BANKS have been accused of creating a whole generation of debtors after it was revealed that one student has just graduated with loans of £60,000 – among the highest ever seen.

As students received their A-level results last week, it emerged that banks make minimal checks when university-goers open student accounts, allowing them to have multiple overdrafts of up to £2,000 a time.

And the checks at banks were so lax that Lee Barnes, 25, who has just graduated from Calderdale College, part of Leeds Metropolitan University, with a performing arts degree, was able to rack up an astonishing £60,000 of debt.

He opened four student accounts – even though students are only supposed to have one – each with an interest free overdraft of £1,500. He was also able to borrow another £40,000, most of it with NatWest, with which he had one of his student accounts.

Vincent Cable, shadow chancellor for the Liberal Democrats, said: “Banks are aggressively promoting debts among students, taking no account of the serious problems associated with getting heavily into debt at such a young age.

“There is an added issue that the government will not allow information about student debt to be included in pooled debt data that is shared among lenders. This means that banks are lending large sums of money to people because they are unaware of the debts they have already run up.”

Barnes accumulated most of his debts during the first year of a degree at the University of Central Lancashire five years ago. He quit his course after the first semester but stayed in Preston for the full year and spent money like water.

He had used his full overdraft allowances on all of his accounts and the banks had frozen his cards, but he found a loophole with NatWest. He was unable to withdraw money from a cash machine or branch, but was able to get money from his local Spar using the cashback facility. He withdrew about £15,000 in this way over the course of six months.

Eventually NatWest caught up with him, but not before he had racked up about the same amount in penalty fees. He currently owes NatWest just under £30,000.

In addition to the money Barnes owes the four banks, he also borrowed four loans from the Student Loans Company, which total about £15,000, when he started a second degree at Calderdale College – which he has now completed.

Barnes, who works for a theatre company, said: “My story is extreme but it shows what can happen if you slide off the rails and things get out of control.”

He has written a play about his experience, Life is crisp but so is money, which he is taking to universities around the country, to warn other students about the dangers of taking on too much debt. Barnes is seeking advice on whether he should declare himself bankrupt.

NatWest said: “From the outset NatWest made every possible effort to contact Mr Barnes both by letter and phone. Sadly he chose not to respond to any of our attempts.

“During this period Mr Barnes made hundreds of cashback withdrawals at the same Spar store where it would appear he knew transactions under a certain amount would be accepted by the retailer without requiring further authorisa-tion. It is important to point out that today, this could not happen due to the introduction of chip & pin and other enhancements that require transactions to be authorised.”

Students who graduated this summer left university owing an average of £12,363, according to a survey from NatWest last week, and 5% owe more than £20,000, according to Uswitch, a comparison site.

Mel Mitchley at Call Credit, a credit reference agency, said: “For a lot of young people, university is the first time they have ever had to manage their money.

“If you find yourself struggling, don’t bury your head in the sand. If you miss credit card payments or exceed your overdraft limit without permission it will be recorded on your credit report and you may find it difficult to get a mortgage or other types of credit further down the line.”

With a maximum student loan outside London of £4,510 compared with average living costs of £8,120 borrowing is a fact of life for most students and the core is the student account with an interest-free overdraft.

Halifax offers the most generous at up to £2,750 interest free. RBS offers up to £2,500, although this is tiered. In the first year, students can borrow up to £1,250, rising to £2,000 in the fifth year or £2,500 on a case-by-case basis. Kevin Mountford at Moneysupermar-ket.com: “A tiered overdraft is often advisable. You need much more self-discipline if you go for an overdraft that lets you borrow the full amount in the first year.

“The danger with this is that, if you blow the full amount in year one, you leave yourself in a difficult situation in subsequent years.”

While the banks are generous with their authorised overdraft facilities, they sting you if you exceed your limit. Halifax, for example, which does not offera tiered overdraft, charges 24.2% on unauthorised borrowing.

Students are only supposed to have one student current account, yet the banks do minimal checks so it is very easy for undergraduates to open more than one account. HSBC said: “If someone tells us they do not have another student account, we take their word for it. We are looking into ways we can make the checking process more stringent.”

As well as interest-free overdrafts the banks also offer credit cards to students. They deny this is irresponsible because students are offered low credit limits – typically no more than £500. However, the interest rates are high. Lloyds TSB charges 19.9% and NatWest’s rate is 18.9%, so always use your interest-free overdraft first.