Students leave university with additional £3,770 of debt

New research from MoneySuperMarket reveals that graduates are leaving university with additional non-student loan debts worth £3,770 – up £209 on £3,561 in 2019.

Following last week’s A-level exam results, for those students who received the required grades for university and start to plan for their academic year, the UK’s leading price comparison spoke to recent graduates to understand how much non-student loan debt they accumulated. The findings will help future grads reduce their debt and help future-proof their financial start in life, especially as we are now officially in a recession.

The research found that nearly two thirds (67%) of graduates are worried about their finances, including one in five (20%) that consider themselves extremely worried. 42% admitted being more worried about their finances now than when they were at university.

One in 10 had additional debts over £7,000 and nearly half (47%) said that the reason for their borrowing is that they had ran out of their student loan too quickly.

The bank of mum and dad remains the most popular lender with 60% of graduates calling upon parental financial support. Graduates that borrowed from their parents loaned an average of £3,254.

Nearly a quarter of graduates (24%) used their overdraft facility; 22% used a payday loan; 20% borrowed money from friends; 20% used a loan from a bank and 18% used a credit card.

Sasha Evans, Personal Finance expert at MoneySuperMarket, said “This year’s crop of graduates are leaving university at a difficult time for the economy and the wider job market. Our research also reveals that in addition to student loans, graduates have additional loans of £3,770 on average.”

“If you’re a recent university leaver, there are things that you can do to get on top of your finances so that you have one less thing to worry about. In addition to paying down your student loan, you should start by having a clear picture of what you owe and when it needs to be repaid by.”

“If you have credit cards with expensive interest rates, see if you can switch to a 0% interest deal. Similarly, if you have a loan or an overdraft and think you’re paying over the odds, shop around to see if you can get a better rate. If you’re able to, always try to pay back more than just the minimum payments.”