Student debt 'takes money from current accounts'

Graduate current accounts could be a little emptier due to substantial student debts.

It is important to remember the continuing impact that student loans can have on people's current accounts, according to Credit Action.

The financial education charity explains that, while deductions from payslips are based on earnings so that they do not become unmanageable, they do still impact on the amount that a person receives each month.

Director Chris Tapp says: "It is a very real cost for graduates, because the money that's coming out of their payslips to pay off student debt is money that they are not able to spend on other things."

However, he concedes that there are never any instances of graduates finding their student loans difficult to manage.

This is due to the rates of interest charged on the outstanding balance, along with the way that the payslip deductions are calculated.

But he warns against allowing other debts - such as credit cards - to be seen in the same light when new students leave for their first year of higher education.