Rising living costs are pushing students towards credit cards and overdrafts, with new research suggesting that some graduates are still paying off personal debts from their university years well into their thirties and forties.
Nearly one in four graduates aged 25 to 44 are still carrying personal debt that they first took on while at university, according to new research from debt management company Lowell.
The survey suggests that financial pressures during university can have consequences long after graduation, with essential living costs such as food, rent and household bills emerging as the biggest reason students turn to borrowing.
Among students who had taken on debt, 40% said they had borrowed money to pay for essentials.
Socialising was the second most common reason, cited by 35%, while 22% said they had borrowed because of an emergency.
Other reasons included educational supplies, mentioned by 21%, major purchases such as phones or furniture, also at 21%, and travel or holidays at 19%. A further 5% said they had borrowed money to support family members.
Credit cards the most common first step into debt
Credit cards were the most common form of personal borrowing among university students surveyed.
Almost half, 46%, said a credit card had been their first experience of personal debt, while 23% said they had first fallen into their overdraft. Another 17% had borrowed from friends or family.
The research also looked more widely at when people first experience financial difficulties.
Among respondents who are currently in debt, 88% said they first fell into debt between the ages of 18 and 34. More than half, 51%, said they had first experienced debt between 18 and 24 — an age range covering many people at university, in further education or starting their first full-time job.
The figures come as students continue to face the challenge of balancing accommodation, food, transport and other everyday expenses alongside their studies.
Does taking out a student loan change attitudes towards debt?
Lowell's research also examined whether taking out a student loan could influence how young people think about borrowing more generally.
Some 39% of university students surveyed said having a student loan had either made debt feel more normal or made them more comfortable with borrowing.
By comparison, 18% said their student loan experience had made them more cautious about taking on other forms of debt.
The findings relate to attitudes towards borrowing, with the research separately looking at forms of personal debt including credit cards and overdrafts.
John Pears, UK CEO of Lowell, said many young people encounter borrowing for the first time while at university, at the same time as they are learning how to manage their finances independently.
He said the concern was not borrowing itself, but whether young people had enough financial knowledge before making important decisions about credit.
“Many young people, some still teenagers, are making some of the biggest financial decisions of their lives before they've been given the knowledge or confidence to fully understand how credit works.”
He added that university could make borrowing feel like a routine part of adult life and argued that greater financial education was needed to help young adults understand the longer-term consequences of using credit.
University debt can follow graduates for years
Perhaps the most striking finding is how long some university-related borrowing appears to remain with graduates.
Across those surveyed, 17% said they were still carrying personal debt taken on during their university years.
Among people aged between 25 and 44, that proportion increased to 24% — almost one in four.
The findings suggest that for some students, borrowing is not simply a short-term way of getting through university but something that can continue to affect household finances years after leaving.
For current students, the research also highlights the importance of understanding the difference between different types of borrowing.
Credit cards, overdrafts and personal loans can come with interest, charges and repayment requirements that differ significantly between products. Students considering borrowing should check the terms carefully and consider independent debt or money guidance if they are struggling to meet essential costs.
The research was carried out by debt management company Lowell.