Student debt is spiralling. CHRIS TITLEY looks at the options for graduates with money worries.

TONY BLAIR admitted this week that student debt had become the single most difficult problem facing the Labour Party on the doorstep.

The Prime Minister is reportedly now willing to review the Government's policy on tuition fees and student loans. Meanwhile, Tory Kenneth Clarke has said he would consider scrapping college tuition fees.

So there's hope for future students. But what about this summer's graduates?

For them, living with debt has become a way of life. Total British student debt is put at a staggering £4.85 billion, according to Barclays.

Student borrowing has increased by five-and-a-half times in a decade, after grants were abolished and tuition fees introduced.

Ffion Evans, president of York University Students' Union, said a York graduate owes an average of £12,000. Student debt is increasingly putting prospective undergraduates off going to university.

"Student hardship is definitely one of the most frequent reasons people come and see us in the union," said Ffion. "A third of all queries to our welfare unit are regarding financial hardship."

The Student Union offers a short-term hardship loan of £100 and it also employs many students.

She said: "The university offers budgeting advice and debt advice as well as an opportunity to apply to a hardship fund - money given to the university from the Government.

"But this money is not available to overseas students and can only be applied for after every other possibility has been tried."

The union is lobbying the Government for a return to free higher education.

Graduates must start paying back their student loans once their salary exceeds £10,000. But many have other debts that need paying off more urgently.

The Citizens' Advice Bureau is seeing more and more graduates with money worries, especially at this time of year. Paula Sidebottom, service manager at York CAB, which now has a term-time branch at the College of Ripon and York St John, said: "Although they don't have to pay back the student loans immediately, people are under an enormous pressure with that level of debt." Face up to money problems, said Paula. The longer anyone ignores their creditors, the worse the ultimate outcome.

"What we do is get them to fill out a budget sheet, which details what their expenses are, what they need to pay and if their basic needs are being met - accommodation, housekeeping, travel.

"We would encourage them to get casual work, which is always on offer in York."

Nearly a third of students now have credit card debts. Some will find they cannot meet the monthly minimum repayment. The CAB will negotiate with creditors for a reduced repayments schedule.

That is recorded on a person's credit reference, which could affect their chances of getting a mortgage or other loan in the future. But after six months, it is wiped clean.

Ignore the problem, and a debtor can find himself or herself with county court judgements against them, which last for three years on their credit reference.

Tackling debt "brings it back under the control of the person, and it's less stressful," said Paula. "It frees people to get on with their lives."

- York Citizens' Advice Bureau, at 3 Blossom Street, York, offers free advice and opens 9.30am-3.30pm Monday, Tuesday and Friday; 4.30pm-7pm Wednesday. To make an appointment, telephone (01904) 636066

- The Student Loans Company customer helpline is 0141 204 5605