make Student Money Go Further

However, if the traditional university route is essential, there are still many ways to minimise borrowing and keep your finances as healthy as possible while you study:

• Work part-time while studying or during holidays: many retail and hospitality businesses take on students. Don’t look down on fast food joints – many employers will respect that you’ve got your hands dirty and worked hard.
• Apply for grants, bursaries, or scholarships – these don’t need to be repaid. Certain industries will have specific programmes to investigate, and some companies will sponsor suitable applicants through their degree while conditionally guaranteeing a position upon graduation.
• Live at home to cut living costs: many students poo-poo this option, determined to enjoy the ‘university experience.’ If this is you, ask yourself if that experience would be worth accruing debt even before embarking on a career.
• Budget carefully: knowing where your money goes helps prevent unnecessary borrowing. Spreadsheets are your friends – record every penny you spend. Search out reduced items in supermarkets or download the Olio and Too Good to Go Look for free budgeting apps, too.
• Facebook is full of giveaway groups for furniture and other essentials – check in your location – and also advice groups for students and their parents.

Whilst the tuition fee segment of the loan is unavoidable, making savings elsewhere can make a big difference.

Can Student Loans Be Written Off?

If you find yourself really struggling, you may be researching debt solutions. We are happy as always to help and offer advice. However, unfortunately, student loan debt itself can’t be written off through debt relief or insolvency solutions such as IVAs or bankruptcy. A student loan is a government-backed loan and is therefore treated differently from other types of borrowing.

However, if your student loan is only part of your financial worries, there’s still support available.

Help With Other Debt Worries

When we’re young and facing life away from home for the first time, it can be easy to fall into debt – especially when trying to enjoy that uni experience. If you’re struggling with credit cards, overdrafts, personal loans, or household bills, we can help. Our team can point you in the right direction to:

• Review your full financial situation.
• Contact creditors on your behalf.
• Explore debt solutions tailored to your needs.

Even though student loans can’t be included, other debts can often be reduced, paused, or written off depending on your circumstances. The most important thing is to reach out and ask for help and advice before things get worse.

Remember: your education should be a springboard, not a millstone. With the right advice and planning, and a careful approach, you can keep your finances under control and focus on building the future you studied for. If you need help, contact us now.