Student appearing stressed.

15 Crucial Tips to Avoid Student Debt

It’s safe to say that being a student doesn’t come cheap. After all, you have your tuition fees and living expenses to pay for, and of course, the odd pint (or two) down the local pub with your housemates.

Add all of this up over three or so years, and you could perhaps find yourself in an unfortunate financial situation.

To make matters worse, the UK Government increased tuition fees to a maximum of £9,250 per year back in 2017. And just a year before this, maintenance grants worth up to £3,500 were replaced with maintenance loans which must be paid back on completion of a university course.

As a result of these changes, UK-based students now have to fork out more money than ever before to get their hands on a university degree, which has understandably left graduates worried that they’d have to contend with a ‘lifetime of debt’.

Thankfully, things don’t have to be as daunting as they may seem. And as much as some people might tell you otherwise, you don’t have to become a hermit.

Take the time to read up on all the ins and outs of student loans; then you’ll be in a far better position to stay in control of your spending and live within your means.

And if you go about things in the right way, you’ll still have the money to socialise and treat yourself, as we all need a little TLC now and then!

Continue reading the following article as we provide our top 15 ways to avoid student debt and cover some useful student money saving tips along the way.

Learn how to budget

Everyone loves spending money, especially on things that make us feel good. But before you go out and blow your student loan within a week of it reaching your bank account, it’s essential to ask yourself a few questions.

Do I really need this? Will I actually use it? Can I afford it? If the answer to these questions is a resounding NO, then as difficult as it can be, you need to resist temptation and don’t buy whatever it is you have your eye on.

To make things easier, set yourself a strict limit on how much you’ll spend each week and on what, while keeping a close eye on your outgoing payments.

Have a gym membership you don’t use? Cancel and do bodyweight exercises instead. Had one too many takeaways this month? Get thrifty and handy in the kitchen. If so, time to cut down on these things. And if you do, we promise your bank account will thank you for it over time.

Either way, identify any unnecessary outgoings you could do without, and if you reach the end of the month and have any money leftover, the wise choice would be to lock it away in a savings account.

However we do realise that’s sometimes easier said than done, especially if a product you’ve had your eye on for a while is on sale, and you just can’t say no! Whatever you decide, just be sure not to go on a massive spending spree at the end of the month!

Don’t wait until you begin your studies to start working

Some people are fortunate enough to have parents who have saved up a large sum of money that their kids can put towards their university living expenses. If that’s not the case, then it might be worth getting a full-time job and delaying your start date at university.

Not only will this give you the chance to build up a substantial amount of savings before you begin your studies, but it will also allow you to learn some valuable skills that will come in handy further down the line.

And if you have an understanding employer, you might even be able to go part-time when you start your studies or perhaps secure a transfer to another company location that is closer to your place of study.

Start saving early, plan for the future 

Granted, saving money isn’t a strong point for most students. But if you’d prefer not to get a part-time job throughout your studies, I’d recommend that you start to save at the earliest possible opportunity.

As luck would have it, there are many savings accounts on the market which offer a decent rate, so it pays to shop around.

Once you’ve found a savings account that you like the look of, simply make an effort to set aside as much as you can each month. If you can lock away this money for a set period, go for it, as you’ll often get a better rate.

Either way, the amount of savings you have will soon start to add up. Then before you know it, you’ll have one less thing to worry about should any unforeseen circumstances arise.

See if there are any scholarships available

Many universities across the UK have various types of scholarships available. If you’re eligible for one of them, then going to university will be far less of a financial burden. So, I’d highly recommend searching high and low for any scholarships you might have eligibility for.

Are you particularly skilled in an area such as sports or music? If so, then you could well be eligible for a scholarship for outstanding students.

Many of these scholarships cover your tuition fees in full, and some even provide a generous grant you can put towards your living expenses. So, it’s definitely worth having a look around.

Check if you’re eligible for any grants 

In the last section, we covered scholarship opportunities and how you should always go for them if you think you might be eligible.

But if you’ve had no luck with the scholarship route, then you’ll be happy to know that there’s another way to boost your funds – by applying for any grants you may be eligible for.

Usually based on need or merit, it’s possible to get free money from your university or a third-party provided you fulfil all the criteria. If you manage to secure a grant, this could help you out massively with your living costs.

So, have a look around online, speak to your place of study, and if you think you might be eligible for a particular grant, be sure to apply for it as soon as possible.

Carefully consider your place of study 

If you know that you’re going to be on a tight budget, then it’s always worth considering moving to a city with a relatively low cost of living.

Do your research, and it’s possible to find somewhere suitable to live that doesn’t cost an arm and a leg each month.

To go a step further, consider studying at a university that’s within a commutable distance from your family home.

If you’re able to do this, you can save yourself a fortune on rent payments. Provided that your parents are happy with you staying at home during your studies, that is!

 Get a part-time job alongside your studies

Life as a student can sometimes be a little overwhelming, particularly if your tutors appeared to have got together in some kind of secret meeting where they all agreed to place multiple deadlines in the same week. But if you’re struggling to make ends meet, a part-time job could make all the difference.

Sure, it’d be nice to have more free time for yourself. But if you could do with some extra income to keep your student debt down, you can’t go wrong by getting a part-time job, whether it’s in the evening or weekends.

It’ll look great on your CV, and at least you can say that you didn’t spend your entire time at university overeating junk food and binging on one too many Netflix series!

Factor in post-study student loan repayments

You probably had the time of your life while at university. Or maybe it’s a period you’d rather forget.

Either way, you will have borrowed a substantial amount of money throughout your studies – probably the most amount of money you’ve borrowed in your life so far.

