Press release: NUS Survey shows students are ‘sleepwalking into financial crisis’.

Despite the publicity around the current credit crunch, prospective university students remain unaware of the basic costs of living, and lack information and guidance about how to manage their own finances, according to a survey conducted by the National Union of Students (NUS).

The survey, funded by HSBC, is the first instalment of a ground breaking three-year research project into students’ experiences before, during and after their studies. It shows that the average cost of university life is nearly £450 a year higher than students expect. Some basic living costs were underestimated to a startling extent:

Students expect to spend £510 a year on groceries; they actually spend £710
Students expect to spend £580 a year on household bills; they actually spend £740
Students expect to spend £285 a year on travel; they actually spend £385
 
The survey also reveals that prospective students expect more financial help than they will actually receive; 42% believe they will be entitled to a bursary to help support their studies, but only 28% actually receive one.

As a result, students accrue more and more debt as they progress through their course – with reality often only dawning on them during their third year, when they begin to cut back on expenditure and worry about their overdrafts.

NUS President Wes Streeting said:
“It is clear that many students are sleepwalking into financial crisis. As the credit crunch kicks in, and with food and fuel costs set to rise even further, we can expect more and more students to get into serious financial difficulty, with many having to resort to taking out commercial loans, or being bailed out by their parents.

“Our research shows that prospective students need far more information, advice and guidance about how to manage their own finances. When they leave home for the first time, many students are unaware of the costs of everyday life, and how debt can mount up.

“We also need to overhaul our bursary system. It is extremely worrying that so many students expect to receive financial support, yet do not go on to claim it. At the moment, each university is left to administer its own bursary system, and students tell us that the application process is often very confusing. 

“Instead of the system being different in every university, we need a single national student support scheme, so it is simpler for students to make a claim, and so that support is based on what students need, not where they study.”

Lucy Payne, HSBC’s Youth and Student Manager said: 

“It’s clear students have no idea of the cost of living when going to university. And let’s face it, how many of us knew the price of a loaf of bread, a dozen eggs and a packet of Penguins when we left school? At HSBC we understand the importance of teaching students how to handle their finances properly in order to avoid landing themselves in deep financial difficulty. Which is why we’ve developed a student website, www.talkingmoney.hsbc.co.uk, providing advice and an interactive online service to all students, as well as an online budget calculator. HSBC also has a team of dedicated specialist student advisors in branches up and down the country, 95% of which are within two miles of the top 100 universities in England and Wales as well as online budget calculators.”

This survey was carried out by GfK. Interviews with current students were conducted during 2-24 June 2008, and with prospective students during 23-29 July 2008
Interviews with both current and prospective students were carried out via online questionnaires: a total of 3,135 current students and 250 prospective students were interviewed
The report can be found here: http://resource.nusonline.co.uk/media/resource/Students_Report_August_2008_FINAL.doc
NUS Press Office: 020 7380 6604 / 07866 695 010