Graduate debt up to £13,500

The average student now graduates £13,501 in debt, Barclays has said.

In its annual survey Barclays found that over the last year graduate debt increased 12 per cent, with students in the North East and Yorkshire owing the least at £11,864 each.

Overall the UK's 183,000 students are set to owe more than £2.46 billion, the bank found.

"Graduate debt is continuing its upward trend, due to a number of factors including rising living costs, and a more resigned attitude towards debt," said Jeremy Law, head of student and graduate banking at Barclays.

"If this trend continues, students starting a three year course this September could be graduating with debts of almost £20,000. Graduates will find themselves with debts for years to come which may affect their ability to buy homes and invest in pensions. Prince or pauper, these levels of debt may act as a deterrent to some people considering going to university," he added.

However, there were positive signs from the survey, which revealed that fewer graduates are now getting into debt.

While last year 80 per cent of students left university in the red, this year that figure was 73. Barclays attributed this to graduates taking a year off to earn money before going to university.

Additionally, most students are taking the cheapest option when it comes to borrowing, with 86 per cent of those in debt going to the Student Loan Company before other sources of cash.