Press Release

FINANCIAL PRESSURES MOUNT FOR STUDENTS

Equifax reveals 38% haven't reviewed their spending in the face of the recession

London - 5th October 2009 - As the new University term starts this week, this year's crop of new undergraduates will receive a crash course in managing their finances, with the recession putting increased pressure on students. In its latest survey of students and their finances, Equifax, the leading instant online credit information provider, reveals that 39% of university students haven't saved any money to help them through their studies. While 29% have received money from their parents, 36% have had no financial help. With no additional savings students could be facing a harsh autumn term.

"Our survey of students suggests that many heading back to university this week could find themselves struggling if they don't keep a keen eye on their finances," explains Neil Munroe, External Affairs Director for Equifax. "Although 77% said they don't incur bank charges from missed payments and unauthorised overdrafts, 19% only pay the minimum on their credit card each month which could mean they are storing up a mountain of debt that will take a long time to pay off when they graduate.

"Recent reports of student loans being paid late due to high demand means some freshers could slip into bad habits from the start, such as spending on credit cards for day-to-day expenses. Those only paying the minimum each month will see interest mounting, pushing them further into debt. We urge students to manage their finances from the first week of term to ensure they minimise the risk of falling into serious debt."

When it comes to student spending, it appears that many need to focus on managing their finances. Nearly 40% of students who responded to the Equifax survey haven't reviewed their spending since the recession and, worryingly, 30% don't know how much they spend on credit cards and their current account until their statement comes in each month.

Perhaps because of this lack of awareness of their monthly outgoings, it also appears that getting into debt has a stigma with nearly 1 in 5 students, with 19% of those surveyed saying they hide the level of their spending and debt from their parents/partners.

However, the majority of students who responded to the Equifax survey seem to think they will have limited debts once they graduate. 33% expect to have a student loan of less than £5,000 with a further 33% expecting to have a student loan of between £5,000 and £15,000. Added to this, 39% think they will graduate with under £5,000 of other short-term debt and a further 16% think they will have between £5,000 and £15,000 of credit card and other short-term debt to pay back at the end of their course.

Munroe adds, "Understandably, 35% are worried about repaying their debts while studying, while 42% are worried about paying debts off after they have graduated. Indeed, 38% plan to move back with their parents to help them manage their finances at the end of their course. And it seems, in particular that the recession is weighing heavily on those students entering their last year with 61% of those surveyed worried about finding a job after they graduate.

"But despite all the financial hardship, there is still overwhelming support for further education with 93% of respondents saying people should go to university in time of recession," Munroe concludes.

"Students should aim to start their time at university debt-free for the best chance of graduating in a strong financial position. There's clearly a lot of financial pressure and the recession just adds to those worries. However, with a bit of planning and careful management, students can stay in control of their finances."

ENDS

*Equifax surveyed students on 14th September 2009 -538 responses analysed

For further press information please contact: Elinor Puzey, Louise Fowler, Cecile Stearn or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: louise@harrisonsadler.com