This page explains about different types of debts you may have and what you can do about them.
A Welfare Adviser will be able to assess your individual circumstances and advise you on the best options for dealing with your debt issue, which might include referring you to a specialist debt advice agency. If you prefer, you can reach out for free debt advice yourself using MoneyHelper's debt advice locator.
Getting into debt can happen for a variety of reasons, depending on individual circumstances. Perhaps your available income from student funding or part-time work doesn't stretch as far as it used to due to inflation and economic recession, or you have sudden unexpected financial commitments. In either case, you might decide your only option is to take out loans or use credit cards to top up your income but you find you can't keep up with the payments you've agreed.
It can sometimes be the case that you forget to notify Student Finance England, your funding authority or welfare benefit agencies of a relevant change in your circumstances. A relevant change could be becoming a full-time student when your eligibility for benefits ceases, or if you interrupt your studies but you still continue to receive funding you are not eligible for. Once the agency realises you have been overpaid, they will take back the overpayment, often without warning, which leaves you in debt.
An increasing number of students are also turning to gambling and cryptocurrency investments as quick way to generate income. More often than not, this is the fastest way to end up in debt. See our Scams and Fraud web page which highlight the risks involved in these.
Most students will need to borrow money to fund their studies. In theory, UK-government undergraduate and postgraduate student finance loans are a debt. However, these are student-specific loans, usually offered at lower interest rates than those for standard bank loans and only repayable after you have completed your course and you are earning a minimum amount of money.
Many banks offer undergraduate and postgraduate student account holders an interest-free overdraft which is a useful source of additional income. However, it's really important to stay within your agreed limit, as fees for unauthorised overdrafts can be expensive. See MoneyHelper's guidance for more information.
If you owe money to Queen Mary University for your tuition fees and cannot pay what you owe by the required deadline, you will usually be de-registered from your course, unless there are other options available to you, such as interrupting your studies. If you are de-registered from your course for non-payment of tuition fees, this means you will no longer be a Queen Mary University student. There are options for appealing and re-instatement on your course which would allow you to continue your studies provided you meet certain criteria. For more advice about tuition fees, de-registration and interrupting your studies, see our Resitting, interrupting, transferring and withdrawing guidance for home students and our Changes to your programme guidance for international students.
If you can pay your tuition fees by the deadline, but you owe other money to the University such as Queen Mary University halls accommodation fees, you should still be able to progress your studies and graduate with your award. Contact a Welfare Adviser if you need advice about managing your debts to the University.
Payday loans are short term loans, usually lent for a period of a few days or weeks. They are a very expensive way to borrow. They can be easy to obtain, which makes them risky, as you might take one out without properly considering the consequences i.e. whether you will be able to afford to repay it. Payday loans tend to have a fixed fee attached to them, rather than an interest rate (as a loan or a credit card would have) so the fee is very high compared to the amount you have actually borrowed. Taking one out can make your situation worse. You can find out more on the MoneyHelper website.
Payday loans should be avoided if at all possible, and you certainly shouldn't take out a payday loan if you are not 100% sure that you will be able to repay it on the due date. If you cannot make the repayment, the fee you incur will increase substantially. Many people end up taking more payday loans to repay existing payday loans, and get into an unmanageable spiral of debt, which negatively affects their credit rating and their ability to obtain credit in the future. If you believe you were mis-sold a payday loan, you may be able to reclaim the amount you paid in interest, fees and charges - this is explained on the Money Saving Expert website.
Another form of short term borrowing is from Loan Sharks. These should be avoided as they are illegal unlicensed lending companies, who often go door to door to try and persuade people to borrow money from them. They are known to use illegal methods to ensure that customers repay their debts, including violence. Find out more, including how to spot a loan shark, on the MoneyHelper website. If you know of loan sharks, you can report them on 0300 555 2222, or text LOAN SHARK and the lender's details to 07860 022 116 or email reportaloanshark@stoploansharks.gov.uk.
If you owe short term loans, contact a Welfare Adviser in the Advice and Counselling Service. They will help you to explore all of the options available to you for increasing your income, rather than taking out short term loans which you may be unable to repay.
This type of borrowing includes credit cards, store cards, and non student specific bank loans. These usually have high interest rates and are repayable on a monthly basis while you are still a student, therefore it is likely that you will struggle to afford repayments. If you already have debts on which you cannot afford the monthly repayments, you need to take action - see below.
If you are running out of money, contact a Welfare Adviser in the Advice and Counselling Service. They will help you to explore all of the options available to you for increasing your income, as an alternative to you borrowing money which you may be unable to repay.
If you have debts which you are unable to manage, for example credit card repayments which you cannot afford, or rent arrears or council tax arrears, contact us for advice.
One option we can help you consider is a referral to Breathing Space: a new initiative which allows you extra time to resolve any debt issues when all interest and charges are frozen. There is standard breathing space of up to 60 days or a Mental Health Crisis Breathing Space which lasts for the duration of your treatment plus 30 days. MoneyHelper's guidance explains more about the new scheme.
If you ignore any debts, they can very quickly get out of control. If you are in rent arrears, you could lose your home. If you have council tax arrears, the local authority could send enforcement agents (previously known as bailiffs) to visit your home and remove your possessions. If you miss repayments on credit cards, or pay late, charges are often added to your debt, and this higher balance will increase the amount of interest you pay. Defaulting on repayment agreements can affect your credit rating, which would make it harder for you to get credit in the future, such as a mortgage.
Do not ignore unmanageable debts: the problem will not just go away. Contact a Welfare Adviser as early as possible. However it is never too late to seek advice and something can usually be done to improve your situation. If you prefer, you can contact the organisation you owe money to yourself. However, many creditors often take their customers more seriously when they have contacted a specialist for debt advice.
If you have a mental health condition, see below for advice about 'Debt and mental health'.
Personal finances and mental health often have a strong impact on each other. If you are struggling to keep control of your money, you may find that your mental health is affected. Likewise, if you find that you cannot cope with your feelings or behaviour, you may find that you get into financial difficulties.
The mental health charity MIND has some useful web pages which can help you to understand more about how mental health issues can affect your finances, as well providing helpful tips for taking control of your money.
The Money Saving Expert website also has a free downloadable guide to dealing with debt for people with a mental health condition. This guide has been written to help people with mental health conditions understand how this can impact on their financial situation, and also how being in debt can lead to mental health issues. The guide explains some practical steps that you can take to improve your financial situation.
You can request your mental health practitioner refers you to Breathing Space, a new initiative which gives you additional time to resolve your debt issues when all interest and charges are frozen; either a standard 60 days or, if you are experiencing a mental health crisis, the duration of your mental health issue plus 30 days. MoneyHelper's guidance explains more.