A student loan can open up a world of opportunities for our future generation. But how will they really affect the student-piggy-bankfuture of our bright stars?

Despite what we hear in the press, not all debt is bad. Take mortgages as an example, typically it is a low-interest bearing debt that is taken on as an investment. Student loans are just another one of these loans. They present a world of opportunities for our youth today, making higher education accessible as ever. Admittedly, this does come at a price, which if we look upon in terms of investment could bring upon huge returns; both in respects of prospective financial income and personal well-being. As students successfully follow their hearts and careers, they will inevitably lead a better quality of life and be happier fulfilling their dreams. So when we weigh it up, the positives truly outweigh the negatives.

On the other hand, higher education fees have been on the rise with the current annual feel averaging at around £9,000 at most universities across the UK. Taking into consideration the additional living costs to bear, students can be heavily indebted before their working lives begin. It is for this reason, we need to be thoughtful of how the loans are used and ensure avoidable expenses are not being taken on. With the loan being so accessible and of such a significant amount, it can be quite easy to run up expenses without realising how quickly the money dries up. Working part time during studies or even the holidays, is a great way to supplement income whilst also gaining some quite valuable work experience.

As with all good things, we do need to proceed with caution and work around the caveats we hear about so often. At present, a lot of focus has been placed on the prospects of getting a mortgage with the addition of the debt of a student loan. Simply put, yes, a student loan will still be considered as a debt when applying for a mortgage, but as your prospective income is anticipated to be higher, it may have little to no impact when weighed up. If you are spending wisely and studying hard it will all be worthwhile in the end.

Andrew Fagg Mortgage AdvisorOn a more positive note, student loans will also be considered in terms of credit rating so you will be working your way to building up a credit history. This will then definitely work in your favour when you come to apply for a mortgage. With the new term starting, there is much conflicting coverage in the press at present, that can quite rightly be concerning, but instead of worrying, seek an expert’s opinion.

If you would like further advice about your mortgage or potential mortgage, why not contact me, Andrew, on 07720 353866, or email andrew@davenportfinancial.co.uk.