Report: Student loans make debt “acceptable”
UK money education charity Credit Action has warned that the wide prevalence of student loans has helped create an environment in which high levels of debt has come to be seen as acceptable. A spokesperson for the charity said that it isn’t a matter of most graduates having to stretch their budgets to pay off their loans. Instead the problem is that the availability of student loans makes going into debt an acceptable thing to do.
Chris Tapp, the spokesperson for Credit Action, called student loans “government-endorsed debt on a massive scale.” He explained that during their student years, individuals get used to living in debt, not only spending student loan money but also likely borrowing on credit cards and overdrafts at the same time. During this time, Mr. Tapp said, students become “very comfortable” living “beyond their means”.
This is a change, Mr. Tapp from previous attitudes of caution about taking on debt. He said that student loans have lessened this caution and created a culture where it seems unusual not to be in debt.