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Graduates face a lifetime of debt

Published: Wednesday, 18 April 2012   Category: All Graduate Jobs News

Considering that the starting salary for graduate jobs is now at an average of £25,500, experts are warning today’s youngsters to think carefully about their choices regarding the future.

Michael Garvey, a chartered financial planner at Edinburgh Wealth Management, told graduates that Brits graduating now might have to wait quite a few years before they become debt free after university.

"The burden of student debt will also be an inhibiting factor with regards to aspirations like marriage or getting on to the housing ladder," said Garvey.

Even though the government announced that it was going to invest £1 billion in the next five years to help the improvement of the current record high levels of youth unemployment; Garvey stated that many graduates should “consider their priorities”, and will probably still need to continue to use loans from their parents to help them initially.

Increasing fees

Push, the independent student guide, recently published that students beginning their university studies in England - where fees are estimated to average £8,630 from next year - will suffer the most, finishing their undergraduate courses with £59,100 debt.

By using the rate at which debts have increased in the past years, the survey also predicts that debt for UK students after graduating will be £26,100 for those starting in 2011, and up to £53,400 for 2012 entrants. Those who started studying in 2008, however, will graduate with a total debt of £22,000; according to the report.

This increased debt means that people graduating after the application of those new fees will need to pay back their loans once they start earning £21,000 or more.

Push based these calculations on the responses of 2,808 students currently based at 115 UK universities. It asked how much they owed to banks, their parents and the Student Loans Company and then projected future debt levels considering fee hikes, interest and inflation.

Have you considered the amount of debt you may face upon graduating from University? Will your parents be able to afford to fund your studies?

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