But once you’ve donned your cap and gown and your time at university has come to an end, it’s time to start paying back your student loan, provided you’re earning over the income threshold.

If you’re a graduate in the UK, you’ll probably be aware of two repayment plans – 1 & 2. If you’re on Repayment Plan 1, then you won’t start repaying your loan until you’re earning at least £19,390 a year (£1,615 a month or £372 a week).

But if you’re on Repayment Plan 2, you won’t have to pay a penny back of your student loan until you’re earning at least £26,575 a year (£2,214 a month / £511 a week) in taxable income.

Regardless of the repayment plan that you’re on, you’ll eventually have to start paying back your student loan, which as you’ll now know, depends on how much you’re earning.

Thankfully, your repayments will stop if your earnings fall below the limit or you become unemployed. Plus, the state will write off any remaining debt after 30 years. So, it’s worth bearing this in mind if student loan repayments concern you.

Find a side-hustle 

Particularly if you’re studying full-time, earning some extra cash can be tough. But if you find that you’ve got a few spare hours each week, I’d advise using them wisely.

Do you have a hobby such as photography, writing, or web design? If so, consider offering it as a service on a freelance marketplace such as Upwork, Fiverr, or PeoplePerHour.

All you need is a Paypal or TransferWise account attached to your bank. If you’re unsure which one is best for you then check out our recent post TransferWise vs Paypal: Battle of the Big Two

Here, you can boost your income and offer a wide range of services. Best of all, you can do something you love from the comfort of your own home, and get paid for it!

And if you like, you can even continue doing this after graduation to earn some extra £££s alongside your full-time job.

Keep your finances in check outside your studies

Have you seen a ‘great deal’ on the latest smartphone? Or perhaps you’ve got your eye on an expensive new shirt or dress you’d like to wear to an upcoming event.

Sure, these are nice things that most people desire. But if you’re worried about student debt, these are precisely the type of expenses that shouldn’t be taking priority.

Luckily, there are many excellent student money saving tips you can follow nowadays, such as switching to a cheaper phone tariff, getting a travel card to save money on transportation, or buying used books instead of new ones.

Take advantage of student discounts 

Being on a student budget doesn’t mean that you have to sacrifice your social life and confine yourself to your bedroom. If you do some digging around, you’ll find that many merchants both online and in-store offer discounts to students, meaning it’s possible to get a great deal on meals out, your next computer, and a whole lot more.

I’d recommend signing up to a student discount scheme such as Unidays or Totum, which allow you to take advantage of excellent student discounts as well as being great sources of money saving hacks for students.

Cut your living expenses

When you’re heading off to university, it can be incredibly tempting to rent the most lavish accommodation there is. If you can afford it, then that’s fine.

But before you go ahead and sign a tenancy agreement, you should think long and hard about whether you’ll be able to meet your rent each month comfortably and have enough left over for your other expenses.

If you think you might struggle, then it’s always worth considering somewhere a little more affordable. That way, you’ll hopefully have some extra income at the end of the month that you can place into a rainy-day fund (or perhaps treat yourself, within reason!).

Work during the summer 

Your studies have finished for the summer, and now it’s time for a break. Or is it?

You might be tempted to head off to the other side of the world to immerse yourself in the adventure of a lifetime, which is all well and good if you’ve saved up for it.

But if you’re serious about keeping your finances in check, it’s well worth getting a temporary job for the summer.

Not only will this allow you to supplement your income nicely, but it’s also a great way to make useful contacts for the future, make productive use of your time, and build up your skills in the workplace.

Even if it’s something as simple as stacking shelves or collecting glasses, a few extra £££s in your bank account each month will certainly come in useful. Plus, it means you won’t be confined to your bedroom until you return to university!

Borrow carefully

Nowadays, many student bank accounts on the market come with a 0% overdraft which can provide you with some financial respite when you need to make a bill payment before your next student loan instalment is due.

However, you shouldn’t rely on overdrafts, as you’ll often reach your limit quicker than you think.

Similarly, credit cards can help you establish and build up a good credit rating. But you should always pay off your bill in full every month to avoid interest payments and prevent any negative impact on your credit score. Luckily, there are many student-focused cards to choose from on the market.

But always remember that you should proceed with caution when it comes to getting a credit card. Not using one in the right way can do more harm than good and potentially wreak havoc on your financial wellbeing long into the future.

That said, making ‘good’ debt part of your life (debt that you can realistically afford) can benefit you greatly.

For example, it’ll help you build and maintain a high credit score. And if you consistently make your repayments each month, getting a mortgage or a better credit card further down the line will be far more achievable.

Just be sure to avoid so-called ‘bad’ debt such as payday loans which charge incredibly excessive interest rates up to 1,500% and sometimes even more!

Consider speaking to a debt advice service

Sometimes, cutting out unnecessary spending doesn’t get the results you were hoping for, and you might be unsure of what step to take next.

So, if all else fails, there are several places from which you can get student debt advice that will point you in the right direction.

You might be a little apprehensive about getting help, but there’s no need to worry. An experienced debt advisor will help you find ways of managing your debt effectively, and will always be happy to sort out any issues you may have in a professional, courteous manner.

Final Thoughts 

That concludes our guide to avoiding student debt! By this point, you should have the knowledge you need to keep yourself financially stable and hopefully will have learned some useful money saving hacks for students along the way!

All in all, it doesn’t have to be challenging to stay in control of your finances. Although it does take commitment, willpower, and consistency. Stick to these principles, and you’ll be well on your way to waving goodbye to your student debt worries once and for all.