Graduates facing debts of £10,000

The average debt for a final-year university student has increased by more than 70 per cent over the past five years to almost £8,000, with levels expected to double again over the next few years, following the introduction of top-up fees.

The average debt for a final-year university student has increased by more than 70 per cent over the past five years to almost £8,000, with levels expected to double again over the next few years, following the introduction of top-up fees.

According to the latest results of Mori's annual student debt survey, carried out on behalf of Unite, the student accommodation group, the average UK student graduated with £4,600 of debt five years ago. This figure is now more than £7,800. Students are already anticipating a further 25 per cent rise in their debts over the year, with most expecting to graduate with debt of about £10,000.

However, after the introduction of top-up fees next year, which will see most students' tuition fees bill rise from £3,000 to £9,000 over a three-year course, debt is expected to double.

The Mori survey reveals that arts students end up with about 5 per cent more debt than science and engineering students. Worryingly, more students are relying on credit cards to finance debts, with about 17 per cent holding some of their outstanding debt on a card. More than a third of students have a bank overdraft.

Research from the Prudential recently revealed that almost one in three students had considered dropping out of university as a result of the crippling debt. However, Unite says its latest research reveals that students are more confident, well organised and financially competent than ever before. Almost half now have jobs to help pay for their studies.

Commenting on the survey, Nicholas Porter, the chief executive of Unite, said: "It is striking how students have changed their outlook on university life over the past four years. This generation of students is perhaps the first to accept and feel at ease with the fact that they will need to borrow to study and possibly work during term-time to fund basic essentials."