"The cost of higher education is set to rise by more than 10 per cent in coming years, prompting warnings that many students will be “priced out” of university.
Students from England, Wales and Northern Ireland will be hardest hit, it is claimed.
It feared that total debts could be even higher if the Government lifts the existing £3,100 cap on tuition fees. A review of funding levels will be launched later this year and some vice-chancellors are already calling for fees to double.
However, in Scotland, where tuition fees are paid in full by the taxpayer, total debts are expected to be around half of those in the rest of the United Kingdom.
The latest warning – in a study by Push, the university guide – comes days before 300,000 students receive their A-level results.
The National Union of Students warned that many teenagers gaining university places could be condemned to a “lifetime of debt”.
Wes Streeting, NUS president, said: “With this year's new university students set to graduate with over £23,000 of debt, and graduate employment opportunities at an all-time low, we find it astonishing that universities continue to demand ever higher fees.”
Sally Hunt, general secretary of the University and College Union, which represents academics, said: “It is criminal that generations of students will be saddled with thousands of pounds of debt. For all the talk of widening participation the sad reality is that students and their families are facing ever higher financial barriers to going to university.”
Push surveyed 2,000 students in all years at university.
Undergraduates currently owe an average of £5,000 for each year of study. But a breakdown of the figures showed debt was rising year on year.
Students just coming to the end of their first year of study can expect to owe £21,200 by the time they graduate, it was claimed. Those starting degree courses this autumn should count on owing at least £2,000 more than that, around £23,500 in total, the survey suggested"
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( 3 / 250 )More people then ever are struggling to repay their mortgages in light of the recession. However banks have also been accused of not helping the situation by cashing in on those who are most in need.
"Politicians and economists described the charges imposed on home owners in arrears by Britain’s high street lenders as unfair.
It comes as the number of home owners falling behind with their mortgage payments rises to a 12-year high.
Grant Shapps, shadow Housing Minister said: “With more borrowers in arrears, this is not the time for banks - many of which have enjoyed direct support from the taxpayer - to cash in on homeowners struggling to keep a roof over their heads.”
The Treasury Select Committee has suggested lenders are charging as much as £150 for a visit by a debt counsellor and £35 for sending a letter or making a phone call.
It described excessive charges that go beyond covering administrative costs and are used to boost profits as intolerable.
Seema Shah, an economist at Capital Economics, said: “Repossession and arrears are going to keep on rising, and charges are not helpful to those home owners in difficult.”
The latest housing statistics showed the number of mortgages in arrears by three months or more reached 270,400, equivalent to 2.43 per cent of all home loans.
It compares with a total of 264,700 at the end of the first quarter and 152,700 at the end of the second quarter of 2008, according to the Council of Mortgage Lenders.
It comes despite a drop in overall repossessions after lenders were told by the Government to only evict families from their home as a last resort.
Repossession numbers stood at 11,400 - equivalent to one household in every 1,000 - during the three months to June, the CML said.
It is 10 per cent fewer than the previous three months, but 14 per cent higher than the second quarter of 2008"
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( 3 / 239 )You may have seen in the news today that TV star Neil Morissey has landed in a considerable amount of debt after a property scheme that he was investing in collapsed. In order to try and settle his debts he has entered into an IVA
"The actor, who lives in Crouch End, north London, said he lost £2.5m after investing in a string of hotels and pubs. He told the News of the World he would not file for bankruptcy and intended to pay his creditors in full.
"Bankruptcy's the easy way out," he told the paper. "I decided no, I'd step up to the plate, try to do the right thing and get everyone their money back."
Morrissey has instead entered into an individual voluntary arrangement (IVA), which means that all his earnings, minus his living costs, will go to his creditors for more than three years.
He said: "People advise you to take the easy route – it'll only last a year and you'll be back up and running. But I just thought there are too many good people who've lost their money on these deals, and I wanted to repay them as much as I possibly could.
"I feel morally obliged. Afterwards I'll feel better about myself. Now I'm working very, very hard every second out there to earn another penny. I don't sit around and get depressed about things. It's not my character."
Morrissey, who provided some of the voices in the children's television show Bob the Builder, set up a property company five years ago. It bought pubs and hotels around the country, including Brown's Hotel in Laugharne, where Welsh poet Dylan Thomas was a regular.
The company overstretched itself and collapsed, forcing Morrissey's business partner into bankruptcy"
If you have never heard of an IVA it actually stands for Individual Voluntary Arrangement. It is a legal and government approved method of resolving debt that avoids the consequences of bankruptcy. If you owe over £15,000 to three or more creditors and can't afford to meet the repayments then you may be eligible for an IVA. For more information why not have a look at our IVA FAQ's.
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( 3 / 234 )A case study in the Guardian highlights just how easy it can be to get into debt and also how effective an IVA can be when you are struggling with large amounts of debt.
"Gerald Moylan, from Essex has been a teacher for 10 years, but two years ago his debts started mounting when his wife suffered a serious illness, making it impossible for the couple to meet their monthly household bills.
The 48-year-old, who is head of technology at a state school, owes £56,000, and entered into a joint individual voluntary agreement with his wife after talking to ClearStart, a debt consultancy, this month. After agreeing a fixed monthly repayment, they are due to have their debts signed off in five years. "I didn't want to go down the bankruptcy route, since it would mean we would lose our home," he says. "My wife has been unable to work since her illness, so we were operating on a deficit with debts spiralling out of control to meet ongoing commitments. Our situation became untenable as we were borrowing to repay the debt we'd accrued. It's amazing how quickly it happened, and a shock given that we hardly live an ostentatious lifestyle, with a sparsely furnished house and two 12-year-old cars." Moylan would also have lost his job if he had declared himself bankrupt.
After a bid to remortgage to cover their debts failed, they decided an IVA was the only option: "Lenders wouldn't look at us as our house had fallen in value and because of the amount of borrowing we'd already done. We are still being approached with applications for more credit by banks – the more debt you get into, the more they seem to want to lend you."
If you are currently in debt and wish to seek help through an IVA then why not apply online now. If you would like further information regarding IVAs and how they work then have a look at our guides.
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( 3 / 236 )Credit card companies are set to be told to stop trying to lure those who are vulnerable or in debt into yet more debt. You will probably be familiar with the way in which companies have been able to increase your spending limit on your credit card or send you blank cheques for your credit card which only serves to entice people into creating even more money problems.
"Credit card firms will be told today to stop luring customers into higher borrowing as part of an overhaul of consumer rights. Lenders will be banned from raising credit limits without asking the customer first and ordered to stop sending unsolicited credit card cheques through the post.
They will also be banned from raising interest rates on existing debts and have to put repayments towards paying off the most expensive debt — rather than the cheapest as most now do. Minimum monthly payments will have to rise.
The Consumer White Paper to be published today will also include proposals to deal with online scams where people pay for goods that never arrive. A consumer advocate will be appointed to help people who feel they have been cheated. A new team of police, trading standards and Office of Fair Trading officials will be set up to pool resources to counter scammers.
The proposals will be subject to a three-month consultation. The Finance & Leasing Association, the trade association for credit and store card providers, said that the change could make matters worse. Geraldine Kilkelly, of the association, said: “The lack of wholesale credit and the torrent of new regulation currently facing the industry pose the real risk that the size of the market will reduce even further, with serious implications for consumers — especially those who are most vulnerable.”
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