Jobs and parents needed to top up student loans
Students rely on a number of sources of income to fund their studies but few avoid getting into debt, new research finds.
The 2007 Halifax Student Finances Survey found students have an average of £7,500 in debt, the majority of which is held on a student loan.
Despite this figure, only 27 per cent of students surveyed said they were using debt to finance their studies, with parents and part-time jobs emerging as more popular options.
More than half of students relied on the income from a part time job, while half were getting support from the parents.
Some 44 per cent also received funding from the government or other sources of financial aid. A forward-thinking 29 per cent are funding themselves through university with their savings.
Debt has become a fact of life for most students, Halifax found, with most remaining in debt for many years after graduation.
The survey found more than four in five students expect to be in debt by graduation. This trend was less marked in Scotland, however, where different funding rules apply. Nearly a quarter of Scottish students expect to graduate debt free.
Half of students surveyed had debts in excess of £7,000, although this rose to at least £10,000 for 30 per cent of them.
Students studying in the West Midlands had the most debt, at an average of £8,464, while students in Northern Ireland held £4,363. Londoners had the second highest student debt at £8,855.
The vast majority (82 per cent) of students had taken out a student loan, with the average student loan across the UK standing at £4,500. Londoners had the largest average student loans at £5,456 but Wales stood out, where one in five Welsh students has a student loan over £10,000.
Nearly three-quarters had an overdraft facility, although only half were overdrawn. Of those that were in the red, however, a third were overdrawn by £1,250 or more.
More than two in five had a credit card with an average debt of £777.80.
Sue Harper, head of Student Banking at Halifax, said: "These results show just how much debt students are building up while studying. These are significant sums for anyone let alone someone who is not yet working full-time.
"Our advice to students is to budget carefully and to shop around for the best financial deals. The difference between the most generous interest-free overdrafts and the most expensive could be worth several hundred pounds over the course of your studies."
Looking toward clearing their debts, students expected to earn an average of £18,790 in their first year after university. Men were most optimistic, banking on an average of £19,919 compared to the £17,893 anticipated by women.
Nearly half thought they would exceed average graduate salaries and earn more than £20,000, while 15 per cent of students in London expected to earn at least £30,000.
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