Recent reports record a worrying increase in mental health issues among the UK student population, much attributed to student concerns about finances and the rising level of debt - not only from tuition fees, but also from overdrafts, loans and credit cards.
For example, a survey carried out by the National Union of Students (NUS) in 2015 reported that 78% of students had experienced mental health issues in the last year and a third of respondents that they had suffered suicidal thoughts. There is often a recorded and direct correlation between mental health issues and debt, with one in two adults with problem debt also suffering from a mental health problem.
Rising debt and the international profile of such debt is also a serious concern for the institutions that are owed money. This is a significant issue: reports in 2013 noted that £6.46 million was owed to five universities across the West Midlands and in Staffordshire alone. Some of these debts were over a decade old and were spread across 67 different countries.
Debt recovery is complex, time consuming and can be costly in terms of finance team resource and/or the instruction of debt consultants or lawyers. Enforcement abroad more so. Court fees are on the increase. Students are ever more aware of legal protection offered to them as consumers, of their right to complain and their right to dispute legal claims. The situation is more complicated if the potential defendant to a claim for unpaid fees is suffering from a mental health condition.
This poses an obvious dilemma for colleges and universities. Given the duty of care that higher education institutions have to the students that attend them, should the revelations about the increasing prevalence of mental health issues amongst the student population impact upon their process for recovering student debt?
Creditors are generally not mental health professionals and cannot be expected to diagnose or support those debtors who reveal that they may be suffering from a mental health condition. However, they can be sympathetic to the possibility of this when seeking to recover debt and can and should provide information to enable students to access appropriate support.
Guidance on dealing with litigants in person requires solicitors (if instructed to pursue debt) not to mislead the Court or otherwise to take unfair advantage of any third party and acknowledge that debtors who are vulnerable may require additional support from the court or the lawyer. In providing information to a vulnerable litigant in person with a disability, the requirements of the Equality Act apply as they would for a client and we suggest that finance teams apply the same criteria.
Research by The Royal College of Psychiatrists and the Money Advice Trust has suggested that awareness of mental health issues could result in better rates of recovery and revisions to the Lending Code to include reference on how lending institutions like banks and building societies treat those with mental health conditions is evidence of the growing trend of awareness.
Entering into a dialogue with debtors and developing a better understanding of any health issues which may affect their dealing with their financial situation is likely to assist with any repayment discussions and ultimately impact upon whether a debt is successfully repaid or not.
We detail below some practical suggestions for the management of student debt, targeted at facilitating debt recovery from those students you know or suspect to be suffering from a mental health condition:
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