Three city students bankrupt each month

Published on Friday 29 May 2009 09:57

THREE students every month are declaring themselves bankrupt in Edinburgh, writing off their crippling debts, new figures have revealed.

Across the Lothians, a total of 35 students a month are being made bankrupt. Ten years ago the figure was just five a year.

Students are increasingly finding it hard to meet the costs of university life, with recent figures showing that about 16 million was distributed by the Scottish Government in university hardship funds for 2008-09, an 8 per cent increase on 2007-08.

Edinburgh universities have seen as much as a 50 per cent increase in students asking for financial help.

Students' financial problems are said to be worsening because of the recession, with student leaders claiming some will be forced to drop out of university because of a lack of part-time jobs.

The careers service at Edinburgh University has reported a 20 per cent reduction in the number of jobs being advertised through it for students trying to fund their way through their studies, despite working hard to find vacancies.

Lothians MSP Gavin Brown – who asked education secretary Fiona Hyslop for the student bankruptcy figures – said they were a "stark reminder" of the SNP's failure to deliver for students in the Capital.

He said: "When the SNP were elected, they promised to wipe out student debt. They have utterly failed to deliver on this pledge, betraying thousands of students in the city."

If a student loan has been included in the bankruptcy process, students will be free from repaying it, as well as any other debts, including credit cards.

But Adam Ramsay, president of Edinburgh University Students' Association, says declaring bankruptcy was a last resort for students, and was not an easy option to get them out of paying back student loans.

He said: "What this shows is a government policy which is forcing young people to bankrupt themselves trying to get an education.

"What it doesn't show is that for every student who declares themselves bankrupt, there's hundreds more who are nearly at that stage.

"Hundreds or even thousands of students are living in poverty, which is very worrying.

"Clearly, declaring yourself bankrupt is a big step to take and no-one takes that decision lightly because it causes problems for the rest of your life. People wouldn't be doing it unless they really had to and I think it's only going to get worse."

Edinburgh University student Stevie Wise had to drop out of her course because of financial troubles. The third-year had to move back home with her parents after running out of money, but was able to return to her studies later after receiving 1,200 from the university's student hardship fund.

But a Scottish Government spokeswoman said student debt is actually falling.

She said: "By scrapping the 2,300 graduate endowment fee, which around two-thirds of students added to their loans, this government has removed a significant part of most students' debt, which fell in 2007 – the first time since devolution – and now stands at 5,354 in 2008, compared to 9,580 in England."