Student loans – how to keep your debt down (SOLVED)

University living comes with numerous stereotypes: living in squalor, eating baked beans out of a tin, and partying hard until the sun comes up.
But the reality is that gaining a degree, and living at university, come at a price. It’s a very lucky student who doesn’t need to apply for a student loan, and the vast majority of students take out a sizable loan from the Student Loan Company, before paying it back through their salary once they’ve graduated and our working.

Overall, student loans are having a huge impact on economy and politics as Nick Hillman discovers in his article on student loan history. While this isn’t too bad an option for individuals – student loans have a low interest rate and the automatic payments through salary make it easy to forget about, it’s still a debt. And, as such, there are things you can do to keep the debt as low as possible.

Living on a budget

There is a huge temptation at university to blow your student loan on having fun. When you’ve just received your loan installment for the term, and so have your friends, and you’re not used to having a four-figure sum in your bank account, it’s easy to give in to temptation and go wild.
But remember, that figure is to last you all term.
First things first, come up with a budget. Work out how much you’ll need each month on everything, including for food, for toiletries, for travel. There are many ways you can save money and this article on budgeting teaches some good lessons in frugality. Include a sum in your budget for going out – nobody is going to tell you not to enjoy your university experience, but don’t blow your loan on nights out that you won’t remember. At the end of each month, put the money remaining from your budget onto your debt – whether this be an overdraft, a credit card, or, if you don’t have either, onto your student loan by phoning up the Student Loan Company and making a payment.
Sensible living at university is often difficult, there’s no denying that, but it’s essential if you’re committed to managing your finances.

Know what you’re entitled to

Many universities offer grants and bursaries to students who are short of cash, and you could well be entitled to a sizable grant to help you get by. Speak to your university – don’t just assume you won’t be entitled to anything. You’d be gutted if you found out you were but it was too late!

Supplement your income

University offers a great chance to get a part time job, because of the plethora of cafes, bars and clubs, as well the usual city offerings of shops and services. Your university is almost certain to have a careers office, and maybe an online service, where the university itself as well as local businesses will advertise part time jobs to students.
There’s also the added incentives of meeting new people and making new friends through work, as well as gaining real life work experience.
If you do get a part time job, make sure you keep track of tax payments. You’ll only need to pay tax if you earn over £8,105 in the tax year – although, paying the tax and then claiming it back (which is easy to do) is a good way of saving.

Use your vacations wisely

Many students find themselves twiddling their thumbs during their long breaks from studying. And, while the idea of staying in bed for three months sounds great at first, it inevitably leads to boredom.
Summer, Easter and Christmas breaks are all great opportunities for students to earn a sizeable amount of income by working full time. This is definitely recommended, but make sure you’ve got time for the essays and assignments you’ll most likely have to complete too.


When it comes to paying off your student debt, make sure you know which debt is the most important for you to get rid of. Most students have more than their student loans; they also have overdrafts and credit cards, either through poor financial planning, or simply necessity.
The likelihood is that your credit cards and overdrafts will have larger interest rates than your student loan, so make sure you concentrate on paying these off first. They’ll also affect your credit score if you miss payments.

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