Graduate debt 'is underestimated'

Debts on graduation turn out to be far higher than many people think

Students and their parents are severely underestimating the level of debts they will rack up while at university, a survey has suggested.

The Association of Investment Trust Companies (Aitc) survey found students expected to leave university with an average debt of £7,208.

The research found parents estimated the likely debt at £9,741.

However, both were well short of the actual average debt a student has on graduating, which is £13,501.

Low savings

Four out 10 parents are saving nothing towards university, the study found.

However, more than one in four students surveyed said that they expected their parents to foot their bill for university.

Of those parents who do save for their children's university education, the average amount saved is £253 a year. Nearly one in four parents save less than £200 per year.

Last month, the government revealed that total student debts for the year 2003-04 were seven times higher than nine years before.

Statistics from the Student Loans Company showed debts on its books had risen to more than £13bn.