Students are racking up crippling debts because they’re not being taught the difference between student loans and other forms of credit, a financial education charity warned this week.
Chris Tapp, director of Credit Action, said because it’s “basically impossible” to get into difficulties with student loans, students are given the message that it’s fine to be in debt.
Tapp believes students should be taught the difference between student loans and other debts such as overdrafts and credit cards to help them avoid getting into financial difficulties.
“It’s important to make a distinction between the kind of burden that you face with student debt as opposed to any other type of debt,” he said.
“I don’t think that’s been done as effectively as it could have been by the government and others.”
Two years ago, before the onset of the credit crunch, Tapp warned that student loans were fostering a culture of debt that encouraged students to “live beyond their means”.
“We now have a generation for whom you’re extremely odd if you’re not in a substantial amount of debt. It’s that culture of borrowing that student loans have really fed into,” he said.