Students are borrowing large sums of money without being aware of their bank's repayment conditions, leaving them in dire financial situations when they graduate, a student money website has warned.
Nearly 70% of students are worried about repaying the money, highlighting the need for personal finance education, according to a survey by Save the Student! The majority of students "heavily rely" on bank overdrafts to supplement the increasing cost of higher education. Out of the 2,219 students surveyed, 45% said they would not have gone to university without such a facility.
And half of the students said they were unaware of their repayment conditions. One final year undergraduate admitted:
"I hadn't realised that I have just a year to pay back my full £3,000 overdraft, until I got a letter from my bank a few weeks before graduation. New students should apply with caution."
Founder of Save the Student! Owen Burek, said the "severe lack" of financial education for young people compounded the problem.
"If students are now expected to take on in excess of £40,000 of debt for their university education, then they should rightly expect to be better educated about both personal and student finance to maximise the life choices they have to make.
"They don’t teach this stuff in schools."
In December, MPs called for finance lessons to be made compulsory after a petition by money expert Martin Lewis attracted more than 100,000 signatures.
As a result of the survey, the website has produced The Essential Student Guide to Finance, which hopes to educated the half a million plus students starting university this year.
The guide's authors are "confident" the information can help reduce student debt by up to £7,000 a year.
The guide is available to download for free here.
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