Student debt has become a big issue in recent years, especially during the recession. It's not unusual for student debts to reach £20,000 or higher for today's graduates, and this can be a concern for many people.
If student debt is causing you financial problems, the situation can be very worrying - but there may be things you can do.
To answer this, it's important to distinguish between different types of student debt. Most students in the UK can receive a loan from the Student Loans Company (SLC), which is designed to be paid back only when the student graduates and starts earning more than £15,000 a year.
Because student loans are repaid as a small percentage of your earnings, the strain on your finances shouldn't - in theory - be too bad (unless you have other financial issues, of course).
Government student loan repayments are considered a 'priority debt' and are taken from your salary automatically. Debt solutions won't help you directly with these debts, but they could help indirectly, by reducing your payments to your non-priority debts.
However, if you have taken on additional 'consumer' debt in your time as a student, the situation could be very different.The repayment terms on debts such as personal loans and credit cards are very different to the terms for regular student loans, and they can be a much bigger burden on your finances.
If you're managing these debt repayments well, that's fine. But if you're struggling - or if you think you might be about to run into problems - you should speak with an expert debt adviser about what you can do to improve your situation.
There are a number of debt solutions that could help with debts from your student years. Some of the most common debt solutions include:
Debt consolidation loan - a new loan to pay off existing debts, effectively combining them into one larger debt, making the debt easier to manage. It's also common for borrowers to reduce their monthly payments by choosing a longer repayment period (although doing so may mean paying more in interest overall). As with any loan, it's essential to make sure you'll be able to afford the repayments.
Debt management plan - an informal arrangement with your creditors in which your monthly payments will be reduced to match your budget and you'll repay the debt over a longer period of time. Can be suitable if you can't afford your existing monthly payments, but are able to commit to smaller payments. Will damage your credit rating. More on debt management plans and other debt solutions here.
IVA (Individual Voluntary Arrangement) - a formal, legally binding agreement in which you'll agree to repay a set percentage of your debts, usually in monthly payments over five years. On successful completion, your outstanding unsecured debt will be written off and you'll be legally debt-free.
Keep in mind that all of these debt solutions have both advantages and disadvantages, and you should let a debt adviser talk you through each before you decide which one may be right for you.