Graduate debt falls as students find work to support themselves

Student debt has fallen for the first time in 13 years as undergraduates increasingly take on part-time jobs to fund their studies, a survey shows.

Undergraduates are also cutting back on their spending and getting more financial help from their parents because of growing fears about going into the red, the survey of 1,500 students for The Push Guide to Student Money found.

Students now owe an average of £3,103 for every year they spend in higher education, meaning that most will graduate owing just over £9,300. This represents a drop of 9 per cent on last year's figures - the first decrease since The Push Guide was first published in 1993.

But some students owe more than £25,000, and at some universities, particularly in London where living costs are higher, average debts exceed £5,000 a year.

The findings coincide with the publication of a second survey, by NatWest, which found that increases in student debt had slowed. It calculated that students would owe an average of £13,252 by graduation, an increase of just £612 on 2005.

Johnny Rich, series editor of The Push Guide, which interviews students from every university in the UK, said both students and their parents were now concerned about debt.

"The drop in actual levels of debt this year is likely to be due to students tightening their belts, working longer hours in paid jobs and getting greater financial help from their parents," he said.

"Anecdotal evidence suggests that parents are helping their children financially in many different ways - it could be as simple as slipping them a £20 note when they see them, or sending them something useful every so often."

The NatWest Student Money Matters survey found that nearly half of current students now have part time jobs. They work an average of 14 hours a week to fund their studies, earning an average of £71.32 a week. And 31 per cent of students admitted skipping lectures because of a part-time job.

Fewer students were considering abandoning their studies. Only 22 per cent of students said they had thought of dropping out to get a full-time job, down from 29 per cent last year.

The NatWest survey of 3,000 sixth-formers, students and graduates also highlighted the financial support now given to students by their parents. About two-thirds of parents contribute financially to their children's university education. Nearly 30 per cent give regular amounts throughout the term, and 26 per cent give money as and when their children need it.

The study also claimed that sixth-formers' perceptions of student debt were far higher than the reality. Sixth-formers starting university this year expect to pay a record £33,512 for a three-year degree course, a rise of £5,000 in perceived debt on 2005.

Mark Worthington, head of NatWest student banking, said:New students are clearly much more clued up about the financial realities of university than in previous years. Despite the anticipated cost of university rising by 17 per cent on 2005, students are taking it in their stride and cutting back on their spending - meaning they only expect to graduate with 8 per cent more debt than those not paying the increased tuition fees."

Nicola Casey, English student, 20: 'In my second term I needed three jobs'

Nicola Casey, 20, has held down three part-time jobs at onceto pay her way through university.

An English student at Leicester University, Nicola has run up debts of nearly £6,300 over two years and also has a £1,000 overdraft despite spending at least 14 hours a week on part-time jobs. She also works over the summer to pay off her overdraft.

She will combine her final year with up to 18 hours a week working in a bar. She says: "Nowadays you have to get a job to get through your degree, but you also have to spend time getting work experience, unpaid. Everyone has a degree now so you feel you have to get something extra. That takes up time you know you could have spent earning. In my second term last year I was doing three jobs, then I spent Easter doing work experience at a PR agency, then I had to go back to uni with no money and only three weeks to cram everything in before my exams."

Nicola is relatively unconcerned by her debts. "It doesn't really bother me. It motivates me more to be successful when I graduate so I can pay off my debts."