Thousands of former students are struggling to meet the minimum repayments of their loans, it has been revealed.

According to figures, approximately 702,000 graduates are failing to earn enough cash to start paying off their student loans.

The number of graduates unable to start repaying their loans in England has soared by 160,000 in just a year as a result of the shortage of decent employment due to the economic crisis.

However, with one in ten students being unemployed after they leave university, the Government's proposal to freeze grants and loans in 2010 could mean students will be left in more debt as a result of the increase in tuition fees.

Wes Streeting, the president of the National Union of Students, said: "Those vice-chancellors who are arguing for the cap on fees to be lifted in the coming year must think again, unless they want to plunge a generation of students and graduates into even worse debt during a time of economic crisis."

Stephen Williams, the Liberal Democrat higher education spokesman, said: "It's depressing that so many graduates are earning far below what would usually be considered a graduate salary. Thousands of them are going to be carrying a huge debt burden for many years to come."