Student loans "feed debt culture"

Thru Jun 14, 2007

Experts at Credit Action maintain that student loans fuel a culture of borrowing among younger consumers, despite the fact that they do not pose any significant problem for graduates.

Spokesperson Chris Tapp argues that student loans effectively get young people used to the idea of borrowing and being in debt, which in turn could make them more likely to spend on credit.

The danger inherent in this is that it encourages borrowing which could contribute to financial problems in the future. Mr Tapp stresses that student loans in themselves are largely unproblematic.

"Whilst the student loan itself isn't a problem, it's feeding into a debt culture, which certainly is," he said.

"We now have a generation for whom you're extremely odd if you're not in a substantial amount of debt. It's that culture of borrowing that student loans have really fed into."

Credit Action reports that personal debt in the UK has grown by over ten per cent in the 12 months up to April 2007.