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Student loan shortfall leaves grads with £3,500 additional debt

Students are forced to go into their overdraft to pay for course books and laptops, study finds. Photo: Aaron Chown/PA Wire/PA Images

Most UK graduates leave university with about £3,500 of debt on top of student loans, research shows.

A survey of 1,000 UK graduates by price comparison website MoneySuperMarket found the average Brit leaves uni with about £3,561 of additional debt, while 15% leave with a whopping £10,000.

Overdrafts and other products like credit cards are the source of most debt, the survey found. But over half (55%) of grads also borrow money from parents while studying − with loans from the bank of mum and dad making up £2,188 of their debt.

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And only 57% of these pay their parents back, taking on average 11 months to do so.

The amount of debt is a concern for graduates, with four in five (79%) worried about their current bank balance, and two in five (43%) admitting they are more worried about their finances than they were at university.

Of those that borrowed from their parents while at university, two in five (42%) did so because they had gone through their student loan too fast, while 36% had gone too far into their overdraft.

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Another quarter said their parents didn’t want to see them running up debt with a bank, while 17% hadn’t opened a bank account with an overdraft before they went to university, in the first place.

Three fifths spent the money from parents on groceries, while 36% used it to pay their rent. Other popular spends included equipment, such as books and laptops (48%), travel (31%), takeaways (30%) and alcohol (26%).

Rachel Wait from MoneySuperMarket, said: “With exams, essays, lectures and socialising to do at university, the last thing you are probably thinking about is your long-term debt.

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“However, students are leaving university owing significant amounts of money, whether it be to the bank or to their parents.

She added: It is worth checking the terms of your current account as many banks will give you a timeline on when they will start charging your student account a higher rate of interest.

“You may also want to look at consolidating your debt onto a 0% credit card, which will allow you to spread your repayments out without having to pay additional interest.”