student debt
© Oleg Dudko |

Whilst higher education is subsidised by the government through student loans, is it enough to save graduates from student debt, and how has this affected the UK economy?

New analysis by MoneySuperMarket explores the state of the UK’s student debt and the impact this has on the students themselves.

The UK’s student debt is currently just over £100 billion3, and is projected to hit £1.2 trillion by 2049. The debt currently breaks down to £50,000 worth of debt per capita, which 83% of graduates will never pay back4.

Furthermore, the results reveal that the average student loan does not cover the entirety of a student’s costs; while the average student loan is reported to be £2,094 per term5, a student’s total spend comes in at £2,235.836, £141.83 more than the loan offers.

Breakdown of student spending

Category Average Cost (£) Per Month
Accommodation £465.54
Groceries £76.30
Nights Out £46.10
Study Materials £13.70
Travel Back Home £25.00
Clothes £30.10
Gym £10.60
Laundry £17.12
Alcohol £41.07
Eating Out £36.10
Household bills £45.20
Trips £22.90
Day to Day Travel £41.20
Mobile Phone £15.00
Home Entertainment £8.40
Total £894.33[i]


Due to the disparity between student spending and student loans, an incredible 85% of students reported that they had to rely on additional sources of income outside of their loan in order to cover their spending. 46% receive money from their parents or family, and 42% decide to work part-time.

With that being said, overdrafts feature heavily in student spending habits, with 61% using them to pay for their groceries, 48% for their rent, and 28% on bills.

In fact, 30% of students chose their current bank accounts because of the overdraft options available – and 42% regularly dip into their overdrafts to an average total of £548.

Student spending tips

30%  of students worry about their finances every day, while a further 31% are concerned on a weekly basis.

MoneySuperMarket have created eight tips to help students manage their spending better. Some of these include:

  • Cut down you travel costs – As a student you are eligible to travel discounts by means of a 16-25 railcard through National Rail, which costs £30 and will save you 1/3 on all rail fares. Some banks provide this as a sign-up “freebie”, or you can apply for one through Transport for London (TFL).
  • NUS card – The NUS card is something known among college and university students alike, giving students great discounts across the UK with a wide variety of brands like River Island, Superdrug, ASOS and National Rail. The NUS card is a great way to save money without limiting what you normally buy.
  • Seek financial advice – Of the students who admitted to worrying about their finances every day, only 19% sought any form of financial advice. Most banks offer free support when it comes to choosing accounts or managing overdrafts. For those that don’t, government-backed companies like the Money Advice Service or debt charities can help guide you through difficult times.

Sally Francis-Miles, money spokesperson at MoneySuperMarket, commented: “It’s not surprising that student loans don’t cover the cost of living for students. The Government takes into account that parents will support their child in addition. Obviously, that’s not always the case so it then falls on the student to get a part-time job or to save before going to make up the shortfall.

“While they can cut back on unnecessary costs – takeaways and cinema trips for example – expecting students not to spend any money on socialising or visiting family and friends is unreasonable.

“We recommend that students always look for ways to save money where they can, but for those who have real financial concerns, there are often financial support offices at universities to help.”







5 MoneySuperMarket survey data 2018



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