Debt

Debts to the University

You are contractually obliged to pay the tuition fees on the dates they fall due. If you, or any third party who is supposed to pay the tuition fees on your behalf, fail to pay by the date specified in the invoice from the University, the University reserves the right at any time of the academic year to withdraw you from your programme and to withhold all services until all outstanding tuition fees are paid.

If, at the end of an academic year, you are in debt to the University for tuition fees, the University reserves the right not to allow you to enrol on your programme for the next academic year. If you are in the final year of a programme, the University will not release your certificate, or give a letter confirming an award, until all tuition fee debts to the University are paid.

If you are in debt to the University for fees related to any of the services provided in association with your programme, e.g. library fines, the University reserves the right to withdraw that service until outstanding debts are paid.

Types of debt

• Priority debt means the creditor (or person) you owe money to have the legal right to repossess or cut off the goods or property. Examples of priority debts are rent, mortgages, gas, electricity and secured loans on property or Hire Purchase (HP).
• Non-priority debts are not secured to anything and therefore the creditor does not have the automatic right to repossess any goods, even if you are struggling to repay the money that you owe. Examples of unsecured debts are credit cards, loans, store cards, catalogues, overdrafts, income tax bills, etc.

General advice

• Don't panic or ignore the problem: unopened bills won't go away.
• You can't ignore your debts. Better to pay a small amount than nothing at all - those you owe money to may be prepared to accept low repayments.
• If struggling with store or credit cards stop using them.
• Work out a realistic budget that covers all your income and expenditure. Check with Welfare & International Support in Student Services to see whether there are any grants, student loans, additional allowances, benefits or tax credits you are entitled to that you are not getting.
• Decide which debts take priority - like mortgage, rent, gas and electricity - and which cost you most through penalties or higher interest rates.
• Only agree to pay off debts at a rate that you can keep up - don't offer more than you can afford.
• Contact those who you owe money to as soon as possible. Let them know that you are having problems. Many companies will be helpful if you talk to them.
• If organisations won't accept your repayment offers, seek advice from Welfare & International Support in Student Services.
• If a debt collector calls at your home you don't have to let them in. If you want time to get advice arrange a later appointment. If a debt collector or lender harasses you seek advice from Welfare & International Support in Student Services.
• Check if a loan will be secured on your home. If it is and you do not keep up repayments you could lose your home. If you do not understand the terms of a loan get advice.
• If you're thinking of taking out a new loan to pay off debts make sure you find out the total cost of the loan, not just the monthly repayments.
• Think very carefully before borrowing more to pay off your debts. Get impartial advice and don't rush into signing anything you don't understand.
• If you are thinking of using a fee-charging debt management company, then make sure you understand exactly what you are signing up to. Check what fees you will be paying to a debt management company and how long it will take you to pay off your debts.
• DON'T panic, stress or make yourself ill over debt. Debt problems are solvable and you can put them behind you - as long as you get help - don't be too proud to ask. Welfare & International Support in Student Services may be able to offer some advice or to refer you to someone who can help.
• Keep copies of all letters you send and receive in relation to your debts.

Managing your debts - some options 

If you have serious debt problems here are some of the options available to you:

Consolidation loan

it is not unusual to owe money to a number of different creditors. The annual rate of interest charged by store cards, catalogues and credit cards tends to be much higher than the rate of interest charged on a personal loan by a high street bank. A consolidation loan can be the answer to this problem. All the different card balances and even smaller loans can be paid off with the single loan. This will often offer a single monthly payment, which is lower than the combined total of the different cards. The loan will normally be payable over a fixed period.

Repayment plan

if you find that your debt is becoming out of control and you can no longer afford to meet the required monthly payments, you may be able to contact all of your creditors and negotiate an informal reduced monthly repayment plan to fit within a budget you can afford. Welfare & International Support in Student Services can help you to work out a realistic budget.

Individual voluntary arrangements (IVA)

a formal agreement with your creditors to settle your debt over a fixed period (generally five years) with the interest frozen.

Bankruptcy

a method of dealing with debts that you cannot possibly repay. It is normally seen as a last resort after all other options for repaying debt have been exhausted. If you are declared bankrupt, you will no longer have to repay your creditors yourself. However, this is not an easy solution and not one that should be taken lightly. As a bankrupt person, you will be expected to make your best effort to repay what you can to your creditors through the court. This may involve making regular monthly payments to the court based on what you can afford. You will normally be able to keep reasonable personal items and household goods but you will be expected to sell valuable assets such as property, jewellery, antiques and vehicles. More importantly, as a bankrupt person, your home may have to be sold to go towards paying your debts. A note of your bankruptcy will be kept on your credit file for six years, meaning that after release from your bankruptcy you may find it difficult to take credit or a mortgage during this time.

Please note: Bankruptcy is a serious matter which should not be taken lightly. Before deciding if bankruptcy is right for you, you should take further advice from Welfare & International Support in Student Services or from the Citizens Advice Bureau.

Please note: With effect from 1 September 2004 (1 July 2004 in the case of 'old style' loans made to students starting courses before 1 September 1998), student loans cannot be written off on discharge from bankruptcy, irrespective of whether the student received the loan before or after becoming bankrupt.

Where to get help 

Access to Learning Fund (ALF)

is money given to the University by central government to help meet the living costs of some UK students who are experiencing financial hardship. The available funds are limited and are designed to provide supplementary support to students; they are not intended to be a student's primary source of income.

Please note the fund may be able to assist with the payment of priority debts (e.g. rent arrears, if you are threatened with homelessness), however, funds are limited and are not intended to pay non-priority debts, in such circumstances students are advised to seek advice from Welfare & International Support.

Students may apply to ALF at any point during the academic year, but the first thing you should do if you are worried about money is to speak to someone about your concerns. Initially this should be Welfare & International Support in Student Services.

Budgeting

The Welfare & International Support team's Successful Budgeting web page is designed to help you to monitor exactly what you are spending your money on each month. It will also help you compare your living expenditure with your income to see what is left at the end of each month. This remaining balance is called Disposable Income. It is the money left over each month, which you can use for other things such as saving for a holiday or repaying your debts.

Once you can see where all your money goes, you will be able to see if you have enough Disposable Income to cover your debt repayments. If not, it will be easier to decide in which areas you need to cut back - perhaps entertainment or clothing expenditure. If you would like some help with budgeting you should speak to an adviser in Welfare & INternational Support, Student Services.

Organisations who can help

A number of organisations may be able to help you sort out your debts.

Citizens Advice Bureau

Citizens Advice Bureau gives free, confidential and impartial advice on debt. Details of your nearest bureau can be found in your local telephone directory or online here.
 

Advice UK

(Federation of Information and Advice Centres)
A large network of advice organisations. Contact independent advice agencies through Advice UK

Advice UK, 12th Floor, New London Bridge House
25 London Bridge Street, London SE1 9ST
Tel: 020 7407 4070 (national)
Tel: 020 7407 6611 (London)

National Debtline

Free telephone helpline for people with debt problems in England, Scotland and Wales.
Tel: 0808 808 4000 or visit them online here.
 

Consumer Credit Counselling Service

Provides free confidential service to help achieve realistic solutions to debt problems, avoid bankruptcy and learn to handle money.
Main Tel: 0800 138 1111
CCCS Student Debtline: 0800 3281813 or online here.
 

Related links

Advice UK

Citizens Advice Bureau

Consumer Credit Counselling Service

Debt Advice Foundation

National Debtline

Access to Learning Fund

Successful Budgeting

Welfare & International Support