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Debt tips for students

written by Joel
26.01.11 Posted in Finance 0 5

A proposed loans scheme could leave university students with debts of up to €25,000 if it goes ahead, after a recent report said it is "essential" that students make contributions to the cost of third level education.

The National Strategy for Higher Education to 2030 report, also known as the 'Hunt Report', said an increase in government funding alone would not raise enough capital to meet future third level education costs.

The report suggested that students may in future be expected to make direct contributions to the cost of their education. This would, it recommended, come from a combination of tuition fees and an income-contingent student loan scheme.

The report has been met with criticism from various analysts. The Irish Federation of University Teachers told The Irish Times that the report was "disappointing, often confused and a missed opportunity". Dr Pádraic Conway, writing for The Sunday Business Post Online said: "The Hunt Report has major flaws which, given its ambitious claims, should give anyone pause for thought."

But Minister for Education Mary Coughlan said at the launch: "I want to make it clear that it is not my intention that students should be left with an unmanageable debt burden upon graduation; rather, students should make an equitable contribution to the overall cost of the significant economic advantage they gain from higher education."

A debt expert at debtadvisorycentre.ie commented: "It remains to be seen whether the loans scheme will actually be introduced, but a lot of future students will be concerned about the prospect of getting into so much debt for their education."

Some tips for students

It's unclear whether - and in what form - the proposal for student loans will go ahead, but already many students find themselves in debt every year. For some, at a time when money is tight, it can be tempting to turn to credit. Here are some tips for students who want to keep their finances in check.

Plan a budget
Anyone who's serious about keeping a healthy bank balance should live by a budget. Putting a budget together is quite simple: add up your monthly essential outgoings and subtract the total from your income.

The resulting figure will show you how much you can afford to spend on non-essentials per month without using up money you need for the real essentials in life.

Make a note of these numbers - plotting out each individual cost on a spreadsheet is an excellent way of doing this or download an App such as 'My Student Budget Planner' Simply input your income and outgoings, set the period you want to budget for and the app will show you how much you have to spend each week. It’s the ideal pocket companion for those cash-strapped student days.

Avoid unnecessary credit
It may sound obvious, but if you want to stay out of debt, don't get into debt in the first place. It may be tempting to use that overdraft or credit card to make your finances stretch further, but paying them back could prove a problem. It's always best to do everything you can to steer clear.

Get yourslf a PrePaid Credit card. They work the same as any other Credit Card but without the Credit! Thre are a number on the market now that will allow you to purchase online or in store and can be topped up in newsagents.

Joel

Joel Stanier, Finance writer with the Debt Advisory Centre, a company offering professional debt advice, drawing on our extensive experience to help people tackle their money problems.

Joel
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