Average graduate debt climbs to £13,500

Graduates shouldered an average debt of £13,501 last year - a rise of £1,432 compared with students who left university the year before, writes Paul Hill.

Barclays' Annual Graduate Survey found that the 183,000 students who graduated from university in 2004 carried debts that amounted to more than £2.46 billion in total.

The bank predicted that students starting courses this September could leave university with debts of almost £20,000 if the current trend continued.

But the survey also found that the proportion of graduates with debt has fallen from 80 per cent in 2003 to 73 per cent in 2004. The the bank said this drop may reflect the fact that more students are trying to work during a gap year to earn money before beginning their course.

Jeremy Law, head of student and graduate banking at Barclays, 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."