I refer to last Sunday's report, 'Under 30, employed and deep in debt'.

I am not surprised that many young adults under 30 are not only facing credit woes, but also becoming bankrupt.

From time to time, I receive calls from banks offering me unsecured credit facilities or unsecured loans.

Knowing the undesirable consequence that can follow if one defaults on payments, I usually turn them down.

Such unsolicited and unsecured loans are very tempting and one could easily end up spending what he does not have.

There is another group of young people who are burdened with debt even before they start working. These are undergraduates pursuing a degree in a local university.

Unless they come from a rich family or are awarded a scholarship, they usually cannot afford to pay for the cost of tertiary education and are forced to take up an education loan from a bank.

The amount can be quite substantial, from $20,000 for a general degree to $100,000 for a medical degree. Even if they use their parents' Central Provident Fund to pay for the education, they will be required to pay back the amount upon graduation.

With the opening of the fourth university by 2015, 30per cent of each year's cohort will be given university places.

With the corporatisation of universities and the gradual shift of burden or cost of education to undergraduates, more young people will be deep in debt even before they start working.

Therefore, they should discipline themselves to repay loans and avoid getting into deep financial straits through reckless spending.

Goh Kian Huat

This article was first published in The Straits Times on 29 June 2008.