Many consumers are being lured into the debt culture, while at the same time earning a degree in the hopes of living a good life. An oxymoron; analysts warn recent graduates that it is impossible to build wealth while they owe high interest loans.

In fact, a mortgage costs the homeowner twice the purchase price.  Many mortgages lend £100,000 to cover the purchase price of a loan, and then the homeowner pays £200,000 to the bank; £100,000 capital and the same amount in interest. Then, there are closing and admin costs attached.

Many students try to buy a home before repaying their student loan.  This puts an incredible strain on the graduate’s finances.

Graduates must start paying off student loans when they start earning £15,000.  The loan payment garnishes 9% of their income.

Many graduates are unaware of the financial burden to individuals who have suffered high-risk credit ratings, financial mistakes, and identity fraud.  The damage to their credit rating creates a vicious cycle which can take a decade to escape.

This is increasingly apparent as the numbers of graduates who default on their student loans or give it a low priority grow.  Defaulting on a student loan can dramatically increase the interest rate and fees associated with a mortgage.

Student unions urge students to seek debt advice and counselling while they are still in university.  Ignoring debt until after graduation will damage the graduate’s credit rating and may require years to repair.

As the school year ends, many graduates are warned to protect their finances carefully and establish a good credit rating.