Mar 30, 2013 Simon Williams
Across the globe, university costs are rising, and students and parents alike are reacting unfavorably. Each year, it seems that university prices are becoming harder and harder to bear, but at the same time, the job market is getting more competitive. Young adults can't afford to go to school, but many cannot find a decent paying job without a degree.
This is especially true in the United Kingdom, where some individuals are foregoing higher education and picking up numerous menial jobs to make ends meet. However, that landscape might be changing soon as well, as some of these young people are finding alternative means of funding for their schooling.
Looking to alternative lenders has been very lucrative for some. Because those who enter into the college system are often younger, they haven't had time to amass credit, meaning that they are either unable to qualify for loans or have to be saddled with ones that are accompanied by massive interest charges. Alternative financiers, on the other hand, allow individuals to qualify more easily to borrow.
Completing school getting tougher
According to Bridging and Commercial, tuition prices at U.K. schools have been on the rise for some time, while the application process is also getting more competitive because British students are doing better on their A-level tests. This also means that more scholarships and performance-based grants are likely being distributed, which indicates that there probably aren't extra funds to help others who can't afford college easily.
The news outlet said, in order to quell costs, the Business Lending Partnership was created for use at the University of Huddersfield so that students who are pursuing a non-traditional education can also seek out additional funds.
Some students avoiding the bill
Another growing problem that is making traditional lending a much harder resource to tap into is the fact that many individuals are going to school in the U.K., but then moving to European Union nations upon graduation without paying off their student loans, according to the Daily Mail.
The newspaper said that, according to a House of Commons library study, around one in five students from other European nations that study in the U.K. have left the country without settling the bill. This is largely because it can be difficult to track down debtors across international boarders. Therefore, lenders are rapidly losing money, and many times, taxpayers and other government initiatives have to pay.
Other options available
Students don't have to solely rely on funding from small businesses and universities - they can seek out alternative lenders for help when they can't qualify for enough cash. Unlike companies that only look at a potential borrower's credit score when applying, these firms are often a bit more lenient. Many are looking into more practical, comprehensive data that can provide a more encompassing financial profile.
For instance, innovative lenders have begun using the Payment Reporting Builds Credit scoring method to allow those with zero or poor credit to take out loans. This tactic takes into account additional data, like a solid history of making payments on utilities accounts, proving that they are are not a risk to give a loan to.