Graduate debts rise to £2.46bn

Graduates are leaving university with an average debt of £13,501

British students graduating this year will have debts of more than £2.46bn, a report suggests.

Barclays found the average graduate owed £13,501, an increase of over 10% in the past year.

But the number with debts has fallen from 80% to just under 75% during the same period.

The report suggests the drop could be linked to students taking a year off before university, to earn money. Some 1,237 recent graduates were questioned.

Upward trend

An estimated 183,000 graduates will leave university with debt this year.

Graduates in the north west of England have the lowest average debt of £12,532 each.

The Barclays report found around one quarter of graduates in debt borrow money from family or friends, a figure that has gone down slightly from last year.

Jeremy Law, head of student and graduate banking at Barclays, said the rise in debt was partially due to rising living costs and a "more resigned attitude towards debt".

Where possible graduates should keep a tight reign on their finances to help set them up financially for the future. Jeremy Law, Barclays Bank

"If this trend continues, students starting a three-year course this September could be graduating with debts of almost £20,000", he said.

"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."

Mr Law encouraged graduates with financial difficulties to seek expert advice.

"Graduates should consolidate their borrowing and pay off the debts with the highest interest rates first by making use of the cheapest borrowing options, for example, interest free graduate overdrafts or graduate loans."

"Where possible graduates should keep a tight reign on their finances to help set them up financially for the future," he added.

The Barclays Annual Graduate Survey was conducted by NOP World Financial between February and March.