“In debt” is a term often used by students to describe their current financial circumstance. The average student debt is increasing and government statistics suggest that by 2010 the majority of students will have amassed debts well above the 20,000-pound mark.

As a result, more young people than ever are declaring themselves insolvent. According to studies there has been an alarming increase in the number of people within the 19-29 year old bracket, entering into IVA agreements. It would appear that many students are opting to use such procedures, as a means to control their sizeable post graduation debt levels.

So why the increase? Many critics believe that personal monetary values have drastically changed. A recent survey amongst young people, confirmed that some teenagers and people in their early twenties had a warped understanding as to how some forms of credit work, in particular credit cards. Alarmingly, a percentage of young people are borrowing against their cards without any idea as the how they we’re going to repay their debt. Even more perplexing, is the fact that a small percentage of people, weren’t even aware that they had to pay it back.

Although this is a small example, it clearly demonstrates a need for the government to re-educate our young on the effects of debt, and how to manage personal finances responsibly before it gets out of hand. Many students live by a “buy now, care later” attitude and it is this lack of understanding that is driving the increase in IVA’s among the younger generations.

On a larger scale, our up and coming generations will play an important part in securing our countries economy, and stabilizing our current debt situation. However, if such trends among young people continue, it is likely to have a seriously negative effect in coming years.