Banks concerned over levels of student debt

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BANKS are becoming increasingly concerned about levels of student debt, Don Foster, the Liberal Democrats' spokesman on education, said yesterday.

Financial worries and the associated stress make up more than 70 per cent of the workload of student welfare services, according to a survey of higher education institutions carried out by the party.

The Liberal Democrats clearly believe that student poverty can prove a powerful recruiting issue among young people. Their proportion of the youth vote (aged 18 to 24) rose to 23 per cent in the last election.

The party's leader, Paddy Ashdown, who today begins a tour of colleges and universities with a speech at Bath University, said that the Conservatives offered young people a 'cocktail of unemployment, poverty and missed opportunities', while Labour had been taking them for granted.

The average student leaving college this year will owe pounds 1,765, according to Barclays Bank, and that figure is likely to top pounds 2,800 in three years' time. Midland said 7 per cent of student accounts had overdrafts of between pounds 500 and pounds 1,000. Lloyds said that the proportion of students with overdrafts had risen from 39 per cent to 44 per cent in the past two years.

Mr Foster said that students were being hit by a 'triple whammy'. Grants were becoming harder to obtain and were worth less, while jobs for graduates were scarce. Most students would be better off on the dole, he said.