Students get debt warning

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Students get debt warning

Collective debts in excess of £5 million is staring today's students in the face upon graduation, a new survey shows.

Credit reference agency Callcredit found that the 345,000 freshers starting uni this week could face significant financial problems a few years down the line.

Student loans will be the main contributor to the total average debt of £15,000 per student, Callcredit claims.

This is more than double the total figure owed by the average graduate seven years ago.

Commenting on these figures, Callcredit industry relations director Mel Mitchley said: "Life is financially harder for students now than it has ever been and the decisions people make about their borrowing while they are studying will impact on their finances for years to come, so it's important they have the information they need to make the right decisions for them."

Ms Mitchley says student loans offer the best value for money, because automatic repayments will only start when a graduate's gross earnings exceed £15,000 a year.

She warns that overdrafts on student bank accounts could revert to higher interest rates after graduation, while credit cards could also work out costly.

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