Student loans 'add to debt culture'
Published On 9 June 2007
Student loans are helping to create a culture where high levels of debt are acceptable and many people have to seek IVAs to manage their finance, an industry expert has warned.A spokesperson for the charity Credit Action, Chris Tapp, explained that most graduates do not struggle to pay off their student loan, but that it does contribute to a culture where borrowing money and getting into debt is seen as acceptable.
"What you have with a student loan is essentially government-endorsed debt on a massive scale," Mr Tapp said.
"Students have grown very used to spending three or four years of their lives living in debt, spending money that isn't theirs that they'll have to pay back, and probably borrowing on an overdraft and credit card at the same time; becoming very, very comfortable with a lifestyle that is essentially lived beyond their means."
In previous generations, Mr Tapp said that there was a "very healthy amount of caution" about getting into debt, but things like student loans have eroded this fear of borrowing money.
"We now have a generation for whom you're extremely odd if you're not in a substantial amount of debt. It's that culture of borrowing that student loans have really fed into," he concluded.
Recent figures from Credit Action show that the average household debt in the UK, excluding mortgage borrowing, reached £8,816 at the end of May.
