The recession is making it harder for today's parents to help fund their children's university education. It is particularly concerning in this economic climate that many students and parents fail to understand the true levels of debt they will face on graduation.

Annabel Brodie-Smith, Communications Director, Association of Investment Companies, said: "Many young people go to university to enjoy the best years of their life, but on graduation find themselves struggling to repay their debt for years."

Millions of graduates across the globe are suffering from increasing student debts due to the growing rate of unemployment as a result of the financial downturn of the economy.

Decade of debt

According to new research by the AIC, over two thirds of Scottish students believe they will be spending at least ten years struggling to pay off their student debts after graduating.

The study found that four per cent of the students expect to be in debt of over £20,000 by the time they graduate.

Sixty-eight per cent of these students stated that because of the current climate, it will take over ten years to repay their student loans.

Wes Streeting, president of the National Union of Students, (NUS) said: "Unfortunately, students are already racking up thousands of pounds of debt, and with graduate job prospects at an all-time low many of them will be unlikely to be able to pay this debt off for years to come."

As a result, the number of Scottish students putting their salary before the job position has increased to 23 per cent.

Yet with the rate of unemployment soaring considerably, a number of graduates from the past three years are unable to start paying off their debts.

As a result, student grants and loans may soon be frozen.

So how is the government clearing up debt problems for students?

Tuition free

According to the BBC, the Government may launch a new scheme which will allow for university students in England, who live at home while studying, to pay no tuition fees at all.

However, as a result, these students will not be entitled to student finance such as student loans and other financial support if the scheme goes ahead.

The aim of the scheme is to help students avoid graduating in deep debt.

Maggie Scott, the assistant chief executive of the Association of Colleges said: "It's a novel idea and hopefully it's going to attract young people and adults who haven't thought about going to university before."

However, Mr Streeting of the NUS argued that the move could cause more people to settle for a limited choice in courses from universities closer to home.

He said: "One of the biggest barriers people face today isn't actually tuition fees because they are not paid up front they are paid after graduation; it's actually the spiralling costs of living so the grants, maintenance loans actually really come in handy."

Yet it's not only student loans that graduates may struggle to pay off.

Although the government's scheme, if it goes ahead, will reduce the amount of overall student debt regarding student loans, the number of students opting for other ways to receive finance such as applying for credit cards and overdrafts, may also increase.