STUDENTS leave university owing an average of '13,501 - '10,000 more than 10 years ago.

And in another three years the average debt could rise to '20,000.

The Barclays annual graduate survey reveals today that in 1995 the figure averaged '2,212.

In the north west of England, debt is slightly lower than the national average, but still comes in at more than '12,500.

Researchers predict debt levels will continue to rise, prompting warnings that the personal cost of university education may act as a deterrent to future generations of students.

Jeremy Law, head of student and graduate banking at Barclays, said: "As predicted, graduate debt is continuing its upward trend, due to a number of factors, including rising living costs and a more resigned attitude towards debt.

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

"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."

The survey reveals that typically students will owe money to the bank, to a credit card company and to their parents.

Threshold

But in most cases they owe most to the Student Loan Company.

On average, students in the north west owe '10,193 to the loan company. This is taken from the students' wages at source at a rate of just under nine per cent after students reach a threshold salary of '15,000.

With students earning an average starting salary of '17,745 - according to Barclays - that means it would take a number of years to pay off.

Next year universities will be able to charge up to '3,000 a year towards tuition costs. This will affect debt levels - despite packages of financial support from universities designed to ensure the least well-off students are still supported.

Benson Osawe, academic affairs officer at the University of Manchester Students' Union, said the country faces a "timebomb" within the next four years, when he believes student debts will reach a critical level.

He believes average debt may actually be higher than the Barclays figure and says debt is already changing student habits - with most students now having to juggle their studies with part-time jobs and choosing not to stay on to do post-graduate courses.

Despite the increasing levels of debt the survey shows most students - 77 per cent - still thought that it had been worth going to university. But one in four admitted being concerned about their finances.

The Barclays survey included responses from 1,237 recent graduates and was conducted by NOP World Financial through an online questionnaire.

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