The banks that claim to listen but don't always hear

The course may be over, but the debt doesn't stop there. New graduates come under ever-greater financial strain as they try to take their first steps towards a career

Your mother has framed the graduation photo, you've had a break and at last the world is your oyster. There will be the job, then the flat, some new clothes and hopefully the car. All those years of hard work will surely now bring their reward.

Your mother has framed the graduation photo, you've had a break and at last the world is your oyster. There will be the job, then the flat, some new clothes and hopefully the car. All those years of hard work will surely now bring their reward.

That is the theory. But for some graduates the reality is rather different. Take Stephen, who studied in Manchester and wanted to stay in the city when he qualified because it offered the best job opportunities. But that meant a new flat, which needed a deposit, and his bank manager proved less than helpful, demanding repayment of his overdraft before he would consider any further help. Stephen is back at home with his parents in a small Lancashire town, working in a temporary job that makes no use of his qualifications and pays too little to allow him to save for a move.

Stephen is not alone. A survey by NatWest Bank, published in November, revealed that almost half of new graduates now return to live with their parents after they qualify - twice as many as went back home just two years ago.

According to David Bloomfield, the head of student and graduate banking at NatWest, the fact that each year more graduates are opting to stay at home to save money is a good thing. "It highlights the fact that graduates are concerned about their finances, and sensible money management." What parents think of the trend is not recorded, and many graduates complain that their choice of job is limited.

The latest figures show that a quarter of new graduates now start out with debts of more than £5,000, and that is not counting obligations to the Student Loan Company, which does not demand repayment until an income threshold has been passed. Those who have had to take a postgraduate course for entry into a profession such as law, accountancy or, increasingly, journalism or multi-media, may well have taken out a Government-supported Career Development Loan of up to £10,000 to fund a year's further study.

A graduate's biggest creditor after the Student Loan Company is likely to be their high street bank, which has been happy enough to let an overdraft mount up for years, and may also have been responsible for a postgraduate study loan. When the course is over, it is interested to know how its investment is going to be repaid.

Not quickly, is probably the answer. Another recent NatWest survey revealed "unrealistic" expectations of starting salaries. The average for 1998 graduates was only £12,255 nationwide, just under £14,000 in London, far from the £20,000 many looking for work in management consultancy and IT expect.

All the big banks claim that not only are they student-friendly, but graduate-friendly, too. As Bloomfield admits, the first couple of years out of university can be a real struggle and new graduates may need as much support as they did while they were students. NatWest has just introduced a team of 60 special advisers to help new graduates plan their financial futures, and it expects them to be kept busy.

All the big four banks offer financial packages that will generally include an extension of the interest-free overdraft facility graduates have had as students, plus a low interest loan of up to £10,000 with repayments spread over five to seven years. The loan can generally be used to pay off any outstanding overdraft.

But the banks want evidence of a job - a six-month contract of employment, or at least a regular income - before granting a loan.Some graduates, particularly those moving into industries where a lot of work is short-contract or freelance, fall down a financial black hole.

The big four banks insist that helping graduates who may be aiming for less than conventional careers is left to the discretion of branch managers. HSBC said: "It really is up to the applicant to prove credit-worthiness. Most managers would focus on income rather than a conventional salary. If that is good enough, they will look at a loan sympathetically."

Most managers may be sympathetic, but a few are not. Graduates who have fallen foul of their manager are particularly resentful when a branch hands their affairs over to a "collection centre" to chase up what has suddenly, and sometimes inexplicably, become a "bad debt".

Outside the banking network, help is sparse. For graduates to qualify for help under the Government's Welfare to Work scheme they have to have been drawing Job Seekers' Allowance for six months, a fairly demoralising prospect, and one which many graduates won't contemplate, preferring "McJobs" to the indignities of the dole. Six months on JSA brings modest assistance towards self-employment, or a special scheme for aspiring musicians under 25.

For those who want to take a different route and set up their own business, it is often back to the banks for help, and the same difficulty of proving they deserve it. As Lloyds puts it: "We are very keen on business start-ups and would review a new graduate's proposal in the same way as anyone else's. They would have to be credit-worthy and have a valid business plan."

Not much help there for recent graduates with debts they are already having difficulty paying off.

The names of graduates in this article and the case studies (right) have been changed