On 13 November 2018, as part of Talk Money Week, the APPG Debt and Personal Finance held a reception with universities, charities and money advisers to discuss the financial pressures facing students.
The event considered new research for the Money Advice Service by the National Association of Student Money Advisers (NASMA) on the student experience of money at college or university.
Yvonne Fovargue MP introduced the event, saying how NASMA’s research provides grounds for concern over student finances, as well as grounds for hope. The research shows a significant minority of students, around one in five, are struggling with their finances. Of those who have gone overdrawn, 40% had used an unauthorised overdraft leading to additional charges. But there are also major positives: around three-fifths of students were found to be working to a budget, putting to bed stereotypes about students living a charmed, care-free life.
Sarah Poretta, UK Director of Financial Capability for the Money Advice Service, said the research gave new insight into how students think about money, showing not just the position they are in but also how they felt about it. It’s important that students facing financial difficulty know about the valuable help available from organisations such as NASMA. Sarah said organisations like NASMA helped students to make the most of their money and enter work with a plan to achieve their goals. This is part of MAS’s overall aim to work with thousands of organisations, up and down the country, to build collective impact and improve the UK’s overall financial capability.
Anita Bailey, Financial Capability champion for NASMA, said the research categorised different types of students into five different types, ‘supported and sensible’, ‘confident and thrifty’, ‘inexperienced and at risk’, ‘anxious but spending’, ‘disengaged and overwhelmed. Anita said the research provided a ‘diagnostic toolkit’ that will help NASMA tailor its interventions and develop and expand the reach of its valuable work.
Shakira Martin, President of the National Union of Students (NUS) welcomed NASMA’s work. However, the wider context is students facing high costs and insufficient income. In particular, those from working class backgrounds faced a ‘poverty premium’ to access post-16 education, such as high course costs and expensive transport and accommodation. The NUS Poverty Commission want to tackle pressures on student incomes, for example so more employers pay the living wage. The NUS also wants reforms to the student loan system. In particular, paying loans in lump sums once a term is out of date and undermining effective budgeting. Campaigners say loans should be paid monthly or weekly, to help students manage their finances, and avoid debt from unnecessarily building up.