How do students borrow and why?



 Student life

Student life

As it turns out, the student’s life is not at all as carefree as it may seem. According to a report by the Polish Business Roundtable, around 80% of Polish students decide to work. Young people want to be independent and independent. Although most of the budget at their disposal is financial support from parents, they are taking measures to change their situation. More and more students work in their industry, which bodes well for the future. Among them we find both those attending full-time and part-time studies. For extramural studies, we must be ready to cover the costs associated with tuition. What are the student’s earnings and how much does he / she spend per month?

Student loans and earnings

Student loans and earnings

To find out what and why students borrow, look into their household budget. Surveys carried out by the Polish Business Council have shown that average earnings in this group range from 2001 to 3000 USD net. Perhaps these are not dramatically low amounts, but when we go deeper, it turns out that I may not be enough. Comforting is the fact that as many as 30% of respondents declared earnings from USD 4001 to 5000 “on hand”. From the answers regarding the dream payment in the future, it appears that students are counting not only on professional experience, but also studies raising their qualifications.

Student’s largest expenses

Student

If the earnings are not dramatic, and students also give a helping hand, why do students borrow? We should look for answers in spending and managing the household budget. Let’s start with what young people need money for. Students’ main obligations include tuition and accommodation fees. Prices on the real estate market are steadily rising, and wages remain unchanged. You need to try to rent a room at a good price. Dormitories are not currently cheap either. According to the information on the university websites, the monthly price for a dormitory can be from about 400 even up to 900 USD. It all depends on what location and standard we choose.

For this we do not forget about the tuition fees, which can be divided into installments, but still constitute a large expense for the student’s portfolio. Let’s compare prices of Information Technology and Journalism and Social Communication of the second degree in different cities. Let’s look:

How much does a student spend?

How much does a student spend?

The Association of Polish Banks took up the determination of the student’s average expenses in their research. They show that the budget of a young learner should be at least USD 1,900. However, it is assumed that the student will live in the cheapest dorm room and go on a date twice a month. The reality is a bit different. Young people don’t like being alone. Therefore, social life is of great importance to them. In addition, remember that not everyone will opt for the cheapest accommodation. If someone values ​​peace, he will choose a higher price for a room in the apartment. Ultimately, the expenses exceed the amount given in the report. It should be emphasized, however, that we are not talking about lavish lives.

Students borrow more and more

Students borrow more and more

Expenses exceeding monthly earnings increase the number of borrowers among young people. Considering the declaration of employment by most of them, they should not have problems getting a non-bank loan or low credit. The basis is a positive assessment of your repayment capacity. If the student has a source of income and is not listed in the registers of debtors, he has a chance to be supported by a loan company.

According to data from the Central Statistical Office of Poland in 2018, 3.1 million people in Poland were in the age range of 18 to 24 years. Half of these young people had university status. How many people from this group are active borrowers? Information on this subject can be found in the Intrasavings Bank statement from March 2018. At this time, 15.3 million borrowers were recorded in Poland, while 4% of this number were students.

Where do they borrow the most?

Where do they borrow the most?

Currently, young people prefer to complete all formalities online, and stability ceases to be as attractive as for other generations. Most often, students reach for consumer loans (68%), which enable them to buy a new phone, laptop or any other installment products. In addition, credit lines (3%) and credit cards (12%) are becoming popular. These data come from the Intrasavings Bank Newsletter. Home loans are the least popular. Only 1% of borrowers aged 18 to 24 reach for them. It is no wonder then that the student loan offer or student loan via the internet is appearing on the market.

According to the Intrasavings Bank report, about 54% of overdue payments in the group of people aged 18-24 are credit obligations, which include both non-bank loans and bank loans. Despite this, the percentage of indebtedness among young people is small and accounts for only 1.3% of the total debt of Poles.

Students borrow, but for what?

Students borrow, but for what?

As you can guess, students do not borrow for such purposes as buying an apartment or building a house. Of course there will be exceptions. However, we are looking statistically. Looking at the above data, it can be concluded that students borrow for their daily expenses. Consumer loans also include installment purchases to finance new computer equipment or a telephone. In addition, it happens that the household budget lacks funds for fees for studies or accommodation. Concerts, which can also be financed by student loans, are very popular among young people.

If we look at the Bank Millennium report on saving among the Millenials group, we can find out that most of them collect money for trips (67%), cars (55%) and household appliances (about 30-40%). It can therefore be argued that they follow the same needs when applying for online loans or bank loans.

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