The average UK citizen probably just assumes that student loan money is being used as it is designed to be: to cover the costs of attending university. So would it surprise you to know that some of the money is being used for all sorts of unrelated things, including drugs and alcohol? It is true. No one knows the extent of the problem, but there is no denying the problem exists. A recent story printed by the Daily Mail is proof.
The story profiled two young ladies who found themselves battling alcohol abuse during their university years. One of the students admitted to spending her entire student loan pot on drinking. She eventually dropped out of university altogether. Unfortunately, her story is not unique.
The way the student loan system is set up invites misuse of funds from the onset. Moreover, given that first-year university students are often experiencing individual freedom for the first time, it is understandable that many of them would lack the self-control to manage their finances properly. Easy money is there to be spent any time a student wants a drink or a hit of his or her favourite drug.
Student Loan Basics
Student loan money in the UK is divided into two categories: tuition fee loans and cost-of-living loans. A tuition fee loan is only for the purposes of paying for the individual courses a student will take. That money is paid directly to the university. The problem with students spending loan money on drugs and alcohol is attached to the cost-of-living loan.
A cost-of-living loan is intended to provide students with the cash needed to pay their daily living expenses while at university. The amount of money a student is eligible for is tied to household income and where the student lives while attending school. The money is deposited directly into the student bank account to be used in any way he or she sees fit. And therein lies the problem.
Once the money makes it to a bank account, it can no longer be controlled by anyone other than the student. Making matters worse is the reality that students quickly forget that all the money they borrowed will have to be paid back. It never occurs to them that they are using a loan package to finance their partying lifestyles – a loan that incurs interest charges and other fees along the way. Many also fail to realise that once the money is gone, it is gone for good.
Although there is not much parents can do once kids head off to university, it does not mean they are totally powerless. They can spend time in the years leading up to university training kids in proper financial management and responsible use of alcohol. The combination of both would certainly reduce the risk of a student getting into trouble upon leaving home.
Financial management training should include things such as budgeting, how loans work, making good use of credit, etc. It can be accomplished by making children work for pocket money, then helping them set up their own budget to make the best use of the money they earn. If they are financially responsible before they leave home, they will be less likely to wipe out their student loan financing by hard partying.
Addiction Helper wants to be of assistance if you are a student fighting a drug or alcohol problem. We can help parents of students in trouble as well. Regardless of who you are, you can call our 24-hour addiction recovery helpline for free advice, comprehensive evaluations, and treatment referrals. Inform yourself about students and addiction problems from our student addiction guide.