Students get into debt – it’s obvious. Reading the report “Student Portfolio” of the Polish Bank Association, it is impossible to resist the impression that this state will only get worse.
Looking at the report, it is also impossible to get the impression that both students and banks are optimistic. Probably, if you ask your opinion, securitization funds would also be of good cheer. However, financial institutions usually rub their hands for reasons other than their clients.
Students are probably indebted mainly due to economic conditions, but they can also be folded down to the perceptible slow detachment from the reality of a large group of students. So what can make studying after many years engrave the debtor’s mark on many young people?
The student needs cash
According to the report, in a large academic city, a student spends over 2100 USD per month on living. In 3 years (from similar calculations in 2016) this gives over 30% growth. And looking at the market situation, the trend will probably continue. The largest part of these expenses are costs:
- public transport,
For example, renting a 3-room apartment in such Wrocław or Warsaw alone is over 2 thousand. zlotys, which are most often chosen by students. Of course, those who can afford it, because 40% still live with their parents.
Where do students get money for? Parents take part in their upkeep, there are also students. who combine learning with work. And if that’s not enough, you can always borrow. Can but should it be?
Students are in debt
According to the report, generally young Poles – including students – are not afraid of loans. And someone experienced could say in summary that only fools are not afraid. The fact remains that every fifth person between the ages of 18 and 24 took a loan, usually consumer. As you can guess, the majority will be repaid, according to the Polish Bank Association:
“The total amount of loans that are repaid is over $ 10.5 billion, of which the outstanding amount is $ 8.61 billion”
Characteristic optimism for youth makes almost 60% of them assess their financial situation well. Optimism also comes from estimates of how much future earnings will be. 16% of students would like to earn 5,000 – 6,000 on hand, 28% over 10,000 How does this report to reality? Currently
working people aged 18-30 in 80% of cases earn less than 3,000 USD net, 50% less than 2,000.
If the reference rate is the rate of increase of the minimum wage (100% in 10 years), it is quite easy to calculate that a large part of these people will be disappointed. Their living costs will definitely increase, especially for those who decide to have children.
Meanwhile, such optimistic thinking makes students reach for credit slightly. Many of their predecessors have already found that this approach to debt can affect their lives for years.
The day when “somehow it will be” is not enough
Life on credit can not last forever, you must finally pay it back. If anything means that the student will not do it, suddenly it turns out that on the threshold of adult life, creditors will successfully trim his wings. Financial “errors of youth” in college suddenly will not allow an adult to finance life plans. Some innocent loan from years ago, which you did not pay with carelessness, will deprive the young debtor of the opportunity to buy a home.
And then the question arises, how did it happen? And seeking a solution to the problem of debt (old or new) “yesterday”.
Smart student after the damage
Students are educated, but wisdom comes with experience, and this requires time or prior education. Young people are doomed to learning from their mistakes. How many of them have come into contact with any financial education? However, any person who is considered an adult should have this slight ability to acknowledge that one cannot know everything.
At the first stumble, as most students can think of paying back loans with loans. It is important that he then show wisdom after the damage and give up putting on such a loop around his neck. Students who are in debt have a lot of time and enough energy to cope with their debts. Often, a proper debt relief program and advice from someone with a much larger experience baggage is enough.