Students are lacking the necessary financial education skills to properly handle their money.
Tracey Bleakley, chief executive of financial education charity pfeg (Personal Finance Education Group), noted too many university goers hold deep misconceptions about how the student finance system operates.
Writing in the Guardian, Ms Bleakley said the scheme at present is "far from easy to understand".
Research released to coincide with the second annual Student Finance Day found 63 per cent of 14 to 18-year-olds in England think they have to repay their loan regardless of how much they earn after graduating.
On top of this, 61 per cent are wrongly of the opinion that it can have an effect on their credit rating.
Ms Bleakley believes financial education equips young people with the necessary skills, knowledge and confidence to make important financial choices.
"We need tomorrow's generation of young consumers to be able to make critical purchasing decisions, weigh up risk and reward and understand how personal finances affect other areas of their lives," she added.