A higher education in living with debt: As student loans supplant grants, we learn how a small group of undergraduates has fared over the last three years

FOUR out of five students end the academic year owing money, according to Barclays Bank. A spokesman for the National Union of Students painted an even starker picture: 'You cannot enter university today without being in debt - unless you have the backing of your parents, or you are very lucky and have a job in the vacations.'

The spokesman said the Government had made the cultural assumption that parents will cope. 'The Government said loans would act as an incentive to go to university. In fact, it is a disincentive. Working-class students and those from ethnic minorities have a greater resistance to debt, and are less willing to get involved with borrowing.'

Government policy has been to reduce student grants in favour of student loans. For the next academic year, grants will be cut by 10 per cent.

Living on an overdraft has become part of student life. Alison Le Fevre, a student counsellor at the University of Surrey branch of National Westminster Bank, said: 'The majority of students try to manage their money, but for many it is their first time away from home. They find it difficult to budget. The Government wants them to have student loans, but a lot of students do not want to take them out - as it is debt. We are also there to help, but it is more borrowing.'

For three years, the Independent has tracked how a group of students managed their finances. Their first experience of debt shows the varied faces of student finances.

Plastic problems

Pierre Haggar, above, has just finished his three-year course in media studies at the University of Westminster.

He initially banked with Lloyds, but ran up a pounds 700 overdraft. The bank took away his plastic cards and cheque book.

He repaid the bank, but he could only have his cards back after a three-month delay. He changed to Barclays, but it refused to give him an overdraft. His parents have had to help him out, by paying his rent and a pounds 400 debt, so that he could stay on the course.

Pierre intends to pay them back in the summer when he goes home to Leeds.

He has also taken the maximum amount of student loan for every year of his course.

He and three friends have started a video production company, and he intends to make this his career.

Pierre said: 'I came unstuck because I came down to London and got carried away by the bright lights. My advice to others is go mad and enjoy yourself. It is the only time in your life you can do it. Worry about the consequences later.'

Janie Anderson (not shown) is studying medicine at Glasgow University. At the end of the third year of her five-year course, she is currently pounds 2,200 in debt to the Student Loan Company.

She does not have a bank overdraft but is planning to get a professional studies loan from her bank.

This year, Janie received pounds 2,265 - her father pays pounds 1,372 and the local authority pays the rest. She also gets an extra payment of pounds 533 from the local authority because she is a medical student.

Janie said: 'I would have been in a lot of trouble if it had not been for some birthday money. I currently have pounds 500 in my bank account, which is all the money I have in the world.'

Janie is expecting to graduate in two years' time, pounds 10,000 in debt. She is not unduly worried, and reckons a lot of people will be much worse off than her.

Mark Dando (not shown) has been studying computer science at Swansea University. He is awaiting his exam results and hopes to do research or a masters degree.

Mark has finished his course with no overdraft, no student loan, and in credit with Barclays Bank.

He attributes his financial stability to working all last summer and doing small jobs since.

He said: 'Being in university has been the best time of my life, and working outside added to my enjoyment tremendously. The job meant that my parents did not have to make as much contribution as before.

'My advice to other students is try and keep a record of what you are spending. It does make a difference'.

Help from parents

Leanne Wood, above, has just finished a law degree at Selwyn College, Cambridge. She hopes to take a year off before deciding on her next career move.

With two weeks of the term left, she has no student loan and no overdraft. 'I have a grant and my parents top it up,' she said. 'They also give me the equivalent of the student loan.

'My parents have helped me quite a lot. But being at Cambridge has also made it easier, because I can live in the college all the time - which works out much cheaper.'

Persistent debt

Edmund Strain, left, was studying electrical and electronic engineering in Liverpool. He left college in June 1992, after just one year. He was pounds 1,500 in debt.

Two years later, he is still trying to pay it off.

A year after leaving college, he got a temporary job with Barclaycard in Liverpool as a customer services assistant.

'I dealt with a lot of students,' he said. 'I could sympathise with them when they got into difficulties.

'I now have a new job back home in Belfast doing the same sort of thing with part of Allied Irish Bank.'

Edmund now earns about pounds 7,500 a year and is paying off his student debts. He owed pounds 800 to Midland Bank alone when he left college. That debt is now down to pounds 500.

'I am still thinking of going back to college,' he said. 'But I have to get myself financially sorted first. I learned the hard way. The prospect of debt should not put people off going to college.

'If you have a definite goal and a career idea, then you should definitely go. If you are just going for a good time for three years, you should think carefully first.'

(Photographs omitted)