Is now the best time to have a gap year before university?

by CCCS on 24 August 2011  |  3 comments
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Taking a year out to learn about money could be vastly beneficial when you get to uni...

Nobody could have missed the news last week about the record number of applications for university places this year, ahead of fees skyrocketing for the 2012 intake.

TV, the web and the press pages have been filled with stories of anguished students desperately trying their best to get a place before it's too late.

So what’s the exact difference between going to uni this year or taking a year out and getting on the course of your choice next year when hopefully it won’t be as busy?

The difference is you will be expected to pay thousands more in the long run.

Take a gap year

So you might be gutted, or have children who are pulling their hair out that they can’t get a place. But how about looking at it as an unexpected opportunity to take advantage of a gap year? Missing out this year could be the best thing that ever happened to you.

Think of it not as a gap year but a cash building year.

Most students stumble into university with a handful of credit cards and a never-ending overdraft. The banks like to get in there early and offer really good rates that end the minute you finish university.

For many young adults, the credit bonanza offered at university is their first experience of debt; all their peers are in the same boat and how else are they meant to survive?

Harsh lessons are often learned later when a student is still carrying the same amount of credit debt five years after university has ended.

Debt hangover

It seems the onset of the credit crunch has meant a lot of unsecured lending to younger people has dried up. This might be a good thing in the long run but if you want to go to university, some use of credit might be needed.

Student loan fees are one thing - yes, you’re going to be saddled with a bigger loan to repay that is going to be with you well into adult life - but what about the credit cards and the overdraft?

It’s one thing owing on a student loan, but it’s another thing owing to a bank that likes to charge high interest rates and that can take court action when you can’t repay.

By taking a year out now, can you miss out on a big student debt hangover?

We’ve blogged before about how taking a job at a young age can improve your CV and prove to future employers that you’re not scared of a bit of hard work.

Even with a part-time position, it would be possible to save a couple of hundred pounds per month. This could be an excellent cash cushion to take to university with you. It would help keep you away from costly debt that can cause serious problems in the future.

Spending money that you have worked to earn ‘in the real world’ often gives a different mindset to wildly spending on interest-free ‘student offer’ credit cards and overdrafts. If you know how hard it is to work and save a few thousand pounds, it gives some perspective to spending, and more importantly repaying debts.

Financial education

We know that student loans are going to be more expensive and that this burden will be a tax that you carry into later life, but you don’t want to take the credit cards with you too.

We’ve blogged before about financial education and how children should be taught this early on in their lives. Often the only real way to learn is by trying to save money and budget, or sadly by learning from mistakes.

Students: take the year off to learn about money - earning it and saving it. You might find these lessons are hard but they might be equal (in terms of life experience) to what you learn at university when you go.

If you didn’t have much of a financial education and you’re learning lessons about problem debt now, try our online counselling service Debt Remedy which can give you instant help on any debt issues.