These days most higher education students leave university with around £10,000 worth of debts from a mixture of credit cards, student loans and overdrafts.  The future looks even more bleak as Barclays Bank predicts students graduating in 2010 will be creating debts of £30,000 during their studies.

In general graduates can expect to earn higher than average salaries but some studies show that they may not actually attain those well-paid jobs for a number of years after graduating. In some cases, even the above average earnings may never be enough to clear their accumulated personal debt.

In order to avoid this situation as far as possible, it is recommended that you prepare and learn as much as you can about costs involved in your study including the time it may take you to find a job afterwards.

The main cost for most students will be tuition fees which are paid to the college for the course you wish to study.  Prior to 1999 the Government covered this entire course. The number of prospective students increased and it was no longer feasible to continue using this system. Changing the system was also justified by claims that during the course of their working lives, a graduate could earn £400,000 more than a non-graduate.

Not all students have to pay tuition fees. If your parents' combined earnings are under a certain threshold they will not be expected to contribute to your further eductation. From the threshold upward, the contributions operate on a sliding scale.

There is a maximum any family is expected to pay per year which is regardless of total earnings. This is estimated to be around £4,000 and the Government will still pay for the remaining amount.

Once you have been accepted into a course you should apply to your Local Education Authority (LEA) to find out what your options are for financial help.

Most students will need to take out one or more student loans to cover their day-to-day living throughout the year. These are unsecured loans with an especially low interest rate that reflects the rate of inflation meaning you only pay back the amount you borrowed.

If you chose to take out a loan you should contact your LEA at the same time you apply for support towards tuition fees. Your LEA will assess the amount of loan you are entitled to based on various factors and invite you to request how much you want to apply for. You must then tell the Student Loans Company (SLC) of the agreed figure and it will pay the money into your account on the first day of term. Note also that you are eligible for a higher loan amount if you are studying in London.

You are entitled to apply for one loan for every year of study, and you will not be expected to make any repayments until the end of the tax year (April) after you graduate. Even then you will only be expected to make repayments if your earnings are above a certain threshold.  Repayments will be based on your annual salary and depending on the loan agreement, low interest charges may start.  In some instances if you do not earn over the threshold within 10 years after graduating, the loan will be cleared.

Alternatively you could consider a credit card. These often offer good introductory rates however rarely carry privileged terms for students. If you take a credit card from a bank you will have to pay exactly the same high interest rates as everyone else. The only difference being that as a student, your credit limit will be lower. Often students with credit cards find themselves sitting on the limit, only able to make minimum repayments, being charged high interest rates and taking years to clear the debts.

Another option is using an overdraft facility. Most banks will offer interest-free overdrafts on their student accounts with the hope that you will continue to use that bank once you graduate. You can only have one student account at any one time and the amount you get on an overdraft will depend on the bank. The usual amount is around £2,000 and it is interest-free.

If you stay within your limit the overdraft will not cost you anything, however if you should go beyond it, you’ll be charged interest on the difference. You may also be charged an unauthorised overdraft fee which could be as much as £35 per occurence.

Unless specifically requested to do so by the bank, there is no time limit for repaying the overdraft. However, once you leave university the interest-free perk will no longer be available and you will be charged at the standard rates that apply to overdrafts on standard current accounts so it's worth paying it back as quickly as possible. Some banks provide a grace period after graduation before the higher rate will kick in.

There are many options for students to borrow money, but despite this 70% have problems covering their day-to-day living expenses and over half will have part-tim jobs as well as loans. Most students admit they are worried about debt but believe it is unavoidable. The best way to avoid running into problems is to know and research your options carefully and avoid getting into any unnecessary debt, such as credit cards until you have some sort of steady income